Aramark
Philadelphia, Pennsylvania
February 24, 2008 Naperville Sun
A company hoping to win another contract at the DuPage County Jail has donated thousands of dollars to elected county officials. Aramark, a Philadelphia-based company that has provided the jail's food service for 21 years, has poured $14,770 into campaign coffers of State's Attorney Joe Birkett, Sheriff John Zaruba, County Board Chairman Bob Schillerstrom and others since 1999, according to the Illinois State Board of Elections. County Board members Brien Sheahan, Debra Olson and Mike McMahon have received several hundred dollars each. In a bidding process fraught with ambiguity and conflict, Aramark has been fighting for more than a year to continue serving food to jail inmates. When the bid was redone for the third time in December, the company submitted a $949,616 bid that was $6,000 lower than that of its competitor, Minnesota-based A'viands. But after the state's attorney's office said Aramark submitted a menu that didn't meet requirements, officials recommended the bid be awarded to A'viands. Aramark's menu diverged slightly by offering breaded fish patties rather than the specified fish fillets and 12-ounce instead of 8-ounce oatmeal servings, Assistant State's Attorney Tom Downing said. Potential savings -- However, County Board members are giving Aramark another shot at the contract, opting for a fourth bid instead of awarding the contract to A'viands. They say the county can save thousands of dollars by changing bidding requirements. Instead of stipulating a specific menu, board members want to mandate only certain nutritional requirements, as was done during the second round of bidding. Allowing bidders to submit their own menu resulted in a bid from Aramark that was $120,000 less than when it followed a menu mandated by the county. That cost difference is enough to justify yet another bid, said Sheahan, calling the whole process "ridiculous." "We're basically having a $120,000 argument over whether milk and oatmeal will fit on a tray, and I think we owe it to taxpayers to make sure we are getting the best value for their money," he said. "We're not interested in spending extra every year so people at the County Jail can eat fish fillets instead of fish sticks." Nothing to hide -- Sheahan said a $500 contribution from Aramark to his primary campaign had nothing to do with his support for a fourth bid. "I really don't care whether Aramark gets it or not," he said. "I want the lowest bid to get it. I think the interest of the committee is just to get the best value for taxpayers." Saying she believes Aramark has submitted responsible bids, Olson, of Wheaton, said she supports a fourth bid to potentially save the $120,000. "This is about saving taxpayers money," said Olson, who noted that she has supported extending the temporary contracts to A'viands. "Any implications that my motivations are other than in the best interests of taxpayers is insulting." Birkett, who has received $3,600 from Aramark, said the campaign contributions played no role in the opinion rendered by his office, which ruled Aramark's bid noncompliant. "If I'm asked for opinion or legal guidance, I give it, free from any political support I've received," Birkett said. The recipient of $4,500 from Aramark, Schillerstrom sided with the state's attorney, saying Aramark failed to meet the menu requirements. "I believe A'viands is the lowest responsible bidder," he said. "I think it's clear that Aramark did not comply with the bid." Zaruba did not return a phone call seeking comment. Nutrition requirements -- Disputes about nutrition requirements have plagued the bidding process, which began last March. After the county declared A'viands the winner of the first bid, Aramark filed a lawsuit claiming its submitted menus were deficient. Schillerstrom upheld the protest, finding that both companies failed to meet requirements and declared a second round of bidding. For the second bid, the county outlined more specific nutrition standards. But both companies fell short, saying it was impossible to meet sodium requirements. In the third bid, the county hired a nutritionist to create a specific menu. While A'viands said the menu gave clear and specific requirements, Aramark disagreed. "It was crystal clear to us that we were to submit a menu that exactly met those requirements, and that's what we did," said Perry Rynders, CEO of A'viands. Rynders expressed "significant disappointment" at the county's decision to hold another bid, saying no one had disputed that A'viands did meet requirements. Temporary contract -- To keep prison inmates fed, the county has issued a string of temporary contracts to A'viands since July. But it's difficult to attract and hire good workers at the jail while the contract remains in limbo, Rynders said. "It's very difficult for us to find staff to work on a temporary basis," he said. "Each time this comes up, they're wondering if their job is on the line. I don't think the County Board understands how difficult this is on us." Aramark spokesman Tim Elliot said the county should return to a nutrition-based bid instead of one based on a menu. That is standard procedure for most of the 700 correctional facilities the company services worldwide, he said. Aramark is a private company that is the 19th-largest employer on the Fortune 500, employing 240,000 workers in 19 countries. Hospitals, eldercare centers, schools, corporations and sports stadiums are among the company's clients. Board member Jim Healy of Naperville agreed with Aramark that the county's "ambiguous" menu should be thrown out in favor of nutritional requirements. "We don't care what you serve as long as you meet the nutritional standards," he said. The county should have stuck with very basic nutritional requirements as it had done until last year, said board member Jim Zay. "This is insane ... the more people we get involved, the worse it gets," Zay said. "This has been costing us hundreds of thousands more because we've been screwing around with it."

November 7, 2007 Financial Times
Madison Dearborn is preparing a sale of Valitas, a company that provides medical care to prison populations, three sources told mergermarket. An auction for the company will probably kick off early next year, and the company is working on putting together a staple financing package at the moment, according to one of the sources. UBS has been mandated to run the process, the second source said. Valitas’ EBITDA is around USD 50m, according to an industry banker. The company’s main subsidiary, Correctional Medical Services, reached USD 750m in revenues in 2007, according to its website. The company is likely to draw interest from private equity buyers only, as there are no natural strategic buyers for the asset, the banker added. Valitas could draw interest from Maximus, a listed provider of healthcare services to the US government, a second industry banker said. Madison Dearborn backed a management buyout of the Missouri-based company in 1997 from Aramark, the company that provides food service and uniforms to institutions, according to news reports. Under Aramark the division was called Spectrum Healthcare, and included a business that provided contract healthcare services to the US military. That business, however, was sold to Team Health, another Madison Dearborn portfolio holding, in 2002. Team Health itself was sold to the Blackstone Group, in 2005. The company is one of the oldest healthcare investments in Madison Dearborn’s portfolio, the industry banker said. A company spokesperson declined comment, and a Madison Dearborn official did not return calls.

