While admitting to concerns about costs, service quality, risks to public health and more, San Diego officials are moving quickly to outsource six city services.

A City Council committee yesterday sent the draft contract for two of the services – water customer service and street sweeping – to the full Council for a final decision.

CPI is urging the Council to resolve serious issues before finalizing what will be required of any company chosen through the “managed competition” outsourcing process:

• Will the contract for water customer service require a local call center, so residents can contact someone with knowledge of the area and local jobs aren’t lost?

• Will the street-sweeping contract include environmental safeguards and prevent the company from damaging or misusing the expensive city-owned vehicles?

• How much is outsourcing expected to save taxpayers? Asked point-blank for an estimate of the savings, city administrator Wally Hill said he didn’t have even a rough estimate but relied on projections by the pro-privatization Reason Foundation.

• How much is the outsourcing process costing taxpayers? The city just wasted $500,000 on consultants in a failed effort to sell off Miramar Landfill, but massive amounts of staff time have not been calculated.

• How will strong oversight be ensured, given the city’s record of contractor problems? Recent examples include contracts for ambulance service, computer and IT systems, and the fire debris removal.

• Will contractors have to comply with Public Records Act and other transparency requirements?

• Council members on the committee repeatedly voiced doubts that outsourcing would save any money or maintain service levels, but said they were compelled to continue the “managed competition” process because voters demanded it in 2006.

 

In fact, the voter-approved measure, Prop C, allows outsourcing of City services “if determined to be more economical and efficient while maintaining the quality of services and protecting the public interest.”

“What the voters approved was saving money, if possible, while keeping the quality of services intact,” said CPI Executive Director Clare Crawford. “We are concerned that the cost of negotiating and overseeing these contracts may exceed any savings and worsen the city’s budget problems.”

Elanor Starmer, Western Region Director of Food & Water Watch, told the committee that 20 US cities have recently brought their water systems back in-house because of poor service and high costs from private operators. She said in-sourcing significantly lowers costs and is now as common as outsourcing.

With six city services going through managed competition at once, CPI submitted a memo to Council documenting the need for greater caution and strong oversight.

The contract for operating Miramar Landfill is up next, with a committee meeting scheduled on May 18. Last year, the city paid consultants $500,000 to set up direct privatization of the landfill before resolving issues such as environmental liability and approval from the Navy, which owns the land.

CPI has requested information on how much the privatization and outsourcing efforts are costing in staff time and city resources. A true fiscal analysis is needed – with real savings projections rather than the privatization industry pitch – to meet the voters’ true intent.