Fighting the Privatization of Public School Buildings

Prince George’s County, MD

Student Population: 132,000 | Government type: School District | Topic: Public Goods

Hyattsville Middle School is one of several schools in Prince George's County that could be rebuilt under a proposed public-private partnership agreement. (Photo: PGCPS).

OVERVIEW

The privatization of public infrastructure—often called a “public-private partnership,” “P3,” or “PPP”—has become more popular in the US in recent years. State and local governments have signed P3 contracts to build or sell off highways, bridges, water systems, courthouses, and other forms of public infrastructure. P3s have never been used to build public schools—one of the most common forms of public buildings—but this might soon be changing.

In 2019, Maryland’s Prince George’s County and the city of Stamford, Connecticut, began exploring P3 models to finance, design, build, and maintain school buildings. In Stamford, a number of city council members raised concerns about the lack of transparency in the procurement process, which led to the city eventually abandoning the proposal. However, Prince George’s County and Prince George’s County Public Schools (PGCPS) are moving forward with an estimated $1.2 billion, 30-year P3 plan to build and maintain five middle schools and one K-8 school. 

As in Stamford, a severe lack of transparency has kept Prince George’s County residents in the dark concerning the details of the plan. Public officials who backed the proposal claimed that signing a P3, which they called “alternative construction financing,” would be faster and cheaper than conventional methods of public financing for school construction. Yet the underlying calculations used to reach this finding were never released to the public.

For a number of reasons, P3s are a risky endeavor for state and local governments. They are more expensive than public financing; they can increase the risk of work stoppages; and they lack the transparency and accountability of traditional public procurement. In addition to concerns over the district losing money, the corporate developers have made dubious claims about their ability to deliver the projects on time. While a traditional school allegedly takes 10–12 years to build, the P3 plan promises to build schools in only three to four years. Although the district denies that the P3 plan will impact county debt capacity, the Governmental Accounting Standards Board (GASB) recently ruled that this is not true, and that the P3 plan will require the county to account for the financing as debt.

Both the county council and school board ignored these risks. In October 2020 they voted to move forward with the final phase of the procurement process, an “exclusive negotiating agreement” with the chosen team of contractors. It is still possible to change the terms of the final contract, although the county and district are not required to share it with school board members or the public before it’s signed.

Collaborative Governance

It is clear that Prince George’s County’s P3 procurement process was rushed and lacked transparency. County and district leaders did not adequately convey the risks involved in this scheme, and the school board was given no input aside from passing a resolution to examine the contract in more depth. 

Over the course of 2020, concerned representatives, residents, and community organizations mounted a campaign to demand more transparency and public input. The Keep PGCPS Public campaign, headed by In the Public Interest, Our Revolution PG and Board Member Raaheela Ahmed, asked essential questions and demanded the public release of documents like the proposal’s Value for Money (VfM) analysis. A town hall was held to share the risks of P3s and to channel resident concerns into emails and calls to elected leaders.

Unfortunately, by the time this campaign gained momentum, the procurement process was too far along and the board had approved the private developer’s proposal. Now, the Keep PGCPS Public campaign hopes to influence the process of finalizing the contract. Specifically, they want to ensure that the final contract includes protections for the public in terms of control over the new facilities once they’re built, as well as minority-owned business involvement.

Emphasis on equity

PGCPS is the first school district in the country to privatize school building construction at this size and scale. The largely-minority district will serve as a test case for future attempts across the country. 

PGCPS is also already going into 2021 with a multi-million dollar deficit. The district stands to lose millions more with the current P3 plan. This will likely lead to the closure of programs and initiatives, which will disproportionately impact students of color. The north area of the county, with a growing Latinx population, has the most enrollment growth. The P3 proposal will aid certain communities in the county with brand new buildings at the expense of funding crumbling infrastructure in overcrowded areas.

The P3 model has been shepherded by leaders who refuse to acknowledge the real issue the school district faces: the ongoing disinvestment in public education. The district fundamentally lacks the resources and support necessary to fund and build quality schools, including the in-house expertise required to complete projects on time. The P3 investment model transfers power from public institutions to private corporations. Instead of making the district reliant on these for-profit entities and further disempowering our communities, we need an increase in public financing and an expansion of public services that will directly serve our communities.

Analysis

• Maryland, particularly under its current governor, is supportive of public-private partnership deals to help finance state and local infrastructure.

• Local government dynamics: The school board is relatively moderate and generally avoids controversial decisions and protracted fights. 

• Policy impact (moderate): Attempts to prevent long-term detrimental privatization deals are critical in maintaining public control over assets and ensuring transparency; the fight is ongoing to shape the deal into the best possible outcome for students and the district. If successful, the strength would be particularly significant.

OTHER POLICY EXAMPLES

In 2015, Miami-Dade County (Florida) added a potential project to build a water treatment plant in Miami Heights to its Capital Improvement Plan. The county’s mayor also discussed using a P3 for the project in meetings with the county council. A county councilmember notified Local Progress and In the Public Interest about the plan.  In the Public Interest examined state-level laws that would impact the proposed plan, including Florida’s P3-enabling legislation.

Once the project began the procurement phase, In the Public Interest weighed in on the Request for Quotation (RFQ), using questions from Understanding and Evaluating Infrastructure Public-Private Partnerships (P3s). They also posed these questions to county staff in meetings. Next, the organization weighed in on the Value for Money (VfM) analysis, calling into question the assumptions that the county had used to come to the conclusion that a P3 would be the best option. Finally, they published a strategic op-ed in the Miami Herald, targeted at the mayor’s administration. All of this was done in coordination with the county councilmember who was concerned about the deal and proved to be a successful fightback effort.

Last updated: January 19, 2021

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