March 18, 2007 The Oregonian
Federal court statistics show that plaintiffs filed nearly 4,200 cases under the federal Fair Labor Standards Act, which governs pay practices, in fiscal 2006, which ended Sept. 30. That's up from 4,040 cases in fiscal 2005 and 2,751 in 2003. In Portland this month, Richard Bird filed a class-action lawsuit against his ex-employer, Aramark Correctional Services Inc. He alleges the nationwide prison-service provider broke Oregon laws by failing to properly pay him and co-workers when they worked overtime, took rest periods and put in for their final paychecks. An Aramark spokeswoman said Friday that the company does not comment on pending litigation. Those claims surfaced in a state court -- Multnomah County Circuit Court, specifically. And although Oregon doesn't track civil cases by cause, attorneys say wage-and-hour claims are numerous in state venues. Why the flood of cases? It's easy for employers to make a mistake and relatively easy for employees to make them pay for it, said Nancy Cooper, an attorney with Bullivant Houser Bailey in Portland. Wage-and-hour rules are complicated and vary across state lines, making national firms such as Philadelphia-based Aramark vulnerable. Oregon, for instance, requires employers to provide paid 10-minute breaks, Cooper said. Arizona does not.

February 3, 2007 AP
The first time Joseph Neubauer took Aramark Corp. private in 1984, the deal was worth $889 million. When he and other managers led a leveraged buyout of the nation's largest food services company a second time, the price tag zoomed to $6.24 billion. And the biggest winner among shareholders at Aramark, which Friday completed its first week as a newly private company? Neubauer and his family, whose holdings soared in value to almost $1 billion. That puts Neubauer, 65, who came to the United States from Israel alone at the age of 14 and said he learned English from John Wayne movies, near the top of the list of beneficiaries from a wave of leveraged buyouts that has swept corporate America in the past year.

August 14, 2006 In These Times
While New Mexico’s landscape may make the state the Land of Enchantment, its rapidly growing rates of incarceration have been utterly disenchanting. What’s worse, New Mexico is at the top of the nation’s list for privatizing prisons; nearly one-half of the state’s prisons and jails are run by corporations. Supposedly, states turn to private companies to cope better with chronic overcrowding and for low-cost management. However, a closer look suggests a different rationale. A recent report from the Montana-based Institute on Money in State Politics reveals that during the 2002 and 2004 election cycles, private prison companies, directors, executives and lobbyists gave $3.3 million to candidates and state political parties across 44 states. According to Edwin Bender, executive director of the Institute on Money in State Politics, private prison companies strongly favor giving to states with the toughest sentencing laws—in essence, the ones that are more likely to come up with the bodies to fill prison beds. Those states, adds Bender, are also the ones most likely to have passed “three-strikes” laws. Those laws, first passed by Washington state voters in 1993 and then California voters in 1994, quickly swept the nation. They were largely based on “cookie-cutter legislation” pushed by the American Legislative Exchange Council (ALEC), some of whose members come from the ranks of private prison companies. Florida leads the pack in terms of private prison dollars, with its candidates and political parties receiving almost 20 percent of their total contributions from private prison companies and their affiliates. Florida already has five privately owned and operated prisons, with a sixth on the way. It’s also privatized the bulk of its juvenile detention system. Texas and New Jersey are close behind. But in Florida, some of the influence peddling finally seems to be backfiring. Florida State Corrections Secretary James McDonough alarmed private prison companies with a comment during an Aug. 2 morning call-in radio show. “I actually think the state is better at running the prisons,” McDonough told an interviewer. His comments followed an internal audit last year by the state’s Department of Management Services, which demonstrated that Florida overpaid private prison operators by $1.3 million. Things may no longer be quite as sunny as they once were in Florida for the likes of Nashville, Tenn.-based Corrections Corporation of America (CCA) and the former Wackenhut, now known as the GEO Group of Boca Raton, Fla. But with a little bit of spiel-tinkering—and a shift of attention to other states—the prison privatizers are likely to keep going. The key shift, Bender explains, is that “the prison industry has gone from a we-can-save-you-money pitch to an economic-development model pitch.” In other words, says Bender, “you need [their] prisons for jobs.” If political donations are any measure, economically challenged and poverty-stricken states like New Mexico are a great target. In this campaign cycle, Democratic Gov. Bill Richardson has already received more contributions from a private prison company than any other politician campaigning for state office in the United States. The Institute of Money in State Politics, which traced the donations, reported that GEO has contributed $42,750 to Richardson since 2005—and another $8,000 to his running mate, Lt. Gov. Diane Denish. Another $30,000 went from GEO to the Richardson-headed Democratic Governors Association this past March. Richardson’s PAC, Moving America Forward, was another prominent recipient of GEO donations. Now, its former head, prominent state capitol lobbyist Joe Velasquez, is a registered lobbyist for GEO Care Inc., a healthcare subsidiary that runs a hospital in New Mexico. But don’t get the idea that GEO has any particular love for Democrats: $95,000 from the corporation went to the Republican Governors Association last year alone. What companies like GEO do love are the millions of dollars rolling in from lucrative New Mexico contracts to run the Lea County Correctional Facility (operating budget: $25 million/year), and the Guadalupe County Correctional Facility ($13 million/year), among others. CCA also owns and operates the state’s only women’s facility in Grants ($11 million per year). To make sure that those dollars keep flowing, GEO and CCA have perfected the art of the “very tight revolving door,” says Bender, which involves snapping up former corrections administrators, PAC lobbyists and state officials to serve as consultants to private prison companies. In fact, the current New Mexico Corrections Department Secretary Joe Williams was once on GEO’s payroll as their warden of the Lea County Correctional Facility. Earlier this year, Williams was placed on unpaid administrative leave after accusations surfaced that he spent state travel and phone funds to pursue a very close relationship with Ann Casey. Casey is a registered lobbyist in New Mexico for Wexford Health Sources, which provides health care for prisoners at Grants, and Aramark, which provides most of the state’s inmate meals. In her non-lobbying hours, it turns out that Casey is also an assistant warden at a state prison in Centralia, Ill. It appears that even for a prison industry enchanted by public-private partnership, Williams and Casey may have gone too far.

