We talked of public justice in building legal oversight that actually looks for fraud, corruption, and moves citizen complaints forward in the courts----we talked about public justice as VOIDING Maryland and Baltimore laws passed that act as barriers to our access to Grand Jury and Baltimore State's Attorney handling of ALL legitimate civil and criminal claims by citizens because they are unconstitutional and violate Equal Protection----we talked how WAR ON GUNS is yet another far-right Reagan Republican neo-liberal war on people's civil rights and liberties being pushed by Clinton and Obama neo-liberals----social Democrats address the social issues of impoverishment, employment, and community stability as the platform in reducing violence and crime. We do not look for ways to increasingly criminalize people. Zero tolerance was another Reagan/Clinton far-right Republican policy pushed by an O'Malley as Clinton and a Rawlings-Blake as Obama neo-liberal.
WE ALL KNOW THESE POLICIES DO NOTHING TO REDUCE DRUG USE-----CRIMINAL ACTIVITY----AND NOW GUN USE.
Yesterday we talked of building small media in each community to allow citizens to hold power accountable as central to PUBLIC JUSTICE. REAL social Democrats have been doing that for decades and Bernie Sanders has as well---I will take Bernie's funding to create media competition locally and make sure each community has TV, radio, and print media businesses.
Bernie Sanders on Why Big Media Shouldn’t Get Bigger
December 7, 2012
In 1983, 50 corporations controlled a majority of American media. Now that number is six. And Big Media may get even bigger, thanks to the FCC’s consideration of ending a rule preventing companies from owning a newspaper and radio and TV stations in the same big city. Such a move — which they’ve tried in 2003 and 2007 as well –would give these massive media companies free rein to devour more of the competition, control the public message, and also limit diversity across the media landscape. Senator Bernie Sanders, one of several Senators who have written FCC Chairman Julius Genachowski asking him to suspend the plan, joins Bill to discuss why Big Media is a threat to democracy and what citizens can do to fight back.
Sanders also expresses his dismay that such a move would come from an Obama appointee. “Why the Obama Administration is doing something that the Bush Administration failed to do is beyond my understanding,” Sanders tells Bill. “And we’re gonna do everything we can to prevent it from happening.”
When Congress thought it could pass laws designating US cities as International Economic Zones and call them global FREE MARKET and TAX-FREE Zones they did so OUTSIDE of US Constitutional law because Congress does not have that ability to control state and city economic or development policy. It regulates global trade-----it can pass national taxes----but it cannot force a state or city to adhere to global trade policies that everyone knows is against public interest and national security and sovereignty and it cannot force a state or city NOT TO TAX-----and then there are the anti-monopoly laws built right into our Constitution and Federal law.
Then we have the level of sovereignty coming from our Maryland State Constitution which states that Maryland is a sovereign state, it does not tolerate monopoly, and it gives each county/city its sovereignty in issues as central to real estate development and economy.
THE ONE ISSUE THAT ACTS AS THE CATCH-ALL FOR EVERY ISSUE OF WHICH I SPOKE THIS WEEK----CITY/NATIONAL SOVEREIGNTY. CITY/NATIONAL SECURITY.
Now, if you have Wall Street global pols controlling both Republican and Democratic Parties then you have pols thinking they can IGNORE THE GORILLA IN THE ROOM OF US CONSTITUTIONAL LAW AND WE THE PEOPLE AS LEGISLATORS------they are of course acting illegally in doing so and a Mayor of Baltimore can move to VOID and ignore these policies of International Economic Zone and Trans Pacific Trade Pact as we head to Federal court to fight this.
One way a Mayor of Baltimore ignores these threats to our city and national security is to REMOVE all global corporations from government and to stop the development around global corporate campuses. I do this because it is only global corporations able to use International Economic Zone and Trans Pacific Trade Pact policies to the great detriment of the American and Baltimore citizens. Small business economies are not tied to these international policies which while illegal will take time to reverse. Until we do-----US cities simply need to KEEP GLOBAL CORPORATIONS AND MARKETS AT BAY.
