Posts about Privatization & Contracting
City Budget Needs
By Clare Crawford | February 7, 2013 |
Take a look at this CPI op-ed published this week. It may get you thinking about how the budget for city services affects your life.
City services like trash collection are crucial to daily life. With the budget season underway, CPI argues that budget cuts are no bargain when they shortchange city residents on basic services.
It’s budget season at San Diego City Hall, and this year for the first time, we have a Mayor who ran on a “Neighborhoods First” platform. The stage is set for a budget process that will prioritize the needs of city residents and diverse communities.
City services took a beating under the previous administration, when the focus was on budget-cutting rather than measuring and ensuring adequate service levels. As our op-ed states: “It’s time for a real conversation about the need to deliver the services San Diegans expect and deserve.”
City services aren’t luxuries. Cutting them below needed levels harms our quality of life and can result in far greater costs, such as the recent court judgment linking a horrific accident to a lack of city tree trimming.
CPI and the Community Budget Alliance will be at City Hall frequently this spring, working for adequate and equitable funding of crucial city services and infrastructure improvements. (Here’s a recent news clip of CBA members in action.)
We’ll be in touch throughout the budget process. Here are some key dates: Councilmembers must send their budget priorities to the Mayor by March 1, and the Mayor releases his budget April 15. The final budget vote is expected on June 10.
The High Costs of Blindly Cutting Budgets
By Corinne Wilson | Published in Voice of San Diego | February 5, 2013 |
What good is city government?
We all rely on city services for the necessary basics that support our daily lives. Ideally, everything runs so smoothly we barely notice all the work that goes into keeping our city clean, safe and functional.
But when those services stall or fall short, the disruptions get our attention and the long-term repercussions can lower our quality of life. When the sewer lines back up, the firefighters arrive late or uncollected garbage piles up, the value of municipal government becomes crystal clear.
In San Diego, repeated budget-cutting during the administration of former Mayor Jerry Sanders has reduced some of our public services to unacceptably low levels.
Saving money is great. But simply slashing budgets without a realistic assessment of whether citizens are getting the services they need is not only irresponsible but ultimately more costly than providing good, efficient services.
The tree-trimming budget is a particularly troubling case in point. Over the past six years, the budget for tree maintenance along our streets was cut in half and then eliminated except for emergencies. An untrimmed, top-heavy palm tree fell on a city resident and left him paralyzed. A jury recently ordered the city to pay $7.65 million for its negligence in failing to maintain the trees, according to Courthouse News Service.
Clearly, that budget-cutting decision did not save money. And, even more importantly, it put the health and safety of San Diego citizens at risk.
Last week, the City Council voted to restore some funding for trimming palm trees in public rights of way. Now the council must take proactive action to determine the appropriate levels of other services, rather than waiting until damage is done.
It’s time for a real conversation about the need to deliver the services San Diegans expect and deserve.
To begin with, we are lacking the information and systems to measure whether the services provided to city residents are at adequate levels. And the city pays private contractors to provide many of our services, without sufficient oversight of how well those contractors are doing their jobs.
During the previous administration, the budgets that determine service levels were drastically reduced for many city departments, with the budget taking priority over realistic needs. We need a full accounting of those cutbacks and the services we have lost, from library and swimming pool hours to police car maintenance.
Before the “managed competition” program continues, we need to pause and take stock of our needs as a city. Each managed competition is based on the current service levels of a city department and concludes with a contract awarded either to that department or a private contractor. Already, city administrators have had repeated difficulties defining the work to be done in the contract documents.
To avoid locking us into reduced service levels that put citizens and city finances at risk, the city needs to develop solid measures of service levels and quality. That process should involve residents from all parts of San Diego.
Everyone who lives and pays taxes in San Diego needs the services that only city government can provide. We need debris cleared from the streets and storm drains, safe water piped to our homes and maintenance of fire trucks and garbage trucks completed regularly — to name just a few crucial services.
Good fiscal stewardship is not just a matter of doing things on the cheap. It means getting good value for money spent. It’s no bargain to shortchange city residents on basic services and put public health and safety at risk.
Corinne Wilson is research and policy lead at the Center on Policy Initiatives, a San Diego nonprofit dedicated to economic equity for working people and communities.
Open the Competition: Insourcing Is the New Outsourcing
By Clare Crawford | Published in U-T San Diego | July 25, 2012 |
Four times, the city of San Diego has pitted city workers against private companies in a competition for the continued responsibility to provide an essential city service. All four times, the city workers have proved that they – as U-T San Diego put it last week – “provide taxpayers with the best bang for their buck.”
The evidence is in. Given the chance, city staff can figure out how to do their work at a lower cost than private, for-profit companies can.
