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Cities And States Try To Crack Down On Distracted Bicycling

By Jenni Bergal, Stateline.org (TNS)

WASHINGTON — Worried that bicyclists who chat, send messages or listen to music on smartphones are creating a danger, a number of cities have banned cyclists from using hand-held cellphones or texting while riding. And several states prohibit bicyclists from using headphones or earplugs.

The efforts to reduce the risk to cyclists, pedestrians and motorists come as cities are trying to become more bike-friendly, and people increasingly turn to electronic devices to communicate and navigate.

“If they want to share the road, they have to share the responsibility as well,” said Massachusetts state Rep. Steven Howitt, a Republican, who has introduced a bill that would prohibit bicyclists from wearing headphones.

Bicycle advocates say cyclists should use common sense and not use hand-held electronic devices at all when riding. Nor should bikers use headphones if they are distracting. But advocates also say there’s no evidence that such use has resulted in deaths or serious injuries, and question whether creating laws or slapping fines on cyclers makes sense.

“There’s a huge difference between distracted driving that kills someone and distracted biking that doesn’t,” said Peter Wilborn, founder of Bike Law, a network of personal injury lawyers that focuses on cycling issues. “I don’t think we need laws specifically for this.”

Most state laws don’t directly deal with cyclists using cellphones or texting. But at least seven states — California, Delaware, Florida, Maryland, New York, Rhode Island and Virginia — specifically include bicyclists in their laws restricting or banning the use of headsets or earplugs. An eighth state, Pennsylvania, prohibits people driving vehicles from using headsets, a prohibition that likely applies to bicycles, which are defined as vehicles in that state, AAA says.

Delaware bars cyclists from wearing earplugs or headsets covering both ears. Maryland does the same, except when cyclists are riding on bike paths. In Rhode Island, bikers or drivers who wear earphones, headsets or other listening devices are subject to an $85 fine for a first offense, $95 for a second and $140 for a third or subsequent offense. The state does allow the use of cellphone headsets that provide sound through just one ear.

And in Massachusetts, Howitt’s bill is pending in the Joint Transportation Committee. Drivers can’t wear headphones in the state, and it should be the same for bicyclists, he said.

“In this age of electronics and constantly being entertained, I see bicyclists with headphones on, particularly in the city (Boston),” Howitt said. “A biker could be cutting across an intersection, and an ambulance is coming through and he’s not hearing it if he’s playing music very loud.”

Ken McLeod, with the League of American Bicyclists, said his cycling advocacy group supports allowing bikers to choose whether to wear headphones. He said he is unaware of any research on the impact of using headphones on cyclist safety so his group is unlikely to support laws that ban their use.

When it comes to cellphones and texting, McLeod said his group promotes hands-free biking, and if cyclists are getting distracted, “it’s an appropriate area to be regulated.”

“You’re most in control of your bicycle if you have both hands on the handlebars,” he said. “Anything that detracts from that is probably going to make you less safe.”

But McLeod warned there could be problems with how cities or states enact and enforce distracted biking laws. Many cyclists, for example, mount cellphones on their handlebars and use them as training devices, with apps that track everything from speed to revolutions per minute, and they shouldn’t be penalized, he said.

And cyclists using cellphones or wearing headsets are more likely than drivers to be arbitrarily targeted by police because they are more visible, McLeod added.

“If they’re going to be doing more enforcement of distracted biking than distracted driving, that’s not the answer,” he said. “They need to invest more in cracking down on dangerous behavior by drivers because that’s what causes death and injuries.”

New York state Assemblyman Jeffrey Dinowitz, a Bronx Democrat, said he has tried for years to get a bill passed that would prohibit cyclists in the state from using hand-held cellphones or texting. Drivers in New York already are banned from using them.

“I’ve seen people bicycling and talking on their cellphones at the same time. I’ve seen people texting. That’s crazy,” he said.

“It’s likely that if you’re holding the phone with one hand, you’re certainly distracted,” he added. “This bill would hold bicyclists to the same standard as motorists, when it comes to cellphones. It’s something our state should do, and other states should do the same thing.”

But most legislatures haven’t addressed distracted biking. And in the small number of states where bills have been introduced in recent years, they haven’t met with much success.

In California, the Legislature passed a bill in 2011 that would have extended the state’s hands-free, no-texting law to bicyclists. But the measure included provisions unrelated to bikers and was vetoed by Democratic Gov. Jerry Brown.

Distracted biking legislation also has failed in Oregon, New York and Virginia, according to Douglas Shinkle, a transportation policy expert for the National Conference of State Legislatures.

Shinkle said he has heard from legislators concerned about distracted biking, but the issue hasn’t gotten much attention because it is still relatively new. Traffic safety researchers aren’t entirely sure how much it occurs and to what degree it increases risk, he said.

“There’s the need for more research on this because it’s not a well-understood issue,” he said. “I wouldn’t be surprised if there are more bills introduced in the next couple of years, given that a number of cities have instituted such laws.”

Chicago, Philadelphia and Bozeman, Mont., are among the cities that have passed laws prohibiting cyclists from using handhelds.