Now, Clinton/Obama/Bush/Hopkins Wall Street global corporate neo-liberals and neo-cons are trying as hard as they can to undermine social Democratic control of the Democratic Party in US cities like Baltimore designated International Economic Zones for just this reason.
The supreme, absolute, and uncontrollable power by which an independent state is governed and from which all specific political powers are derived; the intentional independence of a state, combined with the right and power of regulating its internal affairs without foreign interference.
Sovereignty is the power of a state to do everything necessary to govern itself, such as making, executing, and applying laws; imposing and collecting taxes; making war and peace; and forming treaties or engaging in commerce with foreign nations.
The individual states of the United States do not possess the powers of external sovereignty, such as the right to deport undesirable persons, but each does have certain attributes of internal sovereignty, such as the power to regulate the acquisition and transfer of property within its borders. The sovereignty of a state is determined with reference to the U.S. Constitution, which is the supreme law of the land.
Executive Order 13083 - Federalism
May 14, 1998
Bill Clinton and now Obama
Weekly Compilation of Presidential Documents
By the authority vested in me as President by the Constitution and the laws of the United States of America, and in order to guarantee the division of governmental responsibilities, embodied in the Constitution, between the Federal Government and the States that was intended by the Framers and application of those principles by the Executive departments and agencies in the formulation and implementation of policies, it is hereby ordered as follows:
Section 1. Definitions. For purposes of this order:
(a) "State" or "States" refer to the States of the United States of America, individually or collectively, and, where relevant, to State governments, including units of local government and other political subdivisions established by the States.
(b) "Policies that have federalism implications" refers to Federal regulations, proposed legislation, and other policy statements or actions that have substantial direct effects on the States or on the relationship, or the distribution of power and responsibilities, between the Federal Government and the States.
(c) "Agency" means any authority of the United States that is an "agency" under 44 U.S.C. 3502(1), other than those considered to be independent regulatory agencies, as defined in 44 U.S.C. 3502(5).
Sec. 2. Fundamental Federalism Principles. In formulating and implementing policies that have federalism implications, agencies shall be guided by the following fundamental federalism principles:
(a) The structure of government established by the Constitution is premised upon a system of checks and balances.
(b) The Constitution created a Federal Government of supreme, but limited, powers. The sovereign powers not granted to the Federal Government are reserved to the people or to the States, unless prohibited to the states by the Constitution.
(c) Federalism reflects the principle that dividing power between the Federal Government and the States serves to protect individual liberty. Preserving State authority provides an essential balance to the power of the Federal Government, while preserving the supremacy of Federal law provides an essential balance to the power of the States.
(d) The people of the States are at liberty, subject only to the limitations in the Constitution itself or in Federal law, to define the moral, political, and legal character of their lives.
(e) Our constitutional system encourages a healthy diversity in the public policies adopted by the people of the several States according to their own conditions, needs, and desires. States and local governments are often uniquely situated to discern the sentiments of the people and to govern accordingly.
(f) Effective public policy is often achieved when there is competition among the several States in the fashioning of different approaches to public policy issues. The search for enlightened public policy is often furthered when individual States and local governments are free to experiment with a variety of approaches to public issues. Uniform, national approaches to public policy problems can inhibit the creation of effective solutions to those problems.
(g) Policies of the Federal Government should recognize the responsibility of--and should encourage opportunities for--States, local governments, private associations, neighborhoods, families, and individuals to achieve personal, social, environmental, and economic objectives through cooperative effort.
Sec. 3. Federalism Policymaking Criteria. In addition to adhering to the fundamental federalism principles set forth in section 2 of this order, agencies shall adhere, to the extent permitted by law, to the following criteria when formulating and implementing policies that have federalism implications:
(a) There should be strict adherence to constitutional principles. Agencies should closely examine the constitutional and statutory authority supporting any Federal action that would limit the policymaking discretion of States and local governments, and should carefully assess the necessity for such action.
(b) Agencies may limit the policymaking discretion of States and local governments only after determining that there is constitutional and legal authority for the action.
(c) With respect to Federal statutes and regulations administered by States and local governments, the Federal Government should grant States and local governments the maximum administrative discretion possible. Any Federal oversight of such State and local administration should not unnecessarily intrude on State and local discretion.
