In this issue:
Main Articles:
- GOVERNMENT FINANCE: U.S. Debt, Congressional Budgeting Process and Inflation
- CORRECTIONS: Rikers Island Internal Problems Blamed Externally
- FINANCE: Municipalities’ Ill-Informed ESG Chase
- TRANSPORTATION: WMATA Needs Capable Operator
News & Notes:
- STATE GOVERNMENT: Oklahoma Foster Care Pay-for-Success Expands, Arizona Corrections on Trial, Mississippi Child Support Contracting Results Mixed, Montana Seeks Rural Broadband P3, Hawaii Seeks Tourism P3
- LOCAL GOVERNMENT: Santa Clara Shortlists for Water P3, Flint and University of Michigan Announce Data Transparency Pilot, South Carolina-based Recidivism P3 Expands to Capital, Boston Wants P3 for Long-Vacant Lots, Mississippi Counties Combine for P3 Development, Louisiana Locale Rejects City Hall P3
- FEDERAL GOVERNMENT: Energy Department Seeks Private Waste Cleanup Help, Senate Bill Includes Federal Land P3 Pilots, Commerce and State Departments Seek Multibillion Dollar IT Contracts
MAIN ARTICLES
U.S. Debt, Inflation Threat to U.S. Future
With publicly held debt on track to reach over 200% of GDP in the next three decades, it’s long past time for Congress to reform its budgeting process in ways that discourage deficit spending. Recent inflation numbers only underscore the need for Congress to control spending, as the Fed reins in rising prices to counter a spendthrift legislature.
In an article that first appeared in the Daily Caller, Marc Joffe calls on Congress to embrace budgeting and spending reforms that add teeth to spending limits. In another column, Joffe looks at the Federal Reserve’s delicate balancing act to control inflation, and how Congress obstructs it.
Rikers Island’s Problems Require External Solutions
Long considered among the most dangerous corrections facilities in the world, New York City’s Rikers Island Correctional Facility has seen its problems grow in recent months due to mass absenteeism among correctional officers—up 54% from last year in August—leaving remaining staff overwhelmed. But instead of embracing outside help, the jail’s corrections officers’ union is suing the city for trying to find private contractors willing to step in. New York’s legal ban on corrections private contracting notwithstanding, Rikers needs external help, due in large part to actions by the corrections officers’ union, Austill Stuart argues in a recent article.
Municipal ESG Investing is Proving to be Impractical
Environmental, Social, and Governance (ESG) investment strategies are gaining popularity among municipal governments, with local governments issuing $50 billion in certified “green” bonds since 2014. While analysts are starting to include ESG ratings in their scores, Marc Joffe argues that ESG rating schemes need plenty of tweaking before reflecting their stated goals of emissions reduction.
WMATA Procurement and Operations Need to Be in Capable Hands
Over the past several decades, the Washington Metropolitan Area Transit Authority (WMATA) has presided over an era of poor operation and maintenance of its Metrorail, compounded further by bad procurement practices. October’s train derailment is just the latest example of WMATA’s rail problems, which include reliability, safety, and reduced ridership. WMATA now has indefinitely reduced service by about half as it continues to struggle to provide enough trains to operate. In a recent article, Austill Stuart shows how an improved ability to find problems with Metrorail suffers as its operator struggles to address them.
NEWS & NOTES
STATE GOVERNMENT
Oklahoma Expands Pay-For-Success Program for Foster Care Alternatives: The Oklahoma Department of Human Services and nonprofit Impact Accelerator recently signed a contract that expands a pay-for-success program designed to keep children out of foster care by working with their parents. The nonprofit provides a treatment and monitoring program, called Intensive Safety Services, designed for parents to overcome abuse and neglect problems, potentially keeping their children out of foster care. Arall Family Foundation funds the majority of the project, which will use about $730,000 annually to hire therapists and staff. First debuted in 2015 in Oklahoma County, the program reports an 80% success rate of keeping children at home with their parents during the treatment program. The newest contract adds greater capacity in Garfield, Cleveland, and Comanche counties.
Arizona Corrections Agency Ignored Contractor’s Increased Staffing Recs: A vice president of Centurion—the Arizona Department of Corrections (ADOC) health care contractor—admitted on the last day of a trial that ADOC ignored the company’s recommendations for increased staffing to improve services. The trial (Jensen v. Shinn) stems from a class-action lawsuit filed on behalf of ADOC inmates claiming that the agency’s poor prison health care services constitute “cruel and unusual punishment.” According to the company’s Vice President, Tim Dolan, Centurion recommended increasing staff by a little over 160 full-time equivalents in 2019, but ADOC blocked additional hires, including during negotiations over a contract extension approved earlier this year. If Judge Roslyn Silver calls for receivership, the federal government would take over prison health care oversight in the state and could demand hiring more workers, altering or ending existing contracts, and/or bringing corrections health care services back in-house.
Mississippi Legislative Report on Outsourced Child Support Enforcement Shows Mixed Results: The Mississippi Joint Legislative Committee on Performance Evaluation and Expenditure Review (PEER) issued a report in October that found problems with the state’s privatized Child Support Enforcement contracting while noting some performance successes. PEER concluded the Mississippi Department of Human Services “inefficiently” conducted the procurement process, which resulted in a contract with YoungWilliams that “was insufficient to hold YoungWilliams accountable for its performance,” and also chided the contract monitoring program for failing to address “root causes” of problems. The report found that the privatization effort, which started in 2016, did improve paternity and child support order establishment and helped maintain a high level of cost-effectiveness, yet had not improved collections.
