Privatization Threatens Services

University of Maine white paper on the
dangers of privatizing public jobs

AFSCME 127 Members make their case to
the City of San Diego

Contracting in the Dark

As San Diego moves to contract out more city services, taxpayers and even City officials are in the dark about the true costs of the City's already massive contracting bill.

San Diego is spending $1.4 billion this year on supplies and services, with a large and unknown portion of that going to contractors.  That's Billion with a B and it's half the City budget.  The contracts aren't individually listed in the budget, and only those with an initial price tag above $250,000 are reviewed by the City Council.

And the true cost may be much higher.  Talking to city workers, CPI has found numerous cases in which contractors botched a job and city staff were sent in to redo it, fix it or clean it up -- adding to city payroll expense.  

Some of the stories they told:

• Contractors have repaved intersections without repainting the crosswalks, and installed pedestrian ramps leaving a drop-off that had to be connected to the street.  
• When a contractor painted doors in City Hall, city staff were called to take the doors down, rehang them and paint the other side, because those tasks weren't spelled out in the contract.

A contractor left streetlights in Point Loma and DeSoto hanging from plastic zip-ties. City staff redid the job before the lights dropped into the street.

Nationally, cost overruns and service failures are common when public functions are privatized -- the most prominent example being Halliburton's substandard services and vast overcharges in Iraq. On the local level, many cities have learned the hard way that privatization often brings hidden costs and quality problems.

• Stockton, California, is reversing the privatization of its water utility this month, after six years of sewage spills, excessive rate increases and poor maintenance under a private firm.
• Midland, Texas, is resuming public control of its swimming pools after the contractor doubled the city's costs.
• In Nashville, contractor Wackenhut Corp. left city buildings inadequately guarded. In December, thieves broke in and took two laptop computers containing the Social Security numbers of 337,000 voters.

With Mayor Sanders and his reelection challenger both pushing for faster privatization of city departments, city officials must make sure systems of monitoring and accountability are in place and adequate to ensure we get what we pay for.