(d) It is important to recognize the distinction between matters of national or multi-state scope (which may justify Federal action) and matters that are merely common to the States (which may not justify Federal action because individual States, acting individually or together, may effectively deal with them). Matters of national or multi-state scope that justify Federal action may arise in a variety of circumstances, including:
(1) When the matter to be addressed by Federal action occurs interstate as opposed to being contained within one State's boundaries.
(2) When the source of the matter to be addressed occurs in a State different from the State (or States) where a significant amount of the harm occurs.
(3) When there is a need for uniform national standards.
(4) When decentralization increases the costs of government thus imposing additional burdens on the taxpayer.
(5) When States have not adequately protected individual rights and liberties.
(6) When States would be reluctant to impose necessary regulations because of fears that regulated business activity will relocate to other States.
(7) When placing regulatory authority at the State or local level would undermine regulatory goals because high costs or demands for specialized expertise will effectively place the regulatory matter beyond the resources of State authorities.
(8) When the matter relates to Federally owned or managed property or natural resources, trust obligations, or international obligations.
(9) When the matter to be regulated significantly or uniquely affects Indian tribal governments.
Sec. 4. Consultation. (a) Each agency shall have an effective process to permit elected officials and other representatives of State and local governments to provide meaningful and timely input in the development of regulatory policies that have federalism implications.
(b) To the extent practicable and permitted by law, no agency shall promulgate any regulation that is not required by statute, that has federalism implications, and that imposes substantial direct compliance costs on States and local governments, unless:
(1) funds necessary to pay the direct costs incurred by the State or local government in complying with the regulation are provided by the Federal Government; or
(2) the agency, prior to the formal promulgation of the regulation,
(A) in a separately identified portion of the preamble to the regulation as it is to be issued in the Federal Register, provides to the Director of the Office of Management and Budget a description of the extent of the agency's prior consultation with representatives of affected States and local governments, a summary of the nature of their concerns, and the agency's position supporting the need to issue the regulation; and
(B) makes available to the Director of the Office of Management and Budget any written communications submitted to the agency by States or local governments.
Sec. 5. Increasing Flexibility for State and Local Waivers. (a) Agencies shall review the processes under which States and local governments apply for waivers of statutory and regulatory requirements and take appropriate steps to streamline those processes.
(b) Each agency shall, to the extent practicable and permitted by law, consider any application by a State or local government for a waiver of statutory or regulatory requirements in connection with any program administered by that agency with a general view toward increasing opportunities for utilizing flexible policy approaches at the State or local level in cases in which the proposed waiver is consistent with applicable Federal policy objectives and is otherwise appropriate. 'THIS IS THE MAIN CLAUSE THAT HAS ALLOWED A COMPLETE DISREGARD TO US CONSTITUTIONAL EQUAL PROTECTION AND FEDERAL LAWS IN PLACE FOR OVER A CENTURY----NOTICE IS STATES---'CONSISTENT WITH APPLICABLE FEDERAL POLICY OBJECTIVES'.
Clinton's Federalism Act by Executive Order was the source of total disregard of Federal law and US Constitutional rights and led in the dismantling of all Federal agencies under SMALL GOVERNMENT. This is a states right issue and as Clinton/Obama/Reagan neo-liberals are far-right politicians-----they are indeed state's right. Social democracy was of course killed by this stance BUT AS WE READ THIS EXECUTIVE ORDER----we see over and over again that the states and cities have the power to interpret Federal and US Constitutional policy. Now, states like Maryland -----controlled by WALL STREET GLOBAL CORPORATE CLINTON/OBAMA NEO-LIBERALS AND BUSH/HOPKINS NEO-CONS of course brought the interpretation of ANYTHING GOES ergo these few decades of absolutely no oversight and accountability and dismantling of all public justice.
Republican think tanks always talk out of two sides of the mouth. They condemned Clinton for using Executive Order as did Reagan-----and they promoted the idea of UNFUNDED MANDATES FROM CONGRESS meaning if the Federal government does not send the funds then states do not have to embrace these policies. Bush's NO CHILD LEFT BEHIND was an unfunded mandate and yet no mention here. So, in these few decades of defunding and cuts all Federal agencies that once funded our environmental, labor and justice oversight and policy dried up and states said NO MONEY NO ENFORCEMENT.