In Chicago, the City Council passed an ordinance in 2011 barring cyclists from using their cellphones to text or talk without a hands-free device, technology that allows people to use mobile phones without holding them, usually through voice commands. Violators are subject to a $20 fine for the first offense and up to $100 for the third and further offenses. If the offense occurs during a traffic accident, violators could pay up to $500 more.

Last year, the Flagstaff (Arizona) City Council passed a law banning texting while biking or driving. Violators face a fine of $100 or $250 if a crash is involved.

In Austin, Texas, a law prohibiting both drivers and cyclists from using handhelds went into effect in January. Violators can be fined up to $500.

“We consider a bicycle a vehicle on the roadways,” said Samantha Alexander, of the Austin Transportation Department. “We want them to follow the same vehicle laws, such as stopping at the stop signs. The crux behind it was safety.”

Since February, police have cited bikers only three times for violating the hands-free ordinance, according to John Walker, of the Austin Municipal Court.

In New York City — where more than 300,000 trips a day are made by bike — the City Council Transportation Committee is considering a bill that would allow police to ticket cyclists who talk or text on a hand-held phone. First-time violators could avoid a $50 fine by taking a biking safety course, unless they injured someone or damaged property. Those cited more than once in 18 months would face an additional $50 to $200 penalty.

Democratic Councilman Mark Treyger, who sponsored the legislation, said he became concerned about the issue after witnessing a cyclist who, while texting on his phone, veered into oncoming traffic and nearly caused a multicar crash.

“Biking and texting is a dangerous practice,” Treyger said. “Not only can they hurt themselves, but they can hurt others around them.”

Although Treyger calls his bill the most “progressive” in the nation because of its safety course option, the measure has riled some of the city’s cycling advocates. They argue that police should spend their time focusing on dangerous drivers, not targeting cyclists on cellphones.

“In New York City, motor vehicles pose far greater danger to street users than bicycles do,” Paul Steely White, director of Transportation Alternatives, a pedestrian, biking and public transportation advocacy group, testified at an April hearing.

Treyger said he agrees dangerous drivers are a significant problem and motorists should bear the most responsibility.

“But the fact is there are more and more people biking in our city and we need to make sure we are promoting and encouraging safe and responsible biking,” he said. “If we’re serious, everyone — motorists, bikers and pedestrians — has to do their part.”

Photo: A man rides his bicycle through the French Quarter one day before the ten year anniversary of Hurricane Katrina in New Orleans, Louisiana, August 28, 2015. REUTERS/Jonathan Bachman

‘Checkbook’ Websites Shine Light On State Spending

By Jenni Bergal, Stateline.org (TNS)

WASHINGTON — Ohio Treasurer Josh Mandel was mortified when a consumer watchdog group last year gave his state a D-minus for transparency in providing online access to information on government spending.

So he decided to do something about it.

In December, Mandel’s office launched a user-friendly, cutting-edge financial transparency website that this year earned Ohio the only A-plus in a national review of state websites that tell the public how state government spends taxpayer money.

Every state now runs some kind of public accountability — or “checkbook” — site. The goal is to increase transparency and accountability. But while many states have been ramping up their efforts to make their sites accessible and comprehensive, some still have a long way to go. Eighteen states were graded between C and F in an annual evaluation of the sites this year by the U.S. Public Interest Research Group (U.S. PIRG).

State checkbook websites vary considerably. Some are easy to use and provide lots of information with one click, making it easy for users to unearth individual payments to a person or company. Others are difficult to navigate or don’t contain as much information.

“There is a lot of variation. If you were to compare Ohio with Alaska or Idaho, you’d see huge differences in how user-friendly it is,” said Phineas Baxandall, a senior analyst at U.S. PIRG, which published this year’s ratings in March.

Every year, states spend hundreds of billions of dollars contracting with private vendors and nonprofits, handing out subsidies, such as tax credits, to companies to spur development and making other expenditures. States created the checkbook websites to open up information about that spending to the public. The sites tell taxpayers who is getting the money, and what for.

“It’s extremely important because you have a new set of eyes on this information, not just those of someone in government,” said LaVita Tuff, a policy analyst at the Sunlight Foundation, a nonprofit that promotes open government.

State financial officials say that checkbook websites can help save money by identifying inefficiencies and reducing the amount of time spent by staff filling information requests. Posting contract information on the websites can result in more competitive bidding and lower bids. For example, interested vendors might see that they could win a contract by offering a lower price, and state agencies might see that they could consolidate contracts to get a better deal.

Massachusetts saved $3 million by eliminating paper, postage and printing expenses related to information requests by state agencies and paperwork from vendors, according to U.S. PIRG. Texas was able to renegotiate its copier machine lease and save $33 million over three years. And in South Dakota, a reporter used the website to launch an investigation into subsidies that led to the state saving about $19 million by eliminating redundancies.

“I think these websites are very important,” said Kinney Poynter, executive director of the National Association of State Auditors, Comptrollers and Treasurers. “More transparency provides better information for all of those involved, whether they be citizens, contractors or legislative bodies.”