It’s time for the city administration to set aside assumptions that privatization saves money and find out whether more savings are possible by allowing city staff to compete for work that is now contracted out.
A significant share of the city’s general fund budget – $176 million in the past year – goes to pay private contractors and consultants.
In fact, the next service on Mayor Jerry Sanders’ “managed competition” auction block – street and sidewalk maintenance – is already substantially outsourced. The city’s fiscal year 2012 budget shows $43.6 million spent on contracts in the transportation and stormwater department, compared to $38.4 million for employee wages and benefits. Much of that contract expense is for major street resurfacing projects.
San Diego taxpayers deserve to have all options evaluated for saving money on at least some of those projects.
And insourcing may also improve the quality of services, which can be substandard under private contractors seeking to maximize profits. Even residents of the mayor’s own neighborhood of Kensington have suffered, when a contractor two years ago left streets torn up for months and left equipment in the gutters that caused a rash of tire punctures.
While privatization consultants continue their drumbeat of promises, a repeated pattern of service failures and cost escalation has prompted many cities and states to insource services previously privatized. Mildred Warner, a Cornell University expert on privatization, says the reversal began in 1997, when contracting out public services peaked in the United States.
“The privatization experience of the late 20th century has taught us that … managing markets for public services is both challenging and costly,” Warner wrote in 2008. “That experiment has failed to deliver adequately on efficiency, equity or voice criteria.”
The top two reasons city managers bring privatized work back in-house, according to a survey by the International City/County Management Association, are unsatisfactory service quality (61 percent) and insufficient cost savings (52 percent). For example:
- Evansville, Ind., took back control of its water and sewer system from a private operator in 2010, for an estimated savings of $14 million over five years.
- Atlanta dissolved its water system contract 16 years early because of mismanagement and poor service under a private company.
- A Pennsylvania study this March found the state could save $78 million by insourcing school bus services.
- Locally, the San Diego Unified School District has saved $1 million a year since bringing bus services in-house in 2010.
- The San Diego Community College District has saved at least $900,000 a year by insourcing its IT management.
San Diego uses a managed competition process similar to that used by the federal government, requiring contractors to save at least 10 percent over the employees’ proposal to account for the city’s costs in transitioning to private service delivery. City workers won the landfill competition without applying that differential.
But outsourcing also frequently carries many more hidden costs for taxpayers – such as environmental violations, the loss of local jobs and a lack of transparent and accessible public records.
Besides saving $2.7 million a year, keeping city workers on the job at Miramar Landfill means we all can breathe easier about the continued safe and efficient handling of more than a million tons of waste each year, hazardous materials and closed landfill sites.
As Councilman Todd Gloria tweeted following the landfill announcement Friday: “No one delivers services better than city staff.”
Since managed competition is intended to save money, it only makes sense to include city staff in a full competition for important services that are now outsourced.
Crawford is executive director of the Center on Policy Initiatives (CPI), a local nonprofit that advocates for workers.
Keep Miramar Landfill Under Public Control
By Clare Crawford | Published in voice of sandiego.org | September 23, 2011 |
The first proclaimed success in San Diego’s “managed competition” program has stumbled right out of the gate. The handling of the relatively simple publishing department contract should raise red flags as City Council prepares to vote Monday on putting Miramar Landfill out to bid.
As other cities and states have learned, contracting out complicated vital services requires extreme attention to the details of those contracts.
But in the case of San Diego’s publishing services, the city’s business office accepted a bid that included use of a computer system the employee team believes to be more efficient — and now is requiring a different system.
If a private contractor had won the bid and the city tried this after-the-fact switch, taxpayers would face a big cost increase or perhaps a lawsuit.
The city’s business office wasn’t able to specify the work necessary to contract out publishing. A similar mistake on Miramar Landfill could have far more serious implications for San Diego taxpayers and our environment, public health and essential services.
San Diego’s only public landfill, Miramar is a complex venture that has been efficiently operated by city staff for 50 years, generating revenue and providing numerous services to all San Diegans. Every household in the city relies on it. Besides safely handling the 1 million tons of garbage we collectively produce each year, it provides community services ranging from neighborhood cleanups to recycling and free mulch.
Contracting out landfill operations is fraught with risk. It involves managing more than 80 subcontracts and complying with at least 23 regulatory agencies. If a private operator is able to cut corners — whether because of a poorly written contract or a lack of oversight — potential water and air contamination, escalating costs and reduced services are at stake. This contract would have to be precise to the last detail.
In 2006, voters empowered the city to use managed competition if it maintains service quality, protects the public’s interest and saves money. The mayor already spent more than $500,000 in taxpayer dollars to learn that privatizing the landfill is a bad idea.