May 1, 2006 Bloomberg
Aramark Corp., the food-service company that sells hot dogs and beer at Boston's Fenway Park and Shea Stadium in New York, received a $5.8 billion takeover offer from a group led by its chairman and Goldman Sachs Group Inc. The group, which also includes JPMorgan Chase & Co., Thomas H. Lee Partners LP and Warburg Pincus LLC, bid $32 a share, Philadelphia-based Aramark said today in a statement. That's 14 percent more than its April 28 close. Aramark's shares surged as high as $34.95 as investors bet the company, which also runs college and corporate cafeterias, would eventually fetch more from the buyout group or another acquirer. The company's board formed a committee of independent directors to review the proposal, Aramark said. ``There exists for insiders an opportunity to sell the company to a rival bidder or compete in a bidding war for the company,'' JPMorgan Chase analyst Michael Fox wrote in a report. Fox has a ``neutral'' rating on Aramark. Private-equity firms have announced more than $120 billion of takeovers this year, up from $83 billion in the same period of 2005, according to data compiled by Bloomberg. Pressure to meet quarterly earnings targets and abide by new accounting and governance laws have pushed some companies to go private. Leveraged buyout specialists usually borrow about two- thirds of the purchase price to finance acquisitions. Their goal is to improve the operating performance of the companies they purchase, often by cutting costs, and then sell the companies in two to three years to make a profit.

Beaver County Jail
Beaver County, Pennsylvania
CiviGenics
May 24, 2007 Beaver Times
The Beaver County Commissioners' approval Thursday of a $72,000 payment to settle claims from the Massachusetts company that almost took over the county jail last year brings the total spent on trying to outsource the jail to nearly $1 million. CiviGenics was poised to assume control of the jail in October, but a ruling by President Judge Robert Kunselman ordering the county to obey an arbitrator's decision halted the deal. Instead, the county signed a new contract with jail guards. Commissioners had estimated that the county could have saved as much as $1.9 million annually by outsourcing the jail to CiviGenics. During the last week of December, the county paid CiviGenics $125,000 under the terms of its contract. Thursday's payment will cover additional expenses such as training and travel costs. "It's fair compensation," said Commissioners Chairman Joe Spanik after the board approved the payment. "They showed receipts for what (expenses) were there." In addition to the payments made to CiviGenics, the county's legal fees have reached nearly $793,000, said county financial administrator Rob Cyphert. That figure covers this year, 2006 and 2005, and includes not only work on privatization, but on contract negotiations with the union and settlement talks with CiviGenics. Commissioner Charlie Camp said he didn't regret trying to outsource the jail because "it was well within our rights to do that." Camp said the savings over the life of the guards' contract, estimated at $680,000 annually, will surpass the amount spent on CiviGenics and legal fees so the county won't really lose any money. "I regret we got two bad judgment calls from the arbitrator and the county judge," Camp said. Asked if he regretted pursuing privatization in light of the taxpayer money spent on the wasted effort, Spanik said outsourcing appeared to be a "good deal" for the county, and hindsight is always 20/20. "If I was a prognosticator," he said, "I'd hit the lottery." Initially, CiviGenics asked for $329,000 to cover its costs in preparing to manage the Hopewell Township jail, Cyphert said. Spanik said the county balked at that figure, though, and officials found some expenses they didn't think the county should pay. "We scrutinized the bills they submitted to us," Spanik said. When the $125,000 payment was made, county Solicitor Myron Sainovich said the county might consider reimbursing CiviGenics for additional costs, such as training and travel costs, because the county was unable to give the company any notice before nixing the contract. "Quite frankly, we would've been liable for those (expenses) because we were in breach," Sainovich said Thursday. Sainovich said the $72,000 doesn't compensate CiviGenics for "pain and suffering," but only for verifiable expenses.

January 10, 2007 Beaver Times
Beaver County has met its contractual obligation and paid $125,000 to the company that would have taken over the county jail if a court ruling had not nixed the deal, county solicitor Myron Sainovich said Wednesday. CiviGenics, a Massachusetts-based company, was paid in the last week of December, said Rob Cyphert, the county's financial administrator. Under terms of its contract with CiviGenics, the county was obligated to pay the company no more than $125,000 "for all reasonable and documented start-up expenses" if the county decided against outsourcing the Hopewell Township jail. That's exactly what happened after Beaver County President Judge Robert Kunselman ruled that the county was required to abide by an arbitration decision that prohibited privatization over the life of an arbitration-imposed three-year contract. County commissioners chose not to appeal Kunselman's decision. Instead of handing over management duties to CiviGenics on Oct. 31 as they had planned, commissioners agreed to a new four-year contract that was estimated to save the county about $600,000 a year. Commissioners had spent more than two years studying privatization and at least $500,000 over several months litigating their right to outsource the jail. They claimed the county would've saved $1.9 million a year by contracting with CiviGenics. Last month, commissioners raised county property taxes by 1 mill and laid the blame squarely at Kunselman's feet. The county's tax rate is now 18.7 mills. Sainovich said he hasn't heard of CiviGenics requesting additional money, but the county might consider paying for other verifiable training and travel costs. "The county will try and reimburse them for those (expenses) because we did kind of go up until the last hour," he said.