Republican voters may have liked that these decades but these last several years have Bush/Obama simply saying I SEE NO FRAUD----I SEE NO MONOPOLIES------I SEE NO THREATS TO NATIONAL SECURITY BY PRIVATIZATION OF ALL OUR MILITARY AND HOMELAND SECURITY AND ALL OUR VITAL NATIONAL, STATE, AND LOCAL INFRASTRUCTURE TO GLOBAL CORPORATIONS----- which of course is ridiculous and has no connection to what our US Constitution says. Indeed, we have seen excessive abuse of Executive Order from Clinton/Bush/Obama----
A MAYOR OF BALTIMORE HAS THE POWER TO ENFORCE FEDERAL LAWS AND US CONSTITUTIONAL RIGHTS----A MAYOR HAS THE POWER TO BRING FEDERAL AGENCIES IN TO ENFORCE FEDERAL AND US CONSTITUTIONAL RIGHTS.
National, state, and local sovereignty issues are the greatest of threats in regard to public justice, civil rights, and our rights as citizens to create our own vision of Baltimore as an American city with a stable, healthy, local economy.
Below you can imagine the ignoring of EPA laws surrounding the building of Harbor Point on a toxic waste dump came with LOCAL OFFICIALS talking to an Obama corporate EPA to determine it was not a health or environmental risk.....and we all know it is.
90th Anniversary Series
Protecting Federalism: Still the Battle Cry of Cities
Posted on September 8, 2014 by Carolyn Berndt
The year 1995 was a time of “reinventing government,” with both the Clinton Administration and the new Republican majority Congress pledging to streamline government, balance the federal budget, and shift policy responsibilities to states, local governments and the private sector.
Fundamental questions about the roles and responsibilities of government took center stage in Washington. One that NLC was particularly concerned about was whether federal programs could be reduced or eliminated without shifting the costs to local governments in the form of unfunded mandates.
Then NLC Executive Director Don Borut said cities are essential partners in federalism discussions. “This national discussion on governance provides an important opportunity to restructure the relationship between local government and the federal system.”
The renewed focus on federalism was at time when cities were seeing a rise in regulatory or “coercive federalism” through regulations, mandates and preemptions and a decline in fiscal federalism, as Borut noted years later. From 1945-1995, the number of federal mandates on state and local governments increased from less than 10 to more than 100 (and probably more so today). Since the late 1970s the federal government’s share of city budgets has declined from about 15 percent to 5 percent (and probably less so today).
Thus, NLC developed a framework of principles through which to engage, initiate, and respond to specific structural and programmatic changes in government. One of the principles focused on “effective federalism,” meaning “not leaving national problems on the doorstep of local governments.”
Cities saw a major victory on the unfunded mandates front in 1995. The culmination of nearly two years work by NLC was celebrated at the 1995 Congressional City Conference with the news that the House and Senate Conference Committee had reached agreement on the final version of the Unfunded Mandates Reform Act (UMRA). In fact, President Clinton’s speech to NLC members was his first public endorsement of the bill and he guaranteed his signature.
NLC Second Vice President Greg Lashutka, Mayor, Columbus, OH said, “What was once the battle cry of overburdened cities and towns – no more unfunded mandates – is now on its way to becoming law of the land.”
A few days after the conference, President Clinton signed the landmark legislation before a jubilant crowd of state and local leaders from across the nation, including then NLC board member Clarence Anthony.
“As the long-awaited moment approached, sunshine broke from behind a wall of clouds, the Rose Garden was flooded with light, and clear skies graced the ceremony – an appropriate atmosphere for the signing of legislation that for the first time holds Congress accountable for the mandates it imposes on state and local governments and aims to prevent future unfunded mandates,” described an NLC news article.
With such optimism in 1995, the question then becomes, has the law lived up to its expectations? Hold that thought.