The U.S. PIRG report, in its sixth year, evaluates and grades states on their online transparency initiatives and how well they provide access to spending data. It examines whether checkbook sites offer comprehensive, one-stop, one-click access to users and make large sets of data easy to download.

A growing number of states are doing a better job, the report found. Fourteen got an A this year, up from eight last year. Louisiana and Illinois were among those that got bumped up.

Other states that made strides included Colorado, which got a B-plus after it re-launched its portal, now easier to use, and Kansas, which vaulted from a D-minus to a B by overhauling its site to make information more accessible and easier to download.

Connecticut, which got an A for the first time this year, recently launched OpenCheckbook, an easy to use, comprehensive site that allows users to search real-time information about payments to vendors, nonprofits and others.

“You not only have direct access to micro and macro information about the operation of state government, but you can search it, compare it, trend it and download big data sets,” said State Comptroller Kevin Lembo, a Democrat. “I’d like to think that we’re pushing the envelope in this area.”

Lembo said that because government officials “like to keep information close,” checkbook websites are especially important for transparency.

“We don’t like other people telling us we’re doing things wrong,” he said. “The result of pulling information in and holding it tight is that public confidence continues to erode.”

Lembo said he was so pleased with OpenCheckbook, which was paid for with existing funds in his budget, that last month he launched OpenBudget, a new feature that will let users compare what was budgeted to what was actually spent.

But not all states have improved their websites enough, according to the U.S. PIRG report.

Fifteen got a C or a D. And California, Alaska and Idaho were graded an F in 2014 and again in 2015. Two of the three don’t have a central one-stop database for searching or viewing details on spending, the report found. Not one of the three provides information on economic development subsidies.

“These three are not user-friendly,” said U.S. PIRG’s Baxandall, who co-authored the report. “It’s like finding a needle in a haystack.”

Photo: Catch up on your state government. RikkisRefuge Other via Flickr

States Use Cameras To Crack Down On School Bus Scofflaws

By Jenni Bergal, Stateline.org (TNS)

MaKayla Marie Strahle was only 11 when she stepped off a school bus, started to cross the road and was struck and killed by a pickup truck in west central Wyoming just days before Christmas 2011. The driver, who had ignored the stopped school bus’ flashing lights, was later convicted of three misdemeanor charges, including homicide by vehicle.

MaKayla’s death sparked calls for change, and spurred the legislature to take action. Last year, Wyoming became the first state in the nation to mandate that every public school bus have cameras attached to catch drivers who illegally pass.

“It’s quite a different approach,” said Douglas Shinkle, a transportation policy expert for the National Conference of State Legislatures (NCSL). “Wyoming has taken a pretty big step requiring this statewide, and appropriating the money to do so.”

While Wyoming is out front, a number of states have enacted measures that would allow the use of cameras to target the dangerous action of “fly-bys” or “pass-bys” by scofflaw drivers who illegally pass stopped school buses.

At least 12 other states — Arkansas, Connecticut, Georgia, Illinois, Maryland, Mississippi, North Carolina, Rhode Island, South Carolina, Virginia, Washington, and West Virginia — have laws that authorize the use of cameras on the outside of buses to catch fly-by drivers, according to the NCSL. And at least seven states, including New Jersey, New York, and Tennessee, are considering bills this year that deal with school bus monitoring cameras. They range from providing grants to school districts to buy and install the equipment to authorizing that the cameras be allowed statewide.

Two other states, Virginia and Indiana, took up school bus camera bills this session though neither passed.

Republican state Representative Edmond Soliday, who authored the Indiana bill, said it received overwhelming support in committee and from the public, but he withdrew it after some of his colleagues expressed strong opposition, citing privacy concerns.

“When it comes to legislation like this, you have to have patience,” said Soliday, who chairs the House Roads and Transportation committee.

Soliday said this was the third attempt (and his second) to pass a bill in Indiana authorizing outside school bus cameras. But in some states, he said, it has taken several years to get this type of law enacted. “We’ll try it again, if we have the votes,” he said. “Perseverance is the only path to victory.”
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ILLEGAL PASSING

Nearly half a million school buses are on the road every day in the U.S.

State laws typically require motorists from either direction to stay stopped if a school bus’ flashing red lights are deployed and its stop signal arm is extended, unless it’s at a divided highway or there’s a barrier. In that case, cars may be allowed to travel in the opposite direction of the bus.

But some drivers who are impatient about waiting for students to board or exit choose to ignore the warning signals and zoom around the bus. In many states, they face hefty fines for doing that — if they’re caught.

A 2014 survey by the National Association of State Directors of Pupil Transportation Services (NASDPTS) of more than 97,000 school bus drivers in 29 states found that an estimated 76,000 vehicles illegally passed buses on any given day.

“When children are getting on and off buses in the loading zone, that’s when they’re the most vulnerable,” said Charlie Hood, the association’s executive director.

Between 2001 and 2013, nearly a dozen children between the ages of six and seventeen died in school bus-related crashes involving another driver charged with illegally passing the bus, according to the National Highway Traffic Safety Administration.