November 29, 2006 Beaver Times
A county judge believes that even if operations at the Beaver County Jail had been privatized, county residents would still have to pay higher taxes. In a written opinion released Tuesday, President Judge Robert E. Kunselman disputed county commissioners main argument: that turning over operations at the Hopewell Township facility to the CiviGenics company would save enough money that a tax increase could be avoided next year. Kunselman made his ruling in late October; Tuesdays opinion explained his reasoning. For months, commissioners pushed a plan that said that if the Massachusetts-based private correctional services company took over operations at the jail, the county could save $1.9 million annually. The changeover from county to private oversight was halted by Kunselman just a couple of days before the Oct. 30 switch was to take place. Beaver County Commissioners Chairman Dan Donatella said Tuesday afternoon that Kunselmans ruling was filled with errors, omissions and presumptions about the county's budget. He promised a written response to Kunselmans opinion within the next day or two. I am flabbergasted, Donatella said, adding that he thinks Kunselman purposely waited until the day after an appeal period had expired so that his written opinion wouldn't be questioned by a higher court. Earlier, however, commissioners said Kunselmans order barring privatization wouldn't be appealed because it was unlikely that a higher court would overturn the decision. Kunselman declined to comment on Donatellas remarks. Kunselman became involved in the jail issue when Service Employees International Union Local 668 sued the county earlier this year, saying it had to abide by a contract arbitration award. That arbitration included the prohibition of privatization for three years and requiring jail employees to make concessions. The arbitration was rendered moot when the county and jail employees came to an agreement in October on a new four-year contract. In his October opinion, Kunselman ruled there was no legal reason for the county to ignore the arbitration and privatize the jail. Also, Kunselman said in the opinion that during hearings on the arbitration award, county employees said the county would have a $140,000 deficit at the end of November and would be in the red by $3 million at the end of the year, if the arbitration was awarded. Kunselman said there was no direct proof that the arbitration was the reason for the deficit. He said that while the county projected a savings of $1.5 million in the first year of privatization, it also projected a $3 million budget deficit. Thus, we concluded that the county would have to increase taxes to pay for the CiviGenics contract anyway, Kunselman said.

November 9, 2006 Pittsburgh Post-Gazette
The legal fight over privatizing the Beaver County Jail has cost the county about $500,000, and that's just the beginning. The county commissioners will sit down soon with representatives of CiviGenics Inc., the company they had hired to run the jail, to work out a fair compensation for the company's troubles. "We have calculated the cost of preparing to take over the jail," company Chief Operating Officer Peter Argeropulos said, adding that CiviGenics had put more than 50 people through guard training and had assembled complete plans for the takeover and management. He declined to say what the calculated number was. CiviGenics responded to a county inquiry in the summer of last year, offering a deal that would have saved the county about $1.9 million a year. When the union representing the county-employed jail guards couldn't match the savings, the commissioners announced the switch, dropping the union and hiring CiviGenics starting Oct. 31. But four days before the takeover, Common Pleas Judge Robert E. Kunselman ruled that the county had to abide by an arbitration award that gave the union a new contract. The commissioners announced Oct. 31 that they had accepted a deal with the union and would not appeal the judge's ruling. Under the county's contract with CiviGenics, it owes the company $125,000 if the deal gets scratched "through no fault of the county." Asked if the company's costs exceeded $125,000, Mr. Argeropulos replied, "Oh, certainly." But he expressed confidence that a settlement could be worked out.

October 28, 2006 Pittsburgh Post-Gazette
The Beaver County Jail will continue to be run by public employees, after a court ruling yesterday that derailed the county's privatization move. Beaver County President Judge Robert E. Kunselman upheld a June arbitration award that gave the county's jail guards a new three-year contract. The county had set Monday as the date for a Massachusetts firm, CiviGenics Inc., to take over jail operations, a move that would have left the unionized guards out of work. "It still hasn't hit home," union steward and jail guard Tom Trkulja said. "From the beginning we believed the law says what the law says and everybody has to follow it." The dispute has its roots in a series of cost-cutting moves made by the county commissioners over the last three years. Looking to pare the $6 million-plus jail budget, they decided to take proposals for private management. CiviGenics in the summer of 2005 made a proposal that would save the county $1.9 million a year, and with the union contract expiring in December, the commissioners demanded that the union meet that savings. When the union would not, the commissioners declared union negotiations at an impasse and signed a contract with CiviGenics in January. The union contract went to arbitration, but in June, before the arbitration panel finalized its ruling, the county enacted its contract with the private firm. CiviGenics has been hiring and training replacements for the 53 full-time and 17 part-time guards, who are members of Local 668 of the Service Employees International Union. The union, however, asked the court to enforce an arbitration award issued in June, which it regarded as binding. The commissioners argued that since the award would force them to take legislative action to raise money to pay the guards, state law rendered it advisory only. In a hearing before Judge Kunselman on Tuesday, county Financial Administrator Rob Cyphert testified that the county would run out of cash in about a month under the union contract, and would likely have to increase its debt load to stay afloat. The union, however, argued that the county created its own budget crunch by basing its budget on the CiviGenics deal. The county "engaged in bad faith bargaining by establishing a budget which could only be accomplished by the privatization of the prison without the legal authority to make such an assumption," the union's legal brief said.

October 27, 2006 The Beaver Times
Beaver County Courthouse workers voted on a contract proposal Thursday that union officials said was essential to keeping the county jail from being privatized, but results were unavailable late Thursday. Whether their new contract and the one approved this past Monday by jail guards actually save enough money to persuade the county commissioners not to privatize the jail this coming Monday remains to be seen. Service Employees International Union Local 668 members were called to a 4:30 p.m. meeting at the International Brotherhood of Electrical Workers hall in Vanport Township to vote on the proposal that SEIU state officials unveiled in a tense meeting Tuesday. Commissioners Chairman Dan Donatella and Commissioner Charlie Camp said late Thursday they had yet to be informed of the result of the union's vote. Commissioner Joe Spanik could not be reached for comment. The union is under pressure to resolve the situation because Beaver County President Judge Robert Kunselman is expected to issue his ruling today on whether the county must abide by an arbitration decision released earlier this year. If Kunselman would rule that the decision is not binding, the county would be free to pursue privatization. At the Tuesday meeting, SEIU leaders told courthouse workers that their new contract was being tied to the jail guards' contract. The savings from those two contracts would be combined to try to meet the financial demands of county commissioners, who want to privatize the jail to save approximately $1.9 million annually.

October 26, 2006 Pittsburgh Post-Gazette
Management of the Beaver County Jail is up for determination tomorrow, though whether it is by court order or through last-minute labor talks remains to be seen. County President Judge Robert E. Kunselman plans to issue a ruling tomorrow on whether the county can turn jail management over to a private firm Monday morning. Judge Kunselman held a hearing Tuesday and demanded briefs from union and county attorneys by this morning. The county commissioners are calling for a decision by tomorrow on an across-the-board contract offer that would keep the unionized, publicly employed jail guards in place but would include new contracts with five other unions representing county workers. The last-ditch deal was ratified by the jail guards Sunday, but faces an uphill battle with the other unions, which have been working without contracts for almost two years while rejecting similar offers. The unions held a tumultuous membership meeting Wednesday, with no agreement forthcoming. If the unions decline the contract offer and Judge Kunselman rules in the county's favor, CiviGenics Inc. will take over jail management Monday. The takeover would culminate a two-year effort by the commissioners to cut costs at the Hopewell facility.