Miramar Landfill is best left under public control. The City Council can protect the public’s interest by voting on Monday to reject the business office’s proposal to put it up for bid.
Councilmembers demand answers before outsourcing Miramar Landfill
By | May 18, 2011 |
Saying serious questions haven’t been answered, a San Diego City Council committee put the brakes on the Mayor’s plan to put Miramar Landfill out to bid. The Rules committee voted 4-1 to send the outsourcing plan back for revision.
Read CPI’s memo to the committee
Before the vote, the committee heard testimony from dozens of community leaders, students, city residents, neighborhood associations and environmental organizations. Every speaker opposed outsourcing landfill operations, at least until more information and safeguards are provided.
Councilmember Sherri Lightner said she is concerned the landfill operation may be “inherently governmental” – and not appropriate for outsourcing at all – because of the risks to public health and safety. Among those risks are potential methane gas buildup and toxic fluid leakage into canyons and Mission Bay.
“CPI had found that the proposal lacked critical protections for citizens and the environment,” said CPI Executive Director Clare Crawford. “We’re glad to see the Rules committee took its role very seriously, and that these councilmembers will make sure we maintain the same high standards and service levels now in effect at Miramar Landfill.”
San Diego wasted $500k on consultants; more scrutiny needed as quest to privatize landfill continues
By Susan Duerksen | March 24, 2011 |
A consulting firm received $500,000 to handle the botched sale of Miramar Landfill, as the San Diego City Council
learned in a budget revision this week. On the heels of that costly failure, Mayor Sanders has already launched into another effort to privatize the landfill.
CPI is urging the City to adequately evaluate the viability, costs and consequences before continuing the headlong rush to outsource the vital public service.
Greenberg Traurig consultants were hired for $500,000 before basic questions were ans Read More
SDDPC, a New Transparency
By Murtaza Baxamusa | Published in VoiceofSanDiego.org | April 2, 2010 |
Next week, the City Council will approve an IT service contract for $45 million annually. This is to process over 60 million emails, maintain hundreds of software applications from golf-course reservation to service schedules of fire engines and handle emergencies from virus attacks to network blackouts. The contractor is a nonprofit corporation that has had a sole-source agreement with the City since 1979, the San Diego Data Processing Corporation (SDDPC).
The most outstanding element that distinguishes the new SDDPC contract from any other contract, is its level of transparency. Everything the contractor does in the performance of public functions is subject to the Public Records Act. Every meeting of the corporation board is subject to the Brown Act. It submits annual financial statements as well as performance reviews and customer satisfaction surveys. And, the public knows the compensation of its executives as well as its employees. Read More
Shadow Elite: If You Believe That, I’ve Got a Bridge to Sell You….
By Donald Cohen | Published in The Huffington Post | February 25, 2010 |
A note from Shadow Elite author Janine Wedel:
America’s governors descended on Washington this week for their association’s winter meeting. To see the amiable crowd mingling in black tie at the Governors’ Ball, you’d never guess these public servants are in the midst of a fiscal tsunami, frantically slashing jobs and vital services as they face a combined $134 billion budget hole over the next three years. This post, by Donald Cohen, Executive Director of the Center on Policy Initiatives, is a troubling look at one way politicians are trying to help plug that staggering hole: selling off bridges, buildings, even parking meters to private enterprise, in deals engineered by the very Wall Street interests that helped bring on what some call the Great Recession. Read More
Deceptive ballot drive to kill the Living Wage!
By Susan Duerksen | February 19, 2010 |
A misleading campaign has begun for a San Diego ballot measure that would reverse a decade of CPI progress for workers and their families, including the Living Wage Ordinance.
City Councilmember Carl DeMaio, with funding from contractor groups, is collecting signatures for a November ballot initiative that would force privatization of city services and make San Diego the only city in the U.S. to ban Living Wage laws. Read More
Ending the Contractor Gravy Train
By Murtaza Baxamusa | Published in voiceofsandiego.org | October 19, 2008 |
Taxpayers should not be the last refuge of irresponsible businesses. Yet, every level of government — from the city of San Diego contracts to post-Katrina and Iraq reconstruction at the federal level — is suffering the consequences of unaccountable and irresponsible contracting practices. Recent reports describe how contractors knowingly overcharged the city more than $2 million for debris removal after the wildfires. This is because of our apologetic approach to interfering in the free market, even when the government is a key player in the market itself. This apologetic nature is reflected in poorly written and un-enforced contracts, our tolerance for poor quality services and claw-backs, and our reluctance to ensure that contractors do not violate the law. Read More