Hood said states have adopted a variety of measures to tackle the problem of fly-bys, such as improving motorist education, hiking penalties, and beefing up law enforcement, including mounting cameras on both sides of buses.

“It’s a very complex problem. Cameras can definitely help,” Hood said. “We think they have a deterrent effect. They certainly have an educational effect. It’s one tool in the safety arsenal.”

School transportation officials say that bus cameras shouldn’t be compared to red light and speed cameras, which a number of cities and states have jettisoned recently after drivers complained of stiff fines, and controversy erupted over the reliability of the equipment, enforcement, and the amount of money paid to vendors.

Many state legislators have a different attitude when it comes to using cameras for pedestrian student safety.

“These bills authorizing school bus cameras are much more targeted and they continue to pass year after year,” said NCSL’s Shinkle. “Overall, the cultural tolerance for illegally passing a school bus is about as low as it gets. I think that you can find a lot of bipartisan agreement on protecting children.”
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WYOMING’S LAW

In Wyoming, which does not use red light or speed cameras, members of both parties supported the school bus cameras, said Republican state Senator Hank Coe, who chairs the Senate Education Committee.

Coe said the state’s joint House and Senate education committee sponsored the school bus camera legislation in large part because of MaKayla Strahle’s death.

“I think it had an effect on the legislators,” Coe said. “There are lots of complaints about cars just blowing by school buses every year. Even in a small, rural state like Wyoming, it’s a big issue.”

Many legislators did oppose the bill, calling it another form of government intrusion or saying that drivers’ privacy would be violated by the video recordings — arguments that have been used in other states to defeat legislation allowing outside cameras on school buses.

“I had major concerns about this bill,” said former Republican state Representative Matt Greene, who voted against the legislation. “We were not only allowing, but we were requiring spying on Wyomingites by passing this. Big Brother is watching.”

But the measure ultimately passed, and the legislature agreed to provide up to five million dollar to reimburse school districts 100 percent of the cost of installing cameras on the state’s fleet of 1,511 buses.

“When you put the cameras on there, if a car does drive by, it’s recorded and the license plate is recorded and charges can be pursued by law enforcement. It’s a pretty important deal,” Coe said. “This makes the public more aware that if they blow by a school bus, they’ve got a good chance of getting caught.”

While the mandate requiring outside cameras technically doesn’t become effective until the 2016-17 school year, some districts have already used the state funds to install equipment on their buses, said David Koskelowski, the Wyoming Department of Education’s program manager for traffic safety and pupil transportation.

Koskelowski said the cameras photograph the vehicle model, color, and front or back license plate. The bus driver then calls in the incident on the radio or marks it on the video, which contains the date, time, and GPS location. A supervisor then makes a copy of the video and contacts police, who can review it and decide whether to pursue the case and issue a citation.

But it’s left to police agencies and prosecutors in each county to decide whether video evidence is acceptable as the sole standard to determine whether a driver illegally passed a school bus.

Koskelowski said that in some school districts, police don’t come and get the video, so nothing happens. That’s because they believe that unless the driver is positively identified, a citation can’t be issued.

“We’re working to build those relationships with law enforcement to pursue these cases,” Koskelowski said. “We can’t get 100 percent positive facial recognition on every video. It’s unrealistic to expect that.”

Photo: Jay Cross via Flickr

Cities Turn To Social Media To Police Restaurants

By Jenni Bergal, Stateline.org (TNS)

WASHINGTON — Many diners regularly click onto the Yelp website to read reviews posted by other patrons before visiting a restaurant. Now prospective customers also can use Yelp to check health inspection scores for eateries in San Francisco, Louisville, and several other communities.

Local governments increasingly are turning to social media to alert the public to health violations and to nudge establishments into cleaning up their acts. A few cities are even mining users’ comments to track foodborne illnesses or predict which establishments are likely to have sanitation problems.

“For consumers, posting inspection information on Yelp is a good thing because they’re able to make better, informed decisions about where to eat,” said Michael Luca, an assistant professor at Harvard Business School who specializes in the economics of online businesses. “It also holds restaurants more accountable about cleanliness.”

The Centers for Disease Control and Prevention estimates that more than 48 million people a year get sick from foodborne illnesses, 128,000 are hospitalized and 3,000 die. About 60 percent of outbreaks come from restaurants, according to the CDC.

Restaurant inspections, which are usually conducted by city or county health departments, vary across the country in frequency and in how scores are computed and citations are handled. Most, however, include surprise inspections and cite restaurants for high-risk violations, such as a refrigerator’s temperature not being set at the proper level or staffers using the same cutting board to make salad and handle raw chicken.

In recent years, dozens of city and county health departments have been posting restaurant inspection results on government websites to share with the public. Turning to Yelp or other social media, or using crowd-sourced information to increase public awareness, is the next logical step, some officials say.

“Yelp is a window into the restaurant. The restaurateurs don’t want a bad (health) score on Yelp. They’ll be more attentive about getting the restaurants cleaned up and safer,” said Rajiv Bhatia, former environmental health director for the San Francisco Department of Public Health.