Over the course of the next several years, NLC joined with the other “Big Seven” state and local organizations in working with the Administration on additional guidance for implementing laws and developing rules that affect cities.
To that end, in August 1999, President Clinton issued Executive Order 13132: Federalism to “further the policies of the Unfunded Mandates Reform Act” and to “ensure that the principles of federalism established by the Framers guide the executive departments and agencies in the formulation and implementation of policies.”
In addition to enumerating the basic principles of federalism, the Executive Order directed federal agencies to set up a consultation process “to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.”
Under UMRA, an annual regulatory cost of over $100 million, in aggregate, to state and local government triggers an intergovernmental consultation process between the agency and elected officials. Under the Executive Order, federal agencies adopted guidance consistent with UMRA—a $100 million threshold for triggering the consultation process.
UMRA and the Executive Order in Review – EPA Does it Right
So, how effective has UMRA and the Executive Order together been in curtailing unfunded mandates and promoting the intergovernmental partnership?
Since 1997, the Congressional Budget Office (CBO) has assessed whether legislation considered by Congress contains unfunded mandates and whether any unfunded mandate costs exceeds the UMRA threshold.
According to CBO, in the 17 years since UMRA became effective, there have been 13 laws with intergovernmental mandates that had costs estimated to exceed the statutory threshold, the last of which was enacted in 2010. Examples include increases in the minimum wage; minimum standards for issuing drivers licenses, identification cards and vital statistics documents; and requirements on rail and transit owners and operators.
As an elected or city official, you might say to yourself, “I know there have been more unfunded mandates placed on local governments than that!”
Well, there are limitations to how UMRA defines an unfunded mandate, and some federal requirements that are not considered mandates under UMRA have still imposed burdens or costs on local governments. Congress has been pretty careful in the way it structures laws to avoid creating mandates in a technical sense. For example, the No Child Left Behind Act has obligations that must be met as a condition for receiving federal grants, but it is not considered an unfunded mandate under UMRA.
While the U.S. Environmental Protection Agency (EPA), perhaps more than any other agency, has been criticized for imposing a significant number of costly unfunded mandates on state and local governments, it is a model for effective federalism in that the process it uses today for developing rules serves to strengthen the intergovernmental partnership.
Since the Executive Order was issued in 1999 through 2008, only two EPA regulations were found to have aggregate costs to state and local governments above the $100 million threshold for triggering the intergovernmental consultation process. Yet, state and local governments know that the costs of complying with federal environmental rules and regulations are high and the number of unfunded regulatory mandates is growing.
In 2008 the agency undertook a review of its Federalism guidance, including soliciting comments on whether to lower the threshold for intergovernmental consultation. NLC, along with the other “Big Seven” state and local government groups supported lowering the threshold in order to have more regular consultation with elected officials, earlier in the regulatory process.
In November 2008, EPA announced that it was lowering the intergovernmental consultation threshold to $25 million in the “spirit” of federalism to improve the way the agency defines, conducts and makes regulatory decisions.
“By lowering the threshold, local governments could be consulted on a more regular basis on issues of mutual importance to the quality of life in the communities we both aim to serve and the fiscal impact of those decisions,” said NLC President Kathleen Novak.
“State and local officials often serve as the ‘front line’ managers of federally mandated environmental regulations,” said EPA Deputy Administrator Marcus Peacock. “If we want good rules, early consultation with these partners is crucial.”
Since the new, lower EPA Federalism guidance went into effect, NLC and the other state and local government groups were consulted with on 16 different rulemaking procedures before a proposed rule was even written, an opportunity that rarely existed before.
Building on Success
EPA’s action came at a time when state and local officials were calling for a stronger working relationship with federal partners in solving major environmental challenges.
The consultation is important. The early input is the rulemaking process gives cities a seat at the table and a say in shaping a rule from the beginning, which NLC has long advocated for and which strengthens the intergovernmental partnership.
Federal preemption of local authority and unfunded mandates from Congress and all the federal agencies are still serious concerns for local governments. UMRA was a victory for cities, but it has not stopped unfunded mandates in a broad sense. The lower EPA threshold for intergovernmental consultation was a victory for cities, which all agencies should follow.
