Running it like a bidness

It turns out privatizing the Sewerage and Water Board operation is not too hard to do so long as you keep saying over and over that you aren't privatizing the Sewerage and Water Board. 

WWL-TV asked the mayor about these privatization concerns in August, back when he first hired the current Emergency Management Team.

“We are not privatizing the Sewerage and Water Board,” Landrieu said on Aug. 16. “Now, people have a lot of ideas about what that is. Public-private partnerships equal that for some. I'll let them argue about that.”

Landrieu also was very clear that any contracts for outside management would be temporary, nothing beyond his term that ends in May 2018.

“What I need to do is bring in some really strong people to stabilize it and then work through what's going to happen next with the other folks. But I'm not going to bind the next mayor and next administration,” Landrieu said.

Malek-Wiley said Landrieu is going back on that promise with this request for proposals from contractors.

“You're talking about six months to three years,” he said. That sounds like tying the hands of anybody and the council into the future.”

Did the neoliberal ideology ever really go out of style in New Orleans?  One would be hard pressed to prove the case.  The branding is a bit different now which seems to satisfy some credulous observers. For example, it was six years ago, during the nadir of Naginism, that Clancy DuBos declared the Era Of Running Government Like A Business officially over.

Don't try to run government like a business. This is a lesson for us all. Businesses are dictatorships; our government is a democracy. The two are not designed to work the same way. The next time you hear some puffed-up businessman saying we should run government like a business, remind him that Greg Meffert and Mark St. Pierre were successful businessmen — and ask him if he likes how they ran things. If nothing else, we now know the danger — and the folly — of running government like a business.

Despite the danger and the folly and such, we forged right on ahead anyway. It turns out you can continue right along subverting the deliberate and transparent democratic process with only the slightest bit of re-branding.  Enter the era of the "public-private partnership."

August 13, 2010

New Orleans, LA - Mayor Mitch Landrieu today announced appointments to the NOLA Business Alliance board and launched the city’s first-ever public-private partnership for economic development, a structure that will deliver unprecedented coordination for economic development across the city.

“This is a landmark step for our city,” said Mayor Landrieu.  “For the first time, both the public and private sector will partner in a single coordinated effort to deliver new jobs and economic opportunities for this city.  And we will facilitate economic growth by linking government, the private sector and the nonprofit sector while leveraging our resources.   It’s another step in our goal to restructure and transform city government by implementing best practices that improve our quality of life.”

Studies by both the RAND Corporation and the International Economic Development Council demonstrated that a transformational structural change was needed in the City to improve the effectiveness of our economic development efforts. 
 
To that end, a new corporation named the NOLA Business Alliance was formed to serve as the official public-private partnership entity.  NOLA Business Alliance is governed by a 17-member board of directors of which seven (7) seats originate from the public sector, seven (7) seats from the private sector, and three (3) seats from non-governmental organizations.

That press release puts Mitch's name on The Business Alliance, but it's important to note the process that birthed it really started back with Nagin. The change from Nagin to Mitch is falsely described in media as a turning point of the post-Katrina period.  In fact there is a traceable continuity of governing philosophy that runs straight through the entire period with many of the same players calling the shots along the way. Under the Nagin and Landrieu administrations, the public-private model was applied to practically any governmental function we can name.  A few examples:

Mitch's NOLA For Life initiative

Aside from vague explanations, it’s difficult to determine precisely how and why 23 recipients of the money were selected out of 64 applications. Applicants with experience were rejected while new groups were awarded grants. And one politically influential recipient of the highest-level grant of $40,000 hasn’t followed through on other city and state grants it was awarded several years ago — nor did it provide required financial information in its grant application.

The public could be forgiven for thinking this is a public grant process.