October 25, 2006 Beaver Times
As the deadline for privatizing the Beaver County Jail looms closer, it appears the only way for jail guards to avoid losing their jobs is for courthouse union members to accept concessions, too. But, if an emergency meeting Tuesday of Service Employees International Union Local 668 members who work at the courthouse is any indication, those jail guard jobs are as good as gone. Courthouse workers were summoned to a meeting with state SEIU officials at the International Brotherhood of Electrical Workers hall in Vanport Township to hear a last-minute proposal to save the jobs of their SEIU brethren at the jail. Once there, according to one employee who attended the meeting but asked not to be identified, union officials told courthouse workers to accept the contract terms presented or Massachusetts-based CiviGenics would take over the jail. Some guards have applied to and been hired by CiviGenics, but most would be laid off if the company took over. The employee said the proposal would have workers pay 1 percent toward health-care insurance costs in 2007 and 2008 and 1.5 percent starting in 2009. Employees would receive raises of 2.5 percent on Jan. 1; 3 percent in 2008 and 3.5 percent in 2009. Courthouse workers have been without a contract since Jan. 1, 2004, and negotiations have snagged on wages and the county's demand that employees start contributing to health insurance costs. Other terms, according to the employee, include a one-week reduction in the maximum amount of vacation earned (from five to four weeks) and the loss of three holidays (Flag Day, Dec. 26 and an employee's birthday). The employee said the raucous meeting ended with frustrated courthouse workers leaving without taking a vote. Tuesday's meeting followed a vote by jail guards Monday to accept a contract proposal. Union officials would not publicly discuss the contract, but one said it was similar to an arbitration decision released earlier this year. That decision reduced the number of full-time guards, froze wages for jail guards for three years and implemented a 1 percent contribution toward health insurance. But it also prohibited the county from privatizing the jail for three years. County commissioners, though, rejected the arbitration decision, saying that the purported $450,000 in savings fell short of the estimated $1.9 million the county could save by having CiviGenics manage the jail in Hopewell Township. CiviGenics is scheduled to take over the jail Monday, so pressure is mounting on jail guards to do something or face layoffs. Whatever the guards agreed to apparently still didn't meet the commissioners' financial demands, so courthouse employees were asked to take concessions in order to package a cost-saving deal to the county. One flier being circulated around the courthouse Tuesday perfectly illustrated the feelings over the proposal. "We are not happy about this and hope that everyone will not be blackmailed by the commissioners," the flier read. In a related matter Tuesday, attorneys for the SEIU and the county debated the merits of the arbitration decision before Beaver County President Judge Robert E. Kunselman. Both sides said they expect Kunselman to issue a decision by Friday. The union wants Kunselman to order the county to abide by the arbitration decision, while county commissioners argue that the ruling would force them to raise property taxes to pay for the jail. Before that hearing began, Claudia Lukert, the SEIU's attorney, withdrew the union's request for an injunction, but she refused to explain why.

October 17, 2006 Beaver Times
A hearing that could decide the fate of the Beaver County Jail is expected to be moved up a week, as a final deadline looms. Civigenics is scheduled to take over management of the jail on Oct. 30, in a move that county commissioners have billed as one that will save taxpayers money. Within the past few weeks, representatives of Service Employees International Union Local 668 filed suit against Beaver County, asking a judge for an injunction that would stop the switchover from county to private supervision. Under the changeover, dozens of current jail guards would lose their jobs.

October 12, 2006 Beaver Times
Beaver County President Judge Robert Kunselman apparently doesn't believe in the old idiom "A day late and a dollar short." Even though CiviGenics is poised to take over management of the county jail Oct. 30, Kunselman has scheduled a hearing on a request for an injunction from the jail guards' union for Oct. 31. Beaver County Commissioners Chairman Dan Donatella said the head-scratching decision by Kunselman would not stop CiviGenics from taking over the jail as scheduled. "We can't sit around and speculate on what is going to happen," Donatella said. The judge's decision is bewildering because county officials have made it clear over the last few weeks in newspaper articles and letters to jail employees that CiviGenics would assume control Oct. 30. Kunselman did not respond to a telephone message left at his courthouse office Wednesday seeking an explanation for his decision. Dave Ramsey, the jail guards' union representative with Service Employees International Union Local 668, also did not return a message left at his office. To win an injunction, county solicitor Myron Sainovich said the union must prove to Kunselman that it is likely that it would prevail in litigation and that irreparable harm would occur if the jail were privatized. "I don't believe they can show that," Sainovich said. The Pittsburgh law firm of Thorp, Reed & Armstrong is representing the county in litigation about the jail. In a one-page order, Kunselman gave both sides until Oct. 27 to submit briefs "on the question of whether or not injunctive relief can or should be granted." This is the second recent court decision on the jail takeover that has raised the eyebrows of county officials. Six of the seven judges rejected a county request to recuse themselves from litigation involving the jail to avoid conflicts of interest. Judge Deborah Kunselman removed herself from any hearings citing her former position as county solicitor.

October 5, 2006 Pittsburgh Post-Gazette
Beaver County labor leaders might soon face a touchy, difficult choice. They hate seeing the county bringing in a private firm to run the county jail, and they feel betrayed by Democratic Commissioners Dan Donatella, a longtime friend of labor, and Joe Spanik, a labor official elected in 2003. But would they go as far as to shut down all political activities? Would they punish Mike Veon, of Beaver, and Vince Biancucci, of Center, incumbent Democratic state legislators counting on union support for re-election? Such a request is implied in a Sept. 26 letter from Kathy Jellison, president of Local 668 of the Service Employees International Union, to its members who are county employees working at the jail. "It is no longer acceptable for local party leaders and other elected officials to remain silent while asking us to help them," the letter says. "They must stand with us." The letter says Local 668 plans "to demand an immediate suspension of all electoral activity in Beaver County by organized labor. ... We are requesting that labor organizations shut down phone banks, labor walks and all other in-kind contributions. ... We are requesting that you and/or your family members not take part in any candidate on the ballot in the county. Cash contributions should be suspended as well." In a county that is still heavily Democratic and where organized labor is still a huge political force, the idea has people nervous, waiting to see if the request is actually made.

