Around the State

(Following is a condensed version of a digest of privatization initiatives that appeared in the Winter 2006 issue of Michigan Privatization Report.)

South Haven Marina May Be Privatized

SOUTH HAVEN — South Haven City Manager Kevin Anderson has been authorized to seek proposals to operate the city’s four marina and boat launches, according to an Oct. 9 article in the South Haven Tribune. The idea to contract out for management of the marina was facilitated by the retirement of the marina’s previous director. "Marina privatization is still a relatively rare occurrence," said Michael LaFaive, senior managing editor of Michigan Privatization Report, "but its popularity appears to be growing as strapped governments look for ways to improve services and save money."

Several years ago the Westrec Corporation of Encino, Calif., took over management of Chicago’s marinas. They also operate marinas in Arizona, Florida, California, Georgia, Hawaii, Nevada, and the state of Washington. Not all are being managed for units of government. Some are directly owned by Westrec. The company also manages marina-related restaurants and campgrounds.

South Haven released a 53-page Request for Proposal to solicit interested parties in negotiating a management contract for marinas. The four marinas have over 200 boat slips plus accommodations for other boats.

The Mackinac Center for Public Policy has written briefly on the subject of marina, dock and boat launch privatization in its studies "Recommendations to Strengthen Civil Society and Balance Michigan’s State Budget," and "Ecorse: The Fall and Rise of a Michigan City." Both are available online at www.mackinac.org/5046 and www.mackinac.org/252, respectively.

Food Service Outsourced in Grosse Pointe

GROSSE POINTE — The Grosse Pointe Public School System last July agreed to contract with Sodexho Management, Inc. to provide food services to students, employees and guests throughout 17 of its buildings, 16 of which were schools. It is a one-year contract with the option of four one-year renewals.

This deal was not included in the Mackinac Center for Public Policy’s summer survey of school privatization totals because it was unknown to the Center at the time its researchers contacted the Grosse Pointe School district. The goal of outsourcing the program was to break even financially. Last year when it was run by the district the program lost $50,000. This year, that loss will not only be eliminated, but the program could possibly generate more than $90,000 in additional revenue for the district.

Gratiot County Completes Fiscal 2006 Budget; More Privatization Looms

GRATIOT COUNTY — Gratiot County is set to lay off two government janitors and a fair coordinator effective Jan. 1, 2006 to help balance its 2006 budget. The janitorial work will now be performed by the local firm "MMI," according to the Sept. 8 edition of the Gratiot County Herald. Looming on the horizon, however, are additional layoffs as county commissioners examine privatization of kitchen services at the jail. The county will also consider cuts to, or privatization of, its animal shelter and county permitting functions.

Traverse City Zoo Move Possible Says Review Committee

TRAVERSE CITY — The Sept. 16 edition of the Traverse City Record-Eagle reported that the city’s Clinch Park Zoo Review Committee found that moving the Clinch Park Zoo to another location is feasible and that "some form of privatization should occur." Members of the committee were split on whether or not the zoo should remain open if it was not moved.

One possible location mentioned by the members was the former state hospital grounds. On Nov. 7 the city commission voted unanimously to adopt a Recommendation Statement from its 15-member Clinch Park Zoo Review Committee. The statement includes an announcement by the city of its intention to close the zoo by Labor Day 2007. It also recommends that the city solicit proposals from community associations or individuals for the creation of a new zoo on another site.

The annual tax subsidy necessary to maintain the current zoo is approaching $400,000, according to the Record-Eagle.

CPA Broaches Privatization with Houghton Board of Education

HOUGHTON — According to the Houghton Lake Resorter, the fiscal 2006 school budget for the Houghton Public Schools is more than $600,000 in the red and will effectively wipe out the district’s positive fund balance if drastic steps are not taken. In a special Sept. 12 meeting with the school board, Certified Public Accountant Steve Smaka recommended that the board consider privatizing its busing and food services.

One audience member took issue with the recommendation, noting that she had heard privatization may be more costly in the long run. The Mackinac Center for Public

Policy has noted that this is a common contention among opponents of privatization. "It’s a beguiling argument simply because it is so sweeping and generalized," said Mackinac Center director of fiscal policy Michael LaFaive, who has been following privatization in Michigan for 10 years. LaFaive argues that if privatization were more expensive over time, then it would be likely that districts would increasingly abandon privatization; yet we’ve seen growth in competitive contracting, not a decline.

Smaka, a retired state employee and former school board member told MPR that the union’s demands were simply too high. "The MEA is going to have to come to grips with the fact that the district cannot afford the contract which it agreed upon several years ago. If the contract isn’t modified the district could be facing bankruptcy," he said.

The Resorter published a lengthy account of the board’s meeting. Other ideas discussed at the meeting included competitive bidding for health care benefits to reduce costs incurred for current MESSA benefits; establishing a long-term plan for replacing buses and improving facilities; closing unnecessary facilities; and less use of overtime.

Ambulance-Township Partnership to the Rescue; Officials Face Recall Vote

OWOSSO — The Owosso Township Board voted 5-2 in late August to contract out for ambulance service. The vote followed months of arguments on both sides of the issue and may now result in a recall vote.

In September those opposed to ambulance privatization began collecting signatures to remove Township Supervisor Richard Gute and Clerk Judy Gute from their positions. Both of the two officials voted in favor of the privatization. The Flint Journal reported that three other trustees who voted to change services are not included on the recall petition. The recall vote is slated for Feb. 28, 2006.

The Mackinac Center for Public Policy has written on the subject of ambulance privatization for years. For further reading, see "Ambulance Wars" on the Mackinac Center’s Web page at www.mackinac.org/3999 or "Privatization: A Cure for What Ails Detroit’s Emergency Medical Services?" at www.mackinac.org/3163.