“It’s also valuable because it allows the public to see the workings of a government agency and puts some pressure on the agency to do its job,” said Bhatia, a physician who is now a public health consultant.

In 2005, San Francisco was one of the first cities to put its restaurant inspection information online. Eight years later, it was in the forefront once again, becoming the first city to sign onto the Yelp initiative to list health scores alongside diner reviews.

The city’s health department, which is responsible for inspecting 3,300 restaurants and another 2,200 establishments that prepare food, says the program is working well.

“It gives more information to the public about making decisions as far as where to go to eat,” said Richard Lee, the department’s acting director of environmental health. “Someone might not go to a restaurant based on the score they see on Yelp.”

Lee said that initially, only inspection scores and violations were posted on Yelp. But after getting complaints from local restaurants, he said the site also added the date the violation was corrected.

The National Restaurant Association, the industry’s trade group, said that while it supports transparency and consumers’ access to information, it worries that because inspection standards differ from city to city, Yelp users may not be familiar with rating terminology and therefore, could draw incorrect conclusions.

David Matthews, the association’s general counsel, also said the timing of postings is critical because restaurants often correct findings and generate different ratings after a re-inspection.

“I could be inspected today and fail, and fix the problem tonight and have an inspector back out. But if Yelp only receives a weekly or monthly update, then I’ll be on the Yelp system for up to a month with a violation or a failure. That’s not an accurate reflection of the status of my restaurant,” Matthews said. “A fair system is crucial to restaurants, the majority of which are small businesses.”

Yelp collaborated with officials in San Francisco and New York to develop the open data tools that allow health departments to publish inspection information on the site or any other one that offers restaurant listings. They decided on a common format to report the data. Each city or county is responsible for making electronic information available in that format. Yelp’s software collects the data from health departments and puts it on its website.

So far, seven city or county health departments have joined the program, among them Los Angeles County, which includes the city of Los Angeles, and Wake County, N.C., which includes Raleigh. More are coming on board this year, according to Luther Lowe, Yelp’s director of public policy.

“The idea is to create a public-private partnership that’s a win-win-win,” Lowe said. “It empowers consumers with helpful information that’s germane to their dining decisions. It helps the cities by making their data more useful to their citizens. And it’s great for Yelp, because it makes the site even more useful.”

Lowe said Yelp has more than 135 million unique monthly visitors, and restaurant reviews are among the most common destinations.

Putting health scores and inspection results in an accessible place where consumers already are searching for restaurant information, he added, makes a lot more sense than “relying on those clunky (health department) dot.gov websites.”

New York City has used Yelp reviews in a different way. Its Department of Health and Mental Hygiene launched a nine-month pilot study in July 2012 that used data-mining software to screen and analyze about 294,000 Yelp reviews. It searched for keywords such as “sick” or “food poisoning,” to find cases of foodborne illness that may not have been officially reported. The findings, which were published in a 2014 CDC report, uncovered three unreported outbreaks linked to 16 illnesses and identified multiple food-handling violations at the restaurants.

The authors cautioned that while it may be beneficial to incorporate review information into the surveillance process to find foodborne illnesses, the process also requires “substantial resources,” including programming expertise and staffers available to read reviews, send emails, and conduct interviews.

In a prepared statement to Stateline, the health department said that through the partnership with Yelp, it had identified four additional outbreaks since the study ended. “We are currently working to expand the project to add additional sources of social media data,” the department said.

Chicago has taken a different route. There, the Department of Public Health and a group of civic organizations launched a project in 2013 that identified and responded to restaurant complaints on Twitter. Over ten months, staffers used an algorithm to track Twitter messages about foodborne illness. They identified people whose tweets mentioned words such as “food poisoning” or “stomach cramps.” They contacted them and sent them links to an online complaint form. A total of 133 restaurants were inspected, according to a health department report published by the CDC. Of those, nearly 16 percent failed inspection, and about 25 percent passed but had conditions that indicated critical or serious violations.

Chicago health officials also recently completed a “predictive analytics” pilot project that used software to aggregate real-time data such as previous citations, social media comments, building code violations and nearby construction. The goal was to try and predict which restaurants would be most likely to fail an inspection or draw violations and which should be targeted for visits.

The health department would not make anyone available to Stateline to discuss the pilot program.

Bhatia, the former San Francisco environmental health official, said putting inspection data on Yelp or similar sites would result in safer conditions for diners because it would force restaurants to pay more attention to workplace practices that result in hazards. It also would alert inspectors to problems they may not know about, he said.

Bhatia said that predictive analytics also can be valuable, if it includes not only a history of inspections and social media comments, but environmental conditions, such as the building’s quality and occupational hazards for workers. Cities could use that data to move from routine inspections to targeted ones, he said.

For Luca, the Harvard Business School economist, using algorithms is the way to transform restaurant inspections.

He points to a 2013 study he co-authored that mined seven years of Yelp reviews in Seattle. It concluded that online postings can be used to predict the likely outcome of a restaurant’s health inspection.