October 3, 2006 Beaver Times
In an order signed Monday, only Judge Deborah Kunselman recused herself from hearing any arguments, citing the fact that she was county solicitor when the move to privatize the jail began. The county had asked the judges to remove themselves from any cases concerning litigation with Service Employees International Union Local 668, which represents the jail guards. SEIU opposed the county's request, insisting that any arguments should be heard by a Beaver County judge. The union has asked for an injunction to halt the county from handing the reins of the jail to CiviGenics on Oct. 30 and it has asked the court to order the county to abide by an arbitrator's contract decision that prohibited the county from privatizing the jail. County commissioners have said the decision was not binding and that they don't have to obey it because doing so would force them to pass a tax increase to pay for jail operations. "This is a Beaver County problem," said Dave Ramsey, the jail guards' SEIU representative. "We're satisfied that this is going to stay before Beaver County judges." Ramsey said he found it insulting that Beaver County tried to get the jail litigation "shipped off to another county."

September 28, 2006 Pittsburg Post-Gazette
Barring further legal action, private enterprise will manage the Beaver County Jail beginning Oct. 30. The county issued a letter Tuesday informing jail workers -- who are all Beaver County employees -- that Civigenics Inc. would be taking over jail operations. The Marlborough, Mass., company operates prisons nationwide, including the jail in Columbiana County, Ohio, which borders Beaver. The announcement was not unexpected, since the county activated its contract with Civigenics June 22, and the contract gave the company 120 days to take over operations. The move has been opposed in court, however, by the local unit of the Service Employees International Union, representing corrections officers at the jail.

August 3, 2006 Pittsburg Post-Gazette
Lawyers representing Beaver County do not think county judges would be biased in the case pitting the county against its jail guards' union. But they do think there is an appearance of the possibility of bias, and are thus asking that the county's seven judges be recused from the case -- meaning it would be handled by a retired judge or one from another county. The county's attorneys -- Joseph Friedman, Kurt Miller and Amy Herne, of Thorp Reed and Armstrong, Pittsburgh -- made the recusal motion yesterday. "Because the county has set aside 10 percent of the general fund budget for the jail, any deviation from that budget will have a direct and material impact on the other operations funded through the general fund, including the courthouse and the court of Common Pleas," the argument for recusal reads. The judge, whoever it eventually is, will play at least a minor role in deciding the fate of the county jail, whether it will continue as a county-run, union-worked facility or whether it will be privately run. The county has signed a contract with a private firm, CiviGenics Texas Inc., to take over jail operations, looking for a savings of about $1.9 million a year. Meanwhile, the county went through arbitration with the guards' union over a contract that expired at the end of 2005, and the arbitration panel signed off on a deal that would keep the union guards in place but would cost the county more. The union regards the arbitration award as binding. The county regards it as advisory, arguing that holding to it would force county commissioners to take legislative action in the form of a tax hike, and that arbitration can't force a county to take legislative action. That's an argument the commissioners set in stone last Thursday, passing a three-page resolution stating the position that the arbitration award is advisory only and empowering the county's attorneys to fight it. The resolution states that county funds are already earmarked for other departments and programs, many of which are mandated by the state or federal government. Reserves need to be protected in case of cash-flow problems, meaning the only way to pay for the arbitration award would be to borrow money, paying it back through higher taxes later. "The commissioners hereby reject the award as an unconstitutional infringement on the legislative powers of the commissioners, and deem the award to be advisory only in nature ..." the resolution reads. The resolution brought a long pause from Commissioner Joe Spanik, a labor leader before his 2003 election. "That's a tough one," he said quietly, before eventually seconding Commissioner Charlie Camp's motion and voting for the resolution. After the meeting, Mr. Spanik said he felt the advisory nature of the award to be up to the courts to determine, though he backed the county's stance. The union, Local 668 of the Service Employees International Union, has filed a petition asking the court to enforce the arbitration award, and has also filed a complaint with the Pennsylvania Labor Relations Board.

July 20, 2006 Pittsburgh Post-Gazette
Beaver County Commissioners are going full-steam ahead with plans to privatize the county jail while the union representing the guards is chugging right back with legal action to stop the move. "We feel we have to go forward with it," commissioners' chairman Dan Donatella said. "There is too huge a savings for the taxpayers for us not to." Meanwhile, the county's contractor, CiviGenics Inc., is interviewing potential guards. In response, the union: On July 10 filed a petition asking the county Common Pleas Court to uphold a favorable arbitration award. On July 12 filed a complaint with the state Labor Relations Board. On Monday filed a motion for an injunction to keep the county from continuing its move to CiviGenics. "The county commissioners want to be above the law, to ignore the arbitration award and do what they want anyway," union steward Tom Trkulja said. The issue has roots going back to late 2004, when the commissioners hired a private firm to manage the county-owned nursing home and started considering the jail as another candidate for privatization. The county put out a request for proposals early in 2005, and CiviGenics, based in Marlborough, Mass., offered a plan in June 2005 that included $1.8 million in annual savings. The county asked the guards' union to offer similar savings in a new contract -- the old labor agreement expired Dec. 31 -- but the contract went to arbitration when the union declined to match the private offer. On June 7, after seeing a preliminary proposal from the arbitrator, the county told the union it would go ahead with the CiviGenics deal. It sent an official letter to that effect June 22, the same day the arbitration award was announced. The union ratified the arbitrator's proposal, which offered about $400,000 in savings. The union -- Local 1168 of the Service Employees International Union -- contends that the arbitration award is legal and binding. "They can't just ignore it," business agent Dave Ramsey said. The county contends that while arbitration can determine what a contract will include, it can't stop the county from simply walking away and going in a different direction. "If an arbiter has that kind of power" -- to force a county into a union contract if it has other options -- "then the contract will run forever, and just keep getting renewed," Mr. Donatella said. In fact, Mr. Donatella said, the dispute could end up touching on some important uncharted territory. Depending what happens, the courts could end up determining whether counties have an automatic right to subcontract work, or if they only have that right when it is specifically allowed in their union contracts. "Many, many, many counties are watching this case," he said. If counties have a general right to employ subcontractors, it would make privatization a lot easier. Beaver County's old union contract said nothing about subcontracting work to a private business. The county contends that since it is not specifically forbidden, it is an option the county has. "That's a management decision," Mr. Donatella said. "I can't believe we don't have the right to manage." The union contends that since the arbitration award does include language on subcontracting -- the award says the county cannot subcontract work during the length of the new, arbitrated union contract -- then the county's hands are tied. "My understanding of the law is that if it isn't in the contract then you have to bargain for it," Mr. Ramsey said, "and that's what we did." He said top SEIU officials, like county officials, are watching the case closely. "They have to decide how they want to use their resources," he said. "I don't know if we're going to have purple shirts" -- the union's trademark color -- "marching in Beaver or not." Meanwhile, CiviGenics has until early September to take over jail operations, barring an injunction, and already is interviewing potential jail guards, including some union members. "Nobody really wants to work for this company," Mr. Trkulja said, "but some of the guys, because of the way their lives are, are going to have to." He said generally people are keeping quiet on the issue. There have been some hard feelings and a little name-calling, but nothing more serious than that, and union leaders are not asking members whether they are doing interviews. "There are mixed emotions down there," he said. "A lot of people are at somewhat of a low point."

