A new report released by San Diego Institute for Policy Research, in partnership with the Reason Foundation, revealed that San Diego taxpayers could save $80 to $200 million each year by allowing the private sector to compete with government agencies to perform certain services across San Diego.
The study was conducted in response to last year’s election, when voters decided in favor of Proposition C, which allows the city to contract services traditionally performed by the city’s civil service employees if determined to be more economical and efficient ” while maintaining the quality of services and protecting the public interest. This process is called managed competition.
The joint study, along with