click to enlarge

Contents of this issue:

  • State looks to hire privatization expert

  • Anti-school support service privatization bills introduced

  • Rackham golf course remains in legal limbo

  • Detroit incinerator privatization deal investigated by FBI

  • Silverdome to be sold

  • Mackinac Center releases 2008 school privatization survey

  • Brighton contracts out custodial management, but rejects transportation

  • Reed City school board faces recall

  • Southfield recall election, anti-recall campaign launched

  • Houghton Lake enters into privatization arrangement


State looks to hire privatization expert

LANSING — The Michigan Department of Management and Budget has requested proposals for a privatization expert. The state would like a contractor to work with the Department of Treasury in developing approximately 12 ideas for privatization annually, and anticipates working on three to six of them each year.

Six companies responded to the state’s request for proposals. Bids are being analyzed, and the state’s anticipated contract start date of September 1 has been delayed, according to the DMB.

Reference:
Department of Management and Budget Web site, Bid Detail Page


Anti-school support service privatization bills introduced

LANSING — Bills have been introduced in the Michigan House of Representatives to make it more difficult to contract out support services in school districts.

House Bill 6342, introduced by Rep. Jeff Mayes, would require districts to perform a cost analysis of a privatization decision that includes "noneconomic" effects. Exactly what is considered and how large of a weight would be given to "noneconomic" effects is not included in the initial bill language.

House Bill 6270, introduced by Rep. Doug Bennett, would prevent districts from contracting out if the move is expected to save less than 10 percent.

Mayes’ bill was sent to the House Labor Committee, while Bennett’s was sent to the House Education Committee.

According to the Mackinac Center’s 2008 school support service privatization survey, 42.2 percent of school districts in Michigan contract out for food, custodial or transportation services.


Rackham golf course remains in legal limbo

HUNTINGTON WOODS — A deed restriction that prevents the Rackham golf course from being sold for another use was upheld by the Michigan Court of Appeals, according to The Detroit News.

Detroit has been trying to sell Rackham, located in Huntington Woods, since 2006. One possible bidder for the property intended to build a housing development on the course. The City of Huntington Woods, which bid for the course, claimed that the rival bidder’s proposal was not acceptable under terms of the deed. A deed restriction put in place when the Rackham family donated the course to the city prevents the property from being used as anything but a public golf course.

The matter was decided in an Oakland circuit court and appealed to the Michigan Court of Appeals, which ruled that the deed restriction remains.

Huntington Woods’ offer for the property expired. However, the city is "committed to the preservation of Rackham Golf Course," according to its Web site.

Reference:
"Rackham must remain a golf course, appeals court rules," The Detroit News, July 16, 2008


Detroit incinerator privatization deal investigated by FBI

DETROIT — The Detroit City Council’s vote to contract with Synagro for its sewage incineration is the subject of an FBI investigation.

The council voted 5-4 to approve a deal without soliciting bids in November of 2007. The deal was expected to save the city $5 million annually.

The FBI has been investigating dealings with the city council and other leaders in the community, according to the Free Press.

References:
"Council rejects proposal to rescind Synagro contract," Detroit Free Press, July 29, 2008
"People identified in FBI corruption probe," Detroit Free Press, Aug. 20, 2008


Silverdome to be sold

PONTIAC — The Pontiac City Council agreed to sell the Silverdome for $20 million, according to The Detroit News.

The buyer would like to convert the facility to an entertainment center. There were five other bids for sale or use of the property, according to The Oakland Press.

The facility has largely been vacant since the Lions left in 2002. The city attempted to sell the property in 2005, but developers pulled their bids after a lengthy decision-process by the city, according to The Press. The facility costs approximately $2 million annually to maintain.

Pontiac has faced repeated budget deficits and the Michigan Department of Treasury assembled a panel to review the city’s finances.

