Privatization and Government Reform News: Federal COVID-19 relief mostly unspent, promise for worker freedom, and more
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Privatization and Government Reform Newsletter

Privatization and Government Reform News: Federal COVID-19 relief mostly unspent, promise for worker freedom, and more

Plus: Greater competition in alcohol distribution, Army base water privatization deal, and more.

In this issue:


  • GOVERNMENT FINANCE: Federal COVID-19 Relief Mostly Remains Unspent
  • OCCUPATIONAL LICENSING: Biden Executive Order Promising Worker Freedom
  • REGULATION: Wholesaler Hypocrisy on Direct-to-Consumer Alcohol Shipping


  • STATE GOVERNMENT: Texas Releases Managed Care RFP, Pennsylvania Seeks Private Sector Help for Homeless
  • LOCAL GOVERNMENT: Financially-Stressed Florida Waterpark Outsourced, Syracuse Selling Historical Government Building, Florida City Rejects Marina Lease Deal, Texas City Closes on Desal Plant, Illinois City Rejects Water Deal
  • FEDERAL GOVERNMENT: Amtrak Closes on Station P3, Army Joint Base Enters Water Deal, Veterans Administration Awards Records Digitalization Contract


State and Local Governments Mostly Not Spending Federal Relief

The American Rescue Plan Act of 2021, signed in March 2021, allocated $172 billion in pandemic aid to state and local government agencies. However, at the end of the initial reporting deadline, less than 3 percent ($4.9 billion) of the total had been spent by state and local governments, suggesting that some of the initial claims about the need and demand for COVID-19 pandemic relief were overstated. While the next reporting deadline, which falls on Halloween, is likely to reveal more of the aid spent, a new article from Reason Foundation’s Marc Joffe examines why lawmakers should exercise caution on new relief spending. In addition to the slow pace of the spending, rating agencies’ overly generous estimates of the multiplier effects of the stimulus spending, and federal strings attached to the spending itself, further demonstrate why added relief for state and local governments should be avoided.

Biden Executive Order Shows Promise for Worker Freedom

While the two major political parties typically agree on very little with respect to employment and worker freedom, occupational licensing remains one rare area of common ground. The Biden administration sent a strong signal of support this summer by signing an executive order that looks to target “unfair occupational licensing restrictions,” non-compete clauses that bind workers from finding new jobs, and other anti-competitive measures related to employment. In an article from this summer, Reason Foundation’s Vittorio Nastasi explores some of the detrimental effects of rampant occupational licensing and how the Biden administration’s executive order can help provide some relief for workers.

Consumers Benefit from Greater Competition in Alcohol Distribution

With the pandemic and supply chain issues limiting access to a variety of consumer products and services, efforts in many areas to open up competition and increase access should be lauded. However, liquor and spirits distilleries are still largely subject to state control and compulsory distribution networks that limit competition, decrease consumer access and bar them from shipping products directly to consumers In a recent article, Reason Foundation’s Austill Stuart explains why keeping distilleries from shipping products directly to consumers reduces competition and choice while empowering interests that benefit from the anti-competitive status quo.



Texas STAR Health Managed Care Draft RFP Released: In September, the Texas Department of Health and Human Services released a draft request for proposals (RFP) to find a single provider to operate the state’s STAR Health Program for children and young adults. Based on previous year totals, the contract award is likely to cost around $350 million per year. Potential providers will be evaluated on several metrics: Connecting patients to health care resources will be the number one weighted value (24%), while timeliness to resources (22%), encouraging Medicaid participation by providers (18%), prioritizing value in health service delivery (14%), and robust reporting and recordkeeping (12%) will also be considered. This month the agency expects to issue the full RFP, which calls for a six-year contract with up to two three-year renewal options, and then hopes to award the contract next June.

Pennsylvania Housing Authority Seeks Partners to Support Local Housing Initiatives: In September, the Pennsylvania Housing Finance Agency issued an RFP, seeking proposals from private organizations to manage around $45 million annually to support affordable housing initiatives across the state. Grant funding will be provided by the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund, which obtains revenue from a combination of impact fees from locales in the state’s Marcellus Shale Oil region, and a realty transfer tax. Proposals are due in November.


Florida City Water Park Considers 30-year O&M Deal: The City Council of Cape Coral, Florida, voted in October on a 30-year proposal with ProParks Management to operate and maintain the city’s SunSplash water park. The attraction has been losing money in recent years, necessitating taxpayer support to subsidize the park’s operation.

