Column: Privatization’s $25 million glitch

The following article was published in the Florida Capital News on August 15, 2011:

Privatization’s $25 million glitch

By Bill Cotterell

There’s an apocryphal tale about the Pentagon seeking a plan for sinking submarines off the east coast of the United States during World War II.

Supposedly, the brass called in a strategy consultant who analyzed everything and proposed draining the Atlantic Ocean, rolling tanks out to blast the subs as they sat mired in the mud, then rolling back the tanks and refilling the ocean.

In Florida government, the governor and Legislature make policy decisions, and the departments carry them out. Sometimes, ideas come up from the agencies to the heavy thinkers, but the final policy flows downhill.

In the 2011 legislative session, budget managers decided to privatize operation of state prisons in the Department of Corrections Region IV. The policy probably originated with GEO Group or Corrections Corporation of America, or one of the other companies in the prison business that make substantial campaign contributions to legislators.

Florida already has seven prisons run by private corporations, and they are legally obligated to operate more cheaply than state-run institutions. Whether they do — and if so, how they achieve such savings — is a point of endless contention between the state and the Police Benevolent Association, the union representing correctional officers working in the prisons.

Department of Corrections Region IV is an 18-county area, the entire southern half of the Florida peninsula, encompassing 12 major prisons and 30 separate sites with about 3,800 employees.

The Legislature’s policy decision, therefore, was simple and straight-forward: If the prison corporations can do the same job cheaper, let’s have more privatization.

But there’s a big catch. Unlike other state employees, prison officers have “bumping” rights. So when the prisons in Region IV go private on New Year’s Day, their laid-off employees will have three basic choices — look for something else, continue in their current jobs with whatever private company wins the bid, or bump someone with less seniority anywhere in the state.

And the bumped employee would then have a chance to move down the seniority ladder in a sort of dismal chain reaction. Also, a lot of senior employees might retire, and others might take their law-enforcement certification to new jobs with city or county police forces.

But many of those who leave will have big payouts — estimated at $25 million — for leave time and other benefits on the books. The state would have no choice but to pay.

“One last issue. We have discussed this but (I) am not sure if anything can be done,” Dan Ronay, chief deputy secretary at the Department of Corrections, wrote in an email on May 13 to Bonnie Rogers in Gov. Rick Scott’s budget office. “This issue is the payout of comp/holiday comp, vacation and sick to our staff that will leave the state (employment) due to Region IV privatization.”

Ronay said it looked like “right around” $25 million, but “this amount was NOT taken into consideration by the Legislature, even though they were made aware.” He concluded that “this payout may just cripple the agency for next FY.”

Rogers replied that “we too have concerns with how this will be managed.” She said budget staff met and had phone conversations with budget officials while House-Senate negotiations were going on in the session, which had concluded less than two weeks earlier. She asked if there was anything “we should raise to the governor for possible line-item action,” but Scott did not use his line-item veto on the privatization plan when he signed the budget 13 days later.

The email exchange was obtained in a public-records request by the PBA, which is suing to stop the privatization move. The union opposes prison privatization in general, and this one in particular, partly because it would remove more than 3,000 employees from PBA representation.

Gretl Plessinger, the well-regarded but beleaguered Department of Corrections spokeswoman, said the agency was coping with the unbudgeted leave-accrual costs. DOC may have to go to the Legislative Budget Commission, which moves money around between sessions, and ask for funding once the ultimate impact is known.

“The payout is still a good way off,” she said. “It’s still an issue for us, and the House and Senate are aware of it. We’re just trying to absorb it into our budget, but the one thing we do know is that it can’t impact public safety.”The department is already trying to figure out what it will do with possibly hundreds of bumping (or bumped) employees who will be looking for vacancies in other regions so they can stay with the state. Plessinger said “we’re also putting off non-mission-critical purchases” to help save money.

What’s fairly clear from the Ronay email, though, is that the governor and Legislature were determined to move forward with the privatization. Not even a deputy secretary saying it “may cripple the agency” gave them any cause to pause.

Find this article here:  http://www.floridacapitalnews.com/article/20110815/COLUMNIST03/108150302