With the midterm elections a few months away and as the nation gears up for the next presidential election, perhaps it is time for a new, new national discussion on federalism for the 21st Century.
I am not going into the long talk about Baltimore's privatization of all that is public-----but this is central to city sovereignty....and it all contains global corporate control.
If you have followed national public policy discussions for decades you know that several years ago after 2008 crash and Obama's advancement of global corporate policies especially in our US citizens designated International Economic Zones----you would have read financial journalism that stated-----IN ORDER TO MOVE GLOBAL CORPORATE INTERESTS INTO STATES AND CITIES WE HAVE TO HAVE BRANCHES THAT LOOK LIKE INDEPENDENT LOCAL BUSINESSES. That is what global pols do to make it appear there is no monopoly and in moving forward---no global corporate monopoly. This is why PEPSI owning most junk food and drink brands hides that fact by people thinking each brand is a separate company. It is one big monopoly of junk food and drink.
That is what is now happening with our US city vital infrastructure. They are hiding who owns what with global investment firms tied to venture capitalists tied to IVY LEAGUE endowments tied to multi-national corporations ----all of which now are tied to local branches posing as Maryland or Greater Baltimore companies.
THAT IS BECAUSE----IT IS A THREAT TO NATIONAL, STATE, AND LOCAL SOVEREIGNTY TO HAVE GLOBAL CORPORATIONS TIED TO OUR VITAL INFRASTRUCTURE---AND VIOLATES US MONOPOLY LAWS FOR NATIONAL UTILITY CORPORATIONS TO CONTROL ALL OUR UTILITIES.
Business & Developmentby Danielle Sweeney8:36 amSep 17, 201430
Concern and confusion as city promotes water pipe warranties from one company
Residents have been getting letters from Public Works encouraging them to buy water and sewer line protection from HomeServe.
Part 1 of a two-part series.
Above: The city wants residents to buy water and sewer line coverage from this Connecticut company.
By now, if you live in Baltimore City, you’ve likely received in the mail an official-looking letter signed by Rudolph S. Chow with the city’s black-and-yellow municipal seal in the upper left hand corner.
Chow, director of the Department of Public Works (DPW), invites you, the homeowner, to enroll in a service plan to protect your pocketbook from the cost of potential pipe repairs. Specifically, on the water and sewer pipes between the street and your house that you – and not the city – are responsible for repairing.
A utility line break can cost property owners thousands of dollars.
Not only does Chow urge you to get coverage, he recommends a particular company with whom the city has signed a two-year contract – HomeServe USA, a leading provider of home emergency service plans that serves 1.6 million active policies in the U.S. and Canada.
The solicitation has set off a ripple of anxiety in households and online discussion forums across town, in part because one company has been endorsed by city government.
“I, too, got the letter from the city with the recommendation, but am I the only one who thinks the city endorsing one company is a serious conflict – and reminiscent of Sheila Dixon and those illegal back scratching issues. . .?” a Patterson Park area writer posted to Facebook.
Another writer said he would check to make sure his homeowners insurance doesn’t already cover it,” but was suspicious of the timing of the insurance push.
“Along with the major water infrastructure upgrades,” he wrote, “[it] really smells like ‘we know we’re going to break some stuff, and we are going to do our level best not to fix it, so here, buy some insurance, and it’ll be somebody else’s problem.’”
A Marketing Partnership
DPW has yet to respond to these concerns, but said in an earlier release that HomeServe “offered the lowest single premium cost to consumers and other quality services that will benefit city homeowners.”
The marketing partnership allows HomeServe “exclusive rights” to establish and provide a residential water and sewer service line protection program for Baltimore residents.
The letter from Chow says that for $5.99 a month for the first year (and a to-be-determined renewal price thereafter), Baltimore homeowners will get exterior water and sewer line coverage with no deductible.
The sewer service line’s annual benefit limit is $10,000; the water service line has no annual benefit limit. Customers can also purchase either water or sewer line coverage separately.
As part of its agreement approved last May by the Board of Estimates, the city would provide HomeServe a list of water and sewer customers for direct marketing purposes, and allow them to use city and DPW logos for “co-branding” products and services. Hence, the city seal on the solicitation from Chow.