Landrieu and other city officials initially took credit for securing a $1 million donation from Chevron to finance the grants, and they promised to contribute another $250,000 at the city’s disposal. But the administration and Chevron say the company’s donation was a private transaction with the foundation — the company said Landrieu’s acceptance of the donation on stage was “ceremonial” — and there’s no official pledge to donate city money to the effort. Therefore, the city said, how a private foundation chooses to make grants from a private donation is not subject to state sunshine laws or Landrieu’s own reform procedures, put in place his first days in office.

Mitch's Office of Technology

Still, the foundation’s work goes on largely outside the usual scope of accountability, even though documents abundantly demonstrate a working relationship between the foundation and city officials in the Office of Information Technology and Innovation.

The official line from City Hall is that the foundation isn’t working for the city.

“The New Orleans Police and Justice Foundation is not signing a contract or doing business on behalf of the city,” said Landrieu spokesman Berni, speaking on the proposed Sierra contract before it was scuttled.

Sidney Torres in a number of capacities, but most notably with regard to policing.

A $75,000 donation from developer and hotelier Joseph Jaeger will help keep the off-duty New Orleans police officers of the French Quarter Task Force on patrol through the month June.

"What Mr. Jaeger has done is not just an act of generosity, but also leadership," task force founder Sidney Torres IV said in a release announcing the donation. "This is exactly the kind of support this program and our city need in order to tackle the crime problem."

Housing in all sorts of ways.

The Housing Authority of New Orleans's first experience with the public-private partnership model came when HRI converted the St. Thomas housing development into the River Garden neighborhood in 2004, anchored by the city’s first Wal-Mart.

HANO then began regularly leasing its complexes to private developers under a plan that was speeded up following Katrina, when many hundreds of units were flooded and otherwise damaged.

After Katrina, HANO demolished its Big Four projects — C.J. Peete, St. Bernard, Lafitte and B.W. Cooper, which accounted for about 60 percent of public housing in the city — in order to make way for new housing models. In some cases, by 2015, fewer than half the new units had rents comparable to those in public housing. Some were market-rate, and others were in-between.

As subsidized units declined, the number of housing vouchers for privately owned apartments rose — as did the waiting list for people waiting to get them.

Replacing the "Big Four" incorporated a trick from even further back that became a staple of post-K housing policy.  

Several other builders had tried to develop the American Can project but failed to come up with the necessary financing. Mr. Kabakoff used public-private partnerships to finance the deal. His first mortgage consists of $29 million in tax-exempt bonds from the State of Louisiana's private activity bond cap program. The program mandates that 20 percent of the housing units be set aside for low-income renters.

How did that one turn out?

Look, there are a lot of these. They touch on practically every aspect of government; transit, drainage, pretty much anything where there's been a surplus of public money available to be vacuumed up by a contractor, a startup, or a non-profit  with minimal transparency or oversight.  Basically no service is worth providing for people if it doesn't help some third party get rich in the process. Here is a fun one where Paul Rainwater helped Bobby Jindal kill rural broadband access.

But, while noting that it was the Board of Regents that applied for the grant, Commissioner of Administration Paul Rainwater said that, "from the start, we've always said there were implementation and sustainability problems in the grant that had to do with a top-down, government-heavy approach that would compete with and undermine, rather than partner with, the private sector and locals."

And now Rainwater is playing a prominent role in the privatization plans at Sewerage and Water Board. Brand it whatever you like. After all this time, we're still stuck on the notion of running government "like a business" for the benefit of businesses and the political people connected to those businesses.

The latest version of that brand depends heavily on the coolness cache of the tech industry. For today's futurist-utopian progressives, selling out the fundamentals of democracy to corporate "partners" has never been more cutting edge.  Evgeny Morozov has written extensively about the interplay between the tech industry and modern neoliberal politics.  This recent column comments on Alphabet (Google) and its dabblings in urban design and management. 

Alphabet’s long-term goal is to remove barriers to the accumulation and circulation of capital in urban settings – mostly by replacing formal rules and restrictions with softer, feedback-based floating targets. It claims that in the past “prescriptive measures were necessary to protect human health, ensure safe buildings, and manage negative externalities”. Today, however, everything has changed and “cities can achieve those same goals without the inefficiency that comes with inflexible zoning and static building codes”.