Luca said that given the results of his study and others, restaurant inspectors need to change the way they do business. Instead of conducting random inspections two or three times a year, he said health departments should search online reviews using an algorithm that would tell them which places to inspect on which days. That information would come from Twitter, Yelp and other social media over time.

Luca said he envisions health departments performing random annual inspections and doing additional ones only when the algorithms signal something bad is going on. “There would be a large-scale reallocation of inspectors targeted at the places most likely to have violations,” he said.

The major challenge, Luca said, is for officials to come up with the details of how such a new inspection process would work.

“The science is there; the data is there; the human capital is there,” Luca said. “The process itself would be no more complicated than the current one. The biggest barrier is logistical.”

Luca and three of his collaborators at Harvard are so big on the idea they’re running a competition in Boston this month funded by Yelp. They’re asking people to devise their own algorithm to pinpoint violators. The winner will receive $3,000 and the two runners-up each will get $1,000.

“Cities haven’t acted because of inertia. They’re used to doing it the old way,” Luca said. “This is a great opportunity for local governments that are looking to innovate and cut through bureaucracy.”

Photo: Michael Dorausch via Flickr

Policing Private Contractors Is Challenge For States

By Jenni Bergal, Stateline.org

WASHINGTON — Hurricane Sandy victims were improperly denied grant money to rebuild. Criminals escaped from halfway houses and committed murder and assault. Case managers for people with developmental disabilities failed to file accurate reports about their visits with clients.

Those were some of the findings of a recent Rutgers University study, which concluded that for years, New Jersey officials did a poor job overseeing state contracts with outside firms.

The review, which examined how New Jersey procured and monitored contracts, determined that oversight failures not only wasted taxpayers’ money but put some of its most vulnerable residents at risk.

“The state engages in oversight by audit and expose. It’s a ‘gotcha’ way to do it,” said Janice Fine, an associate professor at Rutgers’ School of Management and Labor Relations who co-authored the study. “I was shocked by how little oversight was happening in real time, as opposed to after the fact.”

Many states have struggled to adequately oversee billions of dollars in contracts with companies — both for-profit and not-for-profit. Too often, states rush to tighten contracting laws or regulations only after a public controversy erupts or they’ve been slammed by auditors. By that time, millions of dollars may have been wasted.

“Lots of states are facing this oversight problem,” said Barbara S. Romzek, dean of American University’s School of Public Affairs. “State agencies might write good contracts but they don’t execute them. And contract oversight is important because it’s getting what you pay for. Public money should not be spent poorly. The services should be high quality and taxpayers should be getting their money’s worth.”

States use outside contractors for everything from custodial services to prison health care to massive information technology systems. While officials don’t keep track of how much contracts cost state governments nationwide, it’s estimated to be at least in the hundreds of billions of dollars annually.

State auditors often find that contractors initially bid low to win the business, but later submit “change orders” resulting in higher costs, saying the scope of the project changed. This can add dramatically to the overall price tag, resulting in significant overruns. Auditors sometimes report that change orders were unnecessary or that the work either wasn’t performed or was done poorly. All of it ties into the quality of project management and oversight.

In Oregon, Democratic Governor John Kitzhaber signed a bill earlier this year that strengthens oversight of information technology contracts after the state’s disastrous attempt to create an online health insurance exchange, which failed. The state paid a private contractor more than $130 million to help develop the website.

In Idaho, lawmakers passed new legislation aimed at improving contract monitoring after their own Office of Performance Evaluation issued a critical report last year. It found that the state’s contract oversight training was inconsistent, and there was no formal framework for monitoring contracts. Each agency followed its own internal policies, with no across-the-board statewide rules.

The legislature also acted because of a public outcry over a multimillion dollar state contract with a company to provide a broadband network connecting high schools that wound up costing taxpayers millions more than anticipated.

“All of this was a wake-up call,” said Idaho Republican state Rep. Maxine Bell, chairman of the House Appropriations Committee. “We found out that we had 831 active contracts in a little state like ours — $3.2 billion worth. We weren’t aware of that type of business going on in the state or the magnitude of it. The state should have been better planning and more training for the people in charge of the monitoring.”

Many experts, such as American University’s Romzek, say the key to good state contracting is having highly competent staffers who have the authority and funding to perform their jobs well.

“If you have people who don’t know how to manage a contract, they could get taken advantage of,” Romzek said. “It’s like trying to renovate your kitchen. If you don’t know anything about plumbing and you have someone come in and say you need to pull out all the plumbing, and you can’t ask educated questions, you may get ripped off.”

Aside from inexperienced staff, other obstacles to quality contracting are poorly designed contracts and unwillingness to pull the plug on a contractor with poor performance, Romzek added.

In New Jersey, Rutgers researchers found that state officials responsible for overseeing contracts often were poorly trained and attrition had drained the ranks of many experienced contract managers.

“We literally went into these offices in charge of billions of dollars in contracts and we’d find one person in a cubicle because there had been so much attrition over time,” said Rutgers’ Fine. “That’s a real problem for the state.”

Another problem, Fine said, was that there was no effort to build the cost of oversight into the process, so agencies didn’t have the resources to do an adequate job. Nor was there any centralized data about contracts because no single agency kept that information. Each had its own method of overseeing contractors.