Syracuse Issues RFP for City Hall Redevelopment: Syracuse Mayor Ben Walsh announced in August the city was releasing an RFP to sell and redevelop its City Hall Commons building, which was previously taken over by the city in 1991 and dates back to 1869. Proposals were due this month.

St. Petersburg Marina Lease Falls Through: The City Council of St. Petersburg, Florida, declined to authorize a 25-year lease agreement for the city’s marina in August. While the city council wished to upgrade the facilities, it ultimately rejected a lease of the marina. The deal would have required private partner Safe Harbor Development to manage and operate the marina while also funding capital investments to improve marina components nearing the end of their useful lives.

Texas City Closes on Brackish Water Treatment Plant: The City of Alice, Texas, and Seven Seas Water Group reached financial close on a public-private partnership to design, build, finance, and operate a brackish water reverse osmosis desalination plant, the state’s first. Although a precise price figure was not available, previous estimates put the project’s cost at close to $12 million. The contract has a 16.5-year project term, after which the city will retain full operational control of the facility. 

Illinois City Ends Negotiations Over Water/Wastewater Sale: After a year and a half of pursuing a deal, Rock Island City Manager Randy Tweet released a statement saying the Illinois city would no longer pursue a sale of its municipal water and wastewater systems, citing public backlash and an infusion of $26 million in COVID-19 relief funds from the federal government. While local officials said that a potential deal could be beneficial to the city, months of protests from residents, utility workers, and unions led the city to end talks with American Water on the possible deal.


Amtrak Train Station P3 Reaches Financial Close: In September, Amtrak announced it had reached financial close with Plenary North America on a public-private partnership for its William H. Gray III 30th Street station in Philadelphia, the rail operator’s third-busiest. The private partners will be responsible for designing, building, financing, and maintaining an estimated $92 million in improvements and repairs to the station for 50 years, with the entire project estimated at $527 million. 

Army Joint Base Water Privatization Deal Implemented: In October, American Water took over operations of the water and wastewater systems at Joint Base Lewis-McChord in a privatization deal. The company will operate and manage the systems for 50 years, a contract agreement valued at $771 million. 

VA Awards Patient Records Digitization Contract: The U.S. Department of Veterans Affairs and private firm Health Gorilla finalized a deal to provide digital access to medical records to all eligible patients and doctors, the company announced in a press release. Veterans will control who accesses their records through digital authentication and will be able to revoke access through their own user settings. Terms of the contract were not available. 


“The American promise of a broad and sustained prosperity depends on an open and competitive economy. For workers, a competitive marketplace creates more high-quality jobs and the economic freedom to switch jobs or negotiate a higher wage. For small businesses and farmers, it creates more choices among suppliers and major buyers, leading to more take-home income, which they can reinvest in their enterprises.  For entrepreneurs, it provides space to experiment, innovate, and pursue the new ideas that have for centuries powered the American economy and improved our quality of life. And for consumers, it means more choices, better service, and lower prices. Robust competition is critical to preserving America’s role as the world’s leading economy.”

–From the Biden administration’s “Executive Order on Promoting Competition in the American Economy,” signed in July

“While privatization would potentially benefit the city and relieve bond debt, taking the burden of EPA mandates off the city and providing some money for much needed infrastructure improvements, most of the council felt that it really should not be left up to seven council members. We felt this decision should be up to the citizens.” 

–Rock Island Alderman Randy Hurt on the decision to decline an offer to sell the city’s water and wastewater systems to American Water

“Over the (30-year) term of the lease…we have an opportunity to make well over $10 million. Sunsplash had been in debt for a while. We had to pay a subsidy to them and this puts us in a position now where we can not only collect revenue over a certain point from ProParks but also rent and also property taxes.”

–Cape Coral City Councilman Tom Hayden on a potential lease to enter a 30-year P3 with ProParks Management to operate the city’s SunSplash waterpark

“The City’s needs have changed since it first took ownership of City Hall Commons in 1991. Today, we think there is a higher and better use for this great building. The property is more than 150 years old. Without investment, the upkeep and maintenance needs will continue to rise. Given the City’s needs and the interest in downtown, the time is right to return this property to a private owner.”

–Syracuse Mayor Ben Walsh on the decision to sell the city’s 150-year old City Hall Commons Building to a private developer