Montana Seeks Broadband Proposals: Montana’s Department of Administration announced in November that it is seeking qualified engineers to help deploy broadband through the state’s ConnectMT program. Senate Bill 297, passed earlier this year, establishes guidelines and goals of ConnectMT, including limiting funding to capital (non-operating) expenses and confining project areas to “unserved” areas. Applicants must agree to pay at least 20% of project costs, with priority given to applicants who provide higher percentages of project funding.
Hawaii Seeks Private Firms for Tourism and Promotion Services: In November, the Hawaii Tourism Authority (HTA) issued an RFP seeking private firms to provide marketing and management services for the tourism agency’s global events. HTA looks to enter a four-year contract with a one-year option. Proposals were due in early December.
LOCAL GOVERNMENT
Santa Clara Shortlists for Water Delivery P3: Santa Clara Valley Water (SCVW) shortlisted three teams in early November for the city’s Expedited Purified Water Delivery P3, Inframation News reported. Consortia led by Kiewet Development, Epcor, and a joint venture of Fengate and California Water Service group will submit proposals for the estimated 30-year project, which seeks to provide 11,200 acre-feet of recharged potable water annually to area customers. The estimated $600 million DBFOM availability payment project is expected to include constructing an 18- to 20-mile pipeline and a purified water pump station. SCVW previously attempted the project starting in 2015, but it was placed on hold in 2018 after a delayed RFP, and canceled earlier this year.
Flint Collaborates with the University of Michigan on Data Transparency Pilot: The city of Flint, the Michigan Center for Local, State, and Urban Policy (CLOSUP) and the University of Michigan’s Gerald R. Ford School of Public Policy announced a new pilot program in December that would report they city’s audited financial statements using eXtensible Business Reporting Language (XBRL). The open and machine-readable reporting standard, used by the SEC and agencies in over 60 countries, allows greater government data accessibility for the public, as well as for government leaders to improve their agencies’ fiscal health. The project will also work with historical data to investigate the origin and evolution of the city’s fiscal problems.
Charleston Recidivism-Reduction Program Expands to Columbia: In October, a nonprofit working to reduce recidivism among high-risk parolees in Charleston, South Carolina expanded into the state’s capital city of Columbia. Nonprofit Turn90 (formerly “Turning Leaf”), established in 2014 and redesigned in 2016 to focus on reentry services programming, boasts a 78% success rate of avoiding re-incarceration among participants.
Louisiana City Rejects P3 for New City Hall: Zachary, Louisiana’s city council rejected a P3 proposal in a 4-1 vote to build a new city hall. The plan called for the city to provide the $12 million construction costs and lease the land to firm Downtown Strategies for 30 years, after which the company would sell the building to the city for the lesser of either the amount owed or the appraised value of the building. Council members, who appear to agree a new facility is needed, cited uncertainty over retail space success and the long term of the contract lease as concerns preventing support of the project.
FEDERAL GOVERNMENT
U.S. Dept. of Energy Issues Final RFP for Radioactive Waste Cleanup: In October, the U.S. Department of Energy’s Office of Environmental Management released a final RFP for radioactive waste management services at the DOE’s Hanford site in southeast Washington state. The expected 10-year contract has a limit of $45 billion and will replace a current contract with Washington River Protection Solutions.
Senators Introduce Bill to Establish P3 Pilots in National Parks, Forests: In November, Senators Joe Manchin of West Virginia and John Barrasso of Wyoming introduced the “Outdoor Recreation Act,” which establishes pilot programs to advance performance-based contracting and P3s. One looks for both public and private organizations to invest in recreational amenities and nearby businesses in local communities through pay-for-success and performance-based contracting measures. A second pilot targets private organizations in contracts to upgrade campsites on federal lands.
U.S. Commerce, State Departments Issue IT Solicitations: The U.S. Department of State announced in October that it would be seeking IT service contracts worth up to $8 billion. The agency hopes to award contracts early next year, replacing SAIC’s $2.5 billion Vanguard 2.2.1 contract, awarded in 2010. In November, the U.S. Department of Commerce issued its own $1.5 billion IT solicitation through an RFP. Six areas of support services will be included in the procurement: CIO support; Digital Document and Records Management; Managed, Service Outsourcing and Consulting; IT Operations & Maintenance; Information Technology; Services Management; and Cyber Security. The agency expects to award multiple contracts for the project, which will be initially one year but expandable up to 10.
QUOTABLE QUOTES
“Programs like ISS create positive generational impacts by reducing the level of trauma that children and families would otherwise experience through the removal process and strengthening protective factors that we believe are inherent in all families…Parenting is hard for all of us and we know, without a doubt, that families can be successful with the right supports. When we can keep children safely at home, it is ultimately better for children and families and builds skills that will pay dividends for generations to come.”
– OKDHS Child Welfare Director Dr. Deborah Shropshire, on expanding its pay-for-success program to keep children out of foster care
“We’ve seen the success in Charleston, and any program that helps former inmates, especially those highly likely to return to prison, is something we want more of.”
– Bryan Stirling, Director, South Carolina Department of Corrections, speaking on the early success of Turn90
“This document is the epitome of deliberate indifference. Prison officials were told in Jan 2020 that they needed to increase health care staff by 15 percent and nothing happened. Instead, what happened over the next year and half is that many, many people died preventable deaths…I think what it shows is that Centurion’s leadership recognized that the current staffing model that the state has dictated to them is not adequate to provide basic health care.”
– Corene Kendrick, Deputy Director of the ACLU National Prison Project, on the Arizona Department of Corrections’ refusal to allow for increased prison health care staff, as recommended by the state’s contractor