The study blasted the state for failing to properly monitor the administration of a $710 million Hurricane Sandy recovery and reconstruction program, saying it ended up delaying assistance to some victims for months or improperly denying them grant money. It noted that New Jersey officials terminated a $67.5 million contract with a company that administered recovery funds before it had even expired.

The researchers also criticized the state’s residential community release program for criminals, saying that poor oversight of contractors contributed to deaths and injuries, including that of a Newark woman killed by a man who escaped from a halfway house and a man in a liquor store whose ear was slashed by a woman who escaped from a Trenton facility.

And the report took the state’s developmental disabilities agency to task for failing to adequately manage its contracts, saying it wasn’t able to ensure that services to clients were being delivered as required.

While the Rutgers study was partially funded by the New Jersey AFL-CIO, which has battled with Republican Governor Chris Christie, Fine said that it didn’t skew the research, which was approved by the university’s internal review board. She noted that the contract oversight problems uncovered were longstanding and occurred during both Democratic and Republican administrations.

Christie’s office did not respond to requests for comment.

Last month, New Jersey Democratic state Senator Bob Gordon introduced a bill that addresses many of the concerns in the Rutgers report. The measure would mandate real-time evaluation of contractors, require that contractors pay a sliding scale fee for monitoring costs, set up a centralized contract database and create a cadre of specialized managers who would receive intensive continuing education training.

“It just makes no sense to be doing this outsourcing unless we have some mechanism in place to make sure that taxpayers dollars are being spent effectively and that the goals of the contract are being achieved,” said Gordon, who chairs the House Oversight Committee. “There should be a monitoring or evaluation process built into every program so that you can see if it’s working and make a mid-course correction, if possible. In the business world, it’s called quality assurance.”

In many states, auditors and comptrollers are often the ones who end up uncovering problems with how agencies oversee contracts.

In California, for example, the state auditor found in 2012 that the public health department had mismanaged a contract for a childhood injury prevention program and improperly spent millions of dollars to pay administrative costs.

In Texas, the auditor’s office in 2013 concluded that that the state education agency didn’t have an adequate process for monitoring a $462 million contract with a student testing company.

That same year, the Vermont auditor’s office said that lax monitoring of a prison health care contract may have contributed to more than $4.2 million in extra spending.

Kinney Poynter, executive director of the National Association of State Auditors, Comptrollers and Treasurers, said his members routinely uncover oversight problems in state agencies, especially when they deal with big ticket IT and transportation projects.

“We often see overruns through change orders and lowballing. That’s what the auditors find,” Poynter said. “These issues have been around a long, long time and unfortunately they just don’t go away.”

Poynter said the responsibility lies with the state contract managers, who should be doing monitoring from the start. Instead, states rely on auditors, who launch their inquiries after the money already has been spent.

“It’s the old pay and chase model,” he said. “You pay the vendors and then you have to chase them. But afterwards, it’s too late. The best internal controls are those in place up front and continuously enforced.”

Elliott Sclar, an economist and professor of urban planning at Columbia University, agrees that states tend to regulate contracts “ex post facto — after the fact.”

“Often, it’s the auditors who come in and find some abuse,” Sclar said. “And at that point everyone is scrambling around, but you didn’t get what you paid for, and it’s too late.”

Another problem is that contractors who perform poorly often aren’t sanctioned, said Amanda Girth, an assistant professor at Ohio State University’s John Glenn School of Public Affairs.

Girth said that the process often can be onerous because states know that they could wind up in court, either suing a contractor or being sued by one if they cancel the contract.

“Those barriers are just too high. Even though there are penalty clauses, they don’t execute them because it’s just too much trouble,” she said. “It’s a very real and serious problem.”

Other experts argue that states need to change their approach to oversight altogether.

Phillip J. Cooper, a professor of public administration at Portland State University, said that while he agrees that contract managers should be better trained, he believes that legislatures bear some of the responsibility because they continue to pile on new contracting requirements that place too much burden on contract managers.

The key to improving oversight, Cooper argues, is for states to stop having a “cops and robbers mentality” about contract management.

“We’ve got to get away from this idea that they need to spend all this time making sure contractors don’t steal all the money,” he said. “Instead, it should be about managing ongoing relationships with contractors and making it work.”

Photo: Pete Marovich/MCT

Federal Backstop For Terrorism Insurance Set To Expire

By Jenni Bergal, Stateline.org

WASHINGTON — When a large hotel near the World Trade Center was destroyed in the 9/11 attacks and a second one severely damaged, the company that owned them — like many other businesses — was relieved they were covered by insurance.

But after 9/11, the insurance industry, which ended up sustaining an estimated $32.5 billion in total losses, grew skittish and began excluding terrorism from commercial policies nationwide. That resulted in businesses having less terrorism coverage or none at all.
States and cities worried lenders wouldn’t approve loans to businesses that didn’t have terrorism coverage, potentially stunting economic development and harming real estate markets.