July 18, 2006 Beaver Times
The union representing the Beaver County Jail guards filed for an injunction on Monday to stop the county from contracting with CiviGenics to manage the Hopewell Township jail. Service Employees International Union Local 668's motion for an injunction filed in Beaver County Court said allowing the county to contract with the Massachusetts-based CiviGenics would "cause immediate and irreparable harm to the employees," who would "suffer a loss of employment, medical coverage and other benefits ....." SEIU asked the court to grant an injunction "until (the union) has fully exhausted the administrative and judicial remedies." One of those remedies, presumably, is the union's request - filed July 10 - to have the county court force the county commissioners to honor an arbitration decision released by a panel last month. A neutral arbitrator and a union representative on the panel approved the decision, while county Solicitor Myron Sainovich, the panel's third member, rejected it. The union insists the arbitration decision is binding, but the county disagrees. Under the three-year decision, wages would be frozen and the number of full-time jail guards would be reduced, but the county would also be prohibited from privatizing the operation of the facility. The county's attorneys have said the arbitration decision would save the county $450,000 annually for three years, compared to the more than $4 million that would be saved by contracting with CiviGenics through 2008. Asked if the request for an injunction would affect the ongoing privatization process, Sainovich replied, "Not at this point in time." Claudia Lukert, SEIU's Harrisburg attorney, didn't return a message left at her office. County financial administrator Rob Cyphert said the county's contract with CiviGenics calls for the company to be reimbursed up to $125,000 for recruiting expenses "if they don't ultimately end up running the operation at the jail." A temporary halt to the process would not trigger that clause, Cyphert said. CiviGenics asked current guards to submit applications by July 14, and it was scheduled to hold a job fair at Penn State-Beaver today.

June 29, 2006 Beaver Times
How frayed has the relationship between Beaver County and the union representing its jail guards become amid contract arbitration and a move to privatize the jail? So tattered that when Service Employees International Union Local 668 business agent Dave Ramsey was told Wednesday that the county commissioners were disappointed in an arbitration decision that saved the county "only" $450,000 annually, this was his reaction: "Tell them to go (expletive) themselves, and you can tell them I said that." Well, then. The relationship won't improve now that an arbitration panel has issued a decision that would prohibit privatization from happening through 2008 and reduce the number of full-time guards, but would also freeze wages for three years and implement a 1 percent employee contribution toward health insurance. That's because county commissioners probably won't accept the deal, which they say falls far short of the estimated $1.9 million the county would save if the jail was outsourced to the Massachusetts company CiviGenics. "It is unlikely that this board is going to accept that," Commissioners Chairman Dan Donatella said of the decision by arbitrator Marc Winters that was agreed to by SEIU representative Rick Adams. The decision was issued Thursday, only hours after commissioners declared negotiations at an impasse and voted to authorize CiviGenics to start the takeover process. "We dislike just about everything (in the decision), but we're pleased they're not going to have any (privatization) for the life of the contract," Ramsey said. County Solicitor Myron Sainovich - who along with Winters and Adams made up the arbitration panel - rejected the decision. The arbitration decision would not keep the county from privatization, he said.

June 23, 2006 Beaver Times
A Massachusetts company could take over operation of the Beaver County Jail by October after county commissioners on Thursday declared negotiations with the guards at an impasse and unanimously approved privatizing the facility. "This," said Commissioner Joe Spanik, "is the next step forward." County Solicitor Myron Sainovich said officials hope to have CiviGenics in place no later than Oct. 15. Sainovich, who represented the county on the three-member arbitration panel in April, said Butler County arbitrator Marc Winters, the agreed-to neutral party, gave his proposal in May, but the county rejected it. Sainovich said the union rejected the proposal as well, although no union representative would confirm that on Thursday. Rick Adams, a representative for Service Employees International Union Local 668, argued for the jail guards in arbitration; he could not be reached at his Erie office. Sainovich would not release Winters' proposal because it was not a final decision. Winters did not return a telephone message left on Thursday. But Sainovich said late Thursday afternoon that Winters was preparing a revised proposal that would be given to both sides for consideration. Tom Trkulja, the guards' chief union steward, said he was unaware of the commissioners' vote.

June 23, 2006 Tribune-Review
A private company will take over management and operations of the Beaver County Jail by Oct. 15, county commissioners said Thursday. Putting CiviGenics Inc. in charge of the 360-bed jail in Hopewell will save the county $1.9 million in the first year of the deal, commissioners said in a news release. The county will pay CiviGenics $14.6 million over three years to run the jail. The union representing 72 county jail guards fought the move, fearing pay cuts and the loss of benefits, and they questioned private prisons' safety record and officials' rosy savings projections. "You shouldn't be imprisoning people for profit," Service Employees International Union Local 668 business agent Dave Ramsey said.