References:
"Council approves sale of Silverdome," The Detroit News, July 11, 2008
"City to consider six Silverdome plans," The Oakland Press, Feb. 26, 2008
"Rumors of putting a casino in the Silverdome flying once again," The Oakland Press, Aug. 27, 2006


Mackinac Center releases 2008 school privatization survey

MIDLAND — The Mackinac Center for Public Policy’s sixth survey of school support service privatization shows that more than 42.2 percent of 550 conventional public school districts surveyed in the Great Lakes State contract out for at least one of the three primary noninstructional services — food, custodial and transportation. "Survey 2008: School Service Privatization Grows Again" found that 10 net new districts are now contracting for at least one support service, a 4.9 percent rate increase from 2007.

Custodial service privatization continues to show dramatic year-over-year growth. Statewide, 17.6 percent of districts have private firms doing all or part of their janitorial work, a 20.2 percent rate increase in just one year.

Busing services also show an increase in this year’s survey to 5.5 percent of the 550 districts successfully surveyed, up from a revised 4.7 percent. That represents a 15.8 percent increase in the rate of transportation-related contracting, though the total number of districts is relatively small. The Mackinac Center excludes all special education privatization and field trip contracting from its survey tally.

Food service remains the most frequently outsourced function with 29.1 percent of districts reporting having contracted either management or operation of their program. For the first time in the survey’s history, food service contracting declined in net terms, although by a modest rate of 2.1 percent.

More details on the survey are available at www.mackinac.org/9726. For more information on school privatization in Michigan, visit www.mackinac.org/8691.


Brighton contracts out custodial management, but rejects transportation

BRIGHTON — Facing a $3 million projected deficit for the upcoming school year, Brighton Public Schools decided to contract out the management of its custodial services to Aramark. The district had also been considering contracting out its transportation services, but rejected the idea.

The district only expects to close $1.2 million of the gap and make cuts through the fiscal year if necessary, according to The Detroit News.

Reference:
"School bus cuts put on hold," The Detroit News, Aug. 13, 2008


Reed City school board faces recall

REED CITY — School boards voting to contract out for services expect repercussions from its unions. In Reed City, employees affected by its decision to contract out food and custodial services gathered signatures to recall four board members, according to The Big Rapids Pioneer. The move is expected to save the district approximately $300,000 in the first year alone, according to a school board member in The Big Rapids Pioneer. The district is over budget by about $750,000.

The recall petition includes three reasons: extending the superintendent’s contract by two years, cutting nonadministrative positions and failure to consider "taxpayers’ input," according to The Pioneer. The employees turned in enough signatures to put the recall on the November ballot.

The district considered privatization in 2006 but opted instead for offering severance deals for educators.

References:
"Reed City recall launched," The Big Rapids Pioneer, July 16, 2008
"Info in Todd letter was misleading," The Big Rapids Pioneer, Aug. 20, 2008


Southfield recall election, anti-recall campaign launched

LATHRUP VILLAGE — Employees of Southfield schools launched a recall campaign against its school board members. The union had initiated its campaign after the board voted to contract out its food, custodial and transportation services, a move that is expected to save the district $21.5 million over three years.

Lathrup Village resident Thom Bainbridge called a town hall meeting to counter the recall campaign, according to C&G Newspapers.

Reference:
"Residents rally to thwart recall effort," C&G News, July 15, 2008


Houghton Lake enters into privatization arrangement

HOUGHTON LAKE — Houghton Lake Community Schools hired D.M. Burr to manage its non-district custodians, according to the Roscommon County Herald. The contractors are expected to save the district $60,000 annually.

The district accepted concessions from its employees that included replacing two retiring custodians and one resigning custodian with contracted employees. The district had accepted bids for completely outsourcing the service earlier this year, according to the Herald.

Reference:
"Firm will oversee HLCS’s non-district custodial staff," Roscommon County Herald, July 20, 2008



Michigan Privatization Digest is a service of the Michigan Privatization Report, a twice-yearly publication of the Mackinac Center for Public Policy with a circulation of more than 22,000. The Mackinac Center for Public Policy is an independent, non-profit research institute located in Midland, Michigan.

To subscribe or unsubscribe, go to http://www.mackinac.org/pubs/mpr/listserver.aspx.

Post a public comment on this.
View all comments on Mackinac Center articles.

Share More …