In 2002 Congress stepped in and passed the Terrorism Risk Insurance Act (TRIA), a public-private partnership that provides a federal backstop against losses from a terrorist attack. But the law is scheduled to expire at the end of this year, and the two competing bills that would renew it lay out different visions of how much federal help private insurers should get. Some groups argue it shouldn’t be renewed at all.

When insurance companies cut back on terrorism coverage in the wake of 9/11, Host Hotels & Resorts, which owned the two New York City hotels, went from having a billion dollars of terrorism coverage for its 118 properties to $300 million. For CEO Edward Walter, whose company now owns 140 hotels, reauthorization of TRIA is a must.

“Anybody that’s operating in business, big or small, is at risk. The smaller ones are probably more at risk,” he said. “If I lose one hotel, I’d still have 139 left. But a florist operating in that hotel might not have another location. It might matter more to them than to me.”

Reauthorizing the terrorism program isn’t just significant to the business sector. The National Association of Insurance Commissioners has urged that it be renewed, as has the National Governors Association.

Officials in Nevada, for example, say the program is especially important to their state, where the economy relies heavily on the hotel and casino industry, which makes it a potential terrorism target. Nearly 40 million people visited Las Vegas last year, and the tourism trade supports more than 380,000 jobs.

“The threat of terrorism is very real in Nevada,” Republican Gov. Brian Sandoval said in an email to Stateline. “The reauthorization of the Terrorism Risk Insurance Act will provide a level of certainty in the face of terrorist threats and allow Nevada businesses to continue focusing on growing our economy.”

In Illinois, the Department of Insurance said in a statement that if adequate terrorism insurance isn’t available, it could impact “a multitude of high-value commercial properties” such as Chicago’s mega-high rise Willis Tower and Trump International Hotel & Tower, as well as “many thousands of hotels and restaurants, numerous large upscale shopping malls, and other retail stores.”

The National League of Cities also supports reauthorization, warning that if Congress doesn’t extend the program, many cities could experience “increased premiums and increased assumption of risk that they cannot afford.”

“For larger cities, it’s more of a concern, but terrorist activity can occur almost anywhere,” said Yucel Ors, the league’s program director for public safety and crime prevention. “Without TRIA, we understand that insurers would no longer be providing terrorism risk insurance, so the rates would be very high for local government. Eventually, that filters down to taxpayers.”

Under TRIA, insurers that choose to sell property insurance to commercial policyholders are required to offer terrorism coverage, but policyholders aren’t obligated to buy it. A report by Marsh, a large insurance broker, found that 62 percent of businesses purchased terrorism insurance in 2013 — up from about 27 percent in 2003.

The program is meant to protect insurers in the event of a catastrophic attack. If a terrorist act causes less than $100 million in insurance industry losses overall, there would be no federal assistance. But if the losses are between $100 million and $100 billion, insurers would pay a deductible and then the federal government would step in and pick up an 85 percent share of the remaining losses. When insurers’ losses are under $27.5 billion, the government would recoup taxpayers’ money through surcharges on all property and casualty policies.

Losses of more than $100 billion wouldn’t be covered by insurers or the federal government, so affected policyholders would be on the hook.

So far, there have no TRIA payouts because there have been no large-scale terrorist attacks since the law went into effect.

A Senate reauthorization bill, sponsored by a bipartisan group and passed unanimously by the Banking Committee last month, would extend TRIA for seven years and make minor modifications.

The House version, passed by Republicans in the Financial Services Committee without Democratic support, would extend the program for five years, and significantly, would hike the threshold that triggers the government assistance from $100 million to $500 million — a change the business community opposes.

Committee chairman Rep. Jeb Hensarling, a Texas Republican, believes that the TRIA program needs reform and that the insurance industry should cover far greater portions of the risk.

“By the industry’s own admission, taxpayers are currently forced to bear incalculable amounts of risk with only a fleeting promise that they might someday get a portion of their investment back,” Hensarling said in support of the House bill at a June committee meeting.
But TRIA defenders argue that the current program is budget neutral and taxpayers would be on the hook only in the event of a large-scale attack. And they say that insurers would be unwilling to cover terrorism without TRIA.

One of the major groups stumping for TRIA’s reauthorization is the Coalition to Insure Against Terrorism, a business coalition representing industries ranging from transportation to real estate to entertainment. Among its members: the National Football League, the American Gaming Association, and the Association of Art Museum Directors.

“There’s such widespread interest because no one can reasonably predict where and when the next terrorist attack will be,” said Martin DePoy, a lobbyist who is the coalition’s coordinator. “We’ve seen that since 9/11 there have been dozens of attacks thwarted. Some have been in major metropolitan areas; others haven’t. Everyone now needs terrorism risk coverage. The next attack could be in Paducah, Kentucky.”

TRIA doesn’t just focus on property insurance; it also covers workers compensation.

Almost every state requires businesses to provide coverage that gives benefits to workers who are injured. Insurers can’t exclude terrorism coverage from those policies.

“If there are on-the-job casualties because of terrorism, insurance companies have no say. They have to pay out,” said Michael Dworsky, an associate economist at the RAND Corporation who has studied TRIA.

Photo via WikiCommons

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