Like Another Tax?
Why, though, is the city promoting pipe insurance?
The insurance idea was first publicly revealed last November after the Board of Estimates approved an $83.5 million contract to start the process of installing “smart,” or wireless, water meters across the city.
Timothy Krus, city purchasing agent, said the meter upgrades and related construction by the city could have an impact on aging pipes on private property. As a service to homeowners, he said, his office and DPW were preparing an RFP (Request For Proposals) to solicit private companies to offer warranty protection for residential water and sewer breaks.
At the time, City Comptroller Joan Pratt said purchasing the warranty was “like another tax.”
DPW now says that its partnership with HomeServe is separate and distinct from the city’s upcoming water meter replacement program.
“The replacement of a meter is very unlikely to impact water service to a home,” the department said in a statement. “If a city contractor’s negligent actions are the cause of damage to a citizen’s pipes, the contractor will be held responsible for the city’s costs.”
“We’re Not Making Any Money on This”
DPW spokesman Jeff Raymond also states that the city is not making money on this HomeServe contract.
In fact, “HomeServe will provide a pool of money for a hardship fund that will be used to offset the cost of repairs on properties owned by indigent residents. But even this money [$150,000 per year] does not go to city coffers, as it is held by and administered by HomeServe,” Raymond said in an email to The Brew. “Baltimore City is not making any money off of its agreement with HomeServe.”
But an “administrative compensation fee” to the city was originally on the table – it was a requirement in the RFP to bid on the contract.
The RFP stated that “For exclusive rights to establish and provide a Residential Water and Sewer Service Line Protection program for City customers, Proposer shall pay the city a monthly Administrative Compensation Fee based on the number of active customers. . . during that monthly period.”
According to Raymond, “The RFP did mention it [the administrative fee], but by the time we got done, there was no administrative fee.”
A document on file at the Comptrollers Office confirms that the city will “forego the acceptance of any administration commission fee in favor of maximizing the available fund to city residents.”
Why the city first required an administrative compensation fee, but then chose not to accept it, is not clear.
Chow’s solicitation letter to city residents is a little confusing as well.
The missive clearly states that “HomeServe is an independent company separate from the city of Baltimore.” But it is the city’s – and not HomeServe’s – logo on the letter. (HomeServe’s logo does not have to be present, because the city is in a partnership with the company, said the Better Business Bureau of Connecticut, which reviews member advertising on an ongoing basis.)
Chow’s letter does state that the sewer and water line service is optional. It also tells customers that their “choice to participate in the service plan will not affect the price, availability, or terms of service from the City of Baltimore.”
Additionally, it notes that HomeServe is headquartered in Norwalk, Conn., and that homeowners should make their checks payable to HomeServe USA – not to the City of Baltimore.
And yet, Chow writes: “if you are interested in purchasing coverage for only one of your service lines [instead of the bundle] call us at the above number.” The “above number” is HomeServe’s.
Warranty, not Insurance
Whatever the city’s rationale for the partnership, an insurance policy for old pipes in Baltimore City, at least in principle, might make sense for some Baltimoreans.
But HomeServe’s policy is not insurance. It’s a warranty.
“HomeServe USA Repair Management Corporation. . . offers this optional service as an authorized representative of AMT Warranty Corp., the contract issuer.”
The difference between an insurance company and a warranty company likely has little to do with the quality of repair service a subscriber receives (The Better Business Bureau of Connecticut gives HomeServe an A- rating), but it’s an important distinction in terms of oversight.
No State Oversight
“We have no standing to regulate them.” Joe Sviatko, spokesman for the Maryland Insurance Administration, which enforces insurance laws and protects consumers, said. “They are not an insurance company.”
Who would help consumers with problems with a warranty company?
“We would refer any concerns to the Maryland Attorney General’s Consumer Protection Division,” Sviatko said.
The Attorney General’s office has not reviewed HomeServe’s warranty.
“The OAG doesn’t ordinarily review warranties unless there is a complaint or complaints and a reason to do so,” said AG spokesman David Paulson.