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Haslam Considers Outsourcing More State Buildings

Governor Haslam Responds To Mayor Barry's Affair
Posted at 5:22 PM, Aug 18, 2015

NASHVILLE, Tenn. -- Could tens of millions of your tax dollars soon be going to another big corporation?

The Haslam administration is now considering a controversial new plan to outsource the management of even more state buildings.

Democrats and employee groups are already sounding off, accusing the governor of showing a deep hostility toward public employees.

But Haslam said Tuesday that the critical question is: will more privatization save taxpayers money?

"The easiest thing in government is to keep doing things the way you always have," Haslam told Capitol Hill reporters. "Nobody ever says a word, but that's where money is wasted."

Haslam's administration began the privatization push two years ago, outsourcing the management of state office buildings to Jones Lang Lasalle, handing the Chicago-based corporation a contract worth hundreds of millions of dollars.

Now, the state is asking private companies like JLLfor information on the possible outsourcing of even more state facilities.

Among them: the state's entire prison system, as well as potentially every single college and university building across Tennessee.

NewsChannel 5 Investigates asked Haslam, "What is the specific problem you're trying to solve?"

"That's a really easy one," he answered. "What we are trying to solve is we spend a lot of money on our facilities."

"But are university buildings being poorly managed?" we asked.

"That's what I say, we'll find that out," Haslam said.

NewsChannel 5 Investigates continued, "But if you cannot point to a specific problem, why privatize?"

Haslam responded, "You and others gave us a hard time when we looked at our office buildings before, but we are saving millions of dollars."

In fact, as our investigation first revealed, the Haslam administration told lawmakers - before the first round of outsourcing - that JLL's estimate showed the "expected results" would be savings of $18.8 million a year, $94 million over five years.

It was a number that a company official later admitted was way off.

"That was never the intent of that study was to say here's what you can expect," JLL official John Padgham said back in 2014.

"'Expected' doesn't mean expected?" NewsChannel 5 Investigates asked Padgham, prompting a sigh from the JLL official.

A prime example: the company projected it could find big savings by slashing security on state buildings by more than 90 percent.

"That's not realistic, is it?" we asked Padgham.

"Uh, no, it's not," he admitted. "I don't think that will happen."

Haslam told reporters, "Our job in state government is to provide the very best services we can at the lowest cost to taxpayers."

Still, NewsChannel 5 Investigates wanted to know where big corporations could find the savings that the Haslam administration thinks that it can find this time.

"What I am trying to get at, governor, can you point to any proof that money is being wasted?" we asked.

"I can show you," Haslam answered, "that when we've changed things we saved money. So that's the same thing."

The governor said that that first facilities management contract has saved taxpayers about $5 million a year -- which is far below the nearly $20 million that JLL had originally suggested.

But even at that, it's not clear how the state figures the number cited by the governor.

Haslam said that information is still being compiled.

As for the next step, the administration says right now it is just seeking information, that no final decision has been made.

But it's rare for the state to put out such a request without following through eventually with a state contract.

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