This is a remarkable statement. Even neoliberal luminaries such as Friedrich Hayek and Wilhelm Röpke allowed for some non-market forms of social organisation in the urban domain. They saw planning – as opposed to market signals – as a practical necessity imposed by the physical limitations of urban spaces: there was no other cheap way of operating infrastructure, building streets, avoiding congestion.

For Alphabet, these constraints are no more: ubiquitous and continuous data flows can finally replace government rules with market signals. Now, everything is permitted – unless somebody complains. The original spirit behind Uber was quite similar: away with the rules, tests and standards, let the sovereign consumer rank the drivers and low-scoring ones will soon disappear on their own. Why not do this to landlords? After all, if you are lucky to survive a house fire, you can always exercise your consumer sovereignty and rank them down. Here the operating logic is that of Blackstone Urbanism, even if the techniques themselves are part of Google Urbanism.

Google Urbanism means the end of politics, as it assumes the impossibility of wider systemic transformations, such as limits on capital mobility and foreign ownership of land and housing. Instead it wants to mobilise the power of technology to help residents “adjust” to seemingly immutable global trends such as rising inequality and constantly rising housing costs (Alphabet wants us to believe that they are driven by costs of production, not by the seemingly endless supply of cheap credit).

During the debate Wednesday, LaToya and Desiree were asked a question about the ability of politics to respond to change on people's behalf.  I've transcribed the candidates' very different answers.

Q: "Proposed changes such as those in the Urban Water Plan may make dramatic changes to the physical face of the city. How will you address environmental justice concerns?"

CHARBONNET:  "Well you have got to make sure these changes don't just affect poor neighborhoods and those with the lesser voices in town. It's hugely important. We do have to accept change. That is just part of growth. However, I hearken back to the days of my parents' time when they had to put that Interstate over Claiborne Avenue. And how that was such a thriving neighborhood and how it changed that neighborhood forever. And there has always been the feeling that it was done in that neighborhood because it was a primarily African American neighborhood. We cannot make those mistakes again. We've got to change. But we also have to consider the lives of the people in these neighborhoods who are going to be affected."

CANTRELL: "Ensuring environmental justice has to be a priority in the city. And even as we talk about advancing the building on high dry ground. That is something that has not been well received. Even in this post-Katrina environment. Often times I get complaints about.. oh.. blocking my view to the point where, uh, me and my staff, we say it's a 'I have a view' speech. So we really have to encourage people to adapt to change. But it's all about protecting the environment. Protecting the lives of all of our people. Through the history of our city, we know that there has been definitely a disservice to predominantly minority communities. We know that. But in terms of mitigating those environmental hazards, it needs to be a priority. And it will be one under my administration. But putting in also incentives uh so that future development can occur... again with not damaging the environment." 

The question doesn't state this explicitly but Charbonnet interprets it to address the social and economic impacts of urban environmental policy.  Her concern here is making sure those with "lesser voices" don't bear the highest costs associated with implementing the Urban Water Plan.  Another way to put that is politics has a role to play in ensuring the poor and voiceless aren't bulldozed in the name of progress.

Cantrell, on the other hand, seems to discount even the idea of dissent. She tells us about a joke she and her staff have about constituent complaints about land use issues. To her the problem is more about convincing the disaffected to "adapt to change" than it is about taking seriously the harsher effect of change on those with lesser means to adapt.  Although she does express some concern for how it might affect developers.  They still need "incentives" for some reason.

It's a remarkable answer coming from a person who got her start in politics complaining to the city about the "green dot" a water management plan once placed over her neighborhood. But it does fit in well with the prevailing "Google Urbanism" Morozov is describing. No doubt the next mayor will have no trouble running her administration "like a business" too. It looks like the current mayor has already given her a head start with Sewerage and Water Board, anyway.