April 20, 2006 Pittsburgh Post-Gazette
The fate of Beaver County's push to privatize the county jail now rests in the hands of Marc Winters, an arbiter from Butler County. Beaver County officials and jail guards testified before a three-member arbitration panel April 12 and last Thursday, making their cases for alternative versions of how the Beaver County Jail should be run. With one of the three panel members selected by the county and one by the guards, however, it is essentially up to the one neutral arbiter, Mr. Winters, to say what should happen. The county has signed a contract with a Massachusetts firm, CiviGenics Inc., to take over management of the jail. The county says it can save up to $1.6 million a year by moving the jail into the private sector. The corrections officers union, working without a contract since Jan. 1, made a counterproposal, but it could not match the savings promised by CiviGenics. The union filed for arbitration after the county signed the CiviGenics contract. Neither guard nor county representatives would talk in detail about the proceedings, which were closed to the public. County financial administrator Rob Cyphert and jail Warden Bill Schouppe were the county's primary witnesses; three corrections officers testified for the union.

March 27, 2006 Beaver Times
The bitter contract negotiations between Beaver County Jail guards and the county will go before an arbitration panel next month at the county courthouse. County solicitor Myron Sainovich said last week that the county and the jail guards' union will square off April 12 and 13 in closed sessions. A three-member panel will hear arguments, but the decision essentially boils down to which side can win over the one neutral arbitrator. Sainovich will sit on the panel as the county's representative, and Rick Adams, a Service Employees International Union Local 668 business agent, will represent the guards. Butler County lawyer Marc Winters was picked as the neutral member by the county and the union. Sainovich said the two-day hearing will resemble a trial, with county officials involved in negotiations being called to testify. Although the county is poised to privatize the jail and allow CiviGenics to take over operations, county commissioners have said they would keep the jail under county control if they could get the financial concessions they're looking for. County officials have said the Massachusetts-based CiviGenics could save Beaver County $5 million over the next three years, but jail guards have questioned the validity of those estimates. The county has said the guards have not offered savings anywhere close to what CiviGenics is promising. As the arbitration process winds to a conclusion, the county continues to operate the jail, and guards continue to work under the terms of the contract that expired at the end of 2005.

February 16, 2006 Pittsburgh Post-Gazette
Beaver County commissioners yesterday unanimously passed a 2006 budget with no tax increase. The county's millage rate will hold at 17.7 mills, the same as it was in 2005. The projected total budget is roughly $257.5 million for the county's 29 separate funds and includes no major cuts or additions in funding or programs. The budget likely will be amended in the near future depending on the outcome of an arbitrator's decision on a contract between the county and the Local 668 of the Service Employees International Union, which represents the county jail's roughly 80 guards. The guards' contract expired on Dec. 31, and the two sides are at an impasse after the county decided to contract with a private firm, Civigenics, to run the jail. The county hopes to save upward of $1.5 million a year by switching to a private firm; guards are concerned that they might have to face sizable pay and benefit cuts to retain their jobs with a private company.

January 24, 2006 Beaver Times
Beaver County will pay CiviGenics $14.6 million over the next three years to manage the county jail, and it retains the right to cancel the contract at any time without giving a reason. Peter Argeropulos, CiviGenics' chief operating officer, said the deal is pretty typical of the company's other contracts. Current jail guards have said that private guards make considerably less than the $17.33 per hour the county now pays. Argeropulos said the wage scale would range from $10 per hour for entry-level guards to $14 per hour for guards with seniority. The benefits package would be a dramatic change for guards, who now pay nothing for health insurance. Argeropulos said company employees generally pay about 30 percent of health-insurance costs.

January 19, 2006 Beaver Times
Before the Beaver County Prison Board approved privatizing the Beaver County Jail, guards offered a plan that would have saved the county $1.6 million this year, the same as a private company has promised, a union official said Wednesday. "We tried to save (the county) as much money as we could," said Tom Trkulja, the chief union steward for the jail guards. Commissioners Chairman Dan Donatella said the contract with Massachusetts-based CiviGenics was executed Wednesday. "It's signed, sealed and delivered," he said. Trkulja charged that the county is demanding outrageous concessions from the guards that no other county unions have been offered. He said the guards have been asked to accept a 25 percent cut in hourly wages and pay a 25 percent health insurance premium while other county employees pay 1 percent. The county also wants to slash the number of full-time guards from 55 to 49 and part-time guards from 22 to 15, Trkulja said. Although it doesn't want to hurt other county workers, the union is exploring what bumping rights guards might have so they could move into other county jobs if they get displaced by CiviGenics, Trkulja said.

January 18, 2006 Beaver Times
Nearly two years after the Beaver County Commissioners first talked about privatizing the Beaver County Jail, the county prison board on Tuesday authorized them to contract with a Massachusetts company to run the Hopewell Township facility. "It's a contract that is good for the county," said Rick Towcimak, prison board member and county controller. Under the proposed contract with CiviGenics, the county would save a projected $5 million over the next three years. Most of the savings would come from the county no longer employing jail guards and having to pay their salaries and benefits. Tom Trkulja, the chief union steward for the county's jail guards, said the vote was a surprise to him and he again insisted that privatization would only create problems for the county and its residents. "Taxpayers are going to lose on this," Trkulja said. "We're all going to lose." Towcimak said he was initially skeptical about the savings expected from CiviGenics, but he is now convinced the figures are realistic. Also, he said the public would not be endangered by having a private company operate the jail, something the current jail guards have repeatedly warned about. "We've seen things happen down at the jail now, and it's not private," said Towcimak. Last month, a jail sergeant was fired for mistakenly releasing an accused child molester, the third time the sergeant had wrongly released an inmate in 2005. Towcimak said he had also received assurances from CiviGenics that the "vast majority" of jail guards would be offered jobs at comparable wages. Trkulja bristled at those comments, saying the union has been told that each full-time guard would have to accept an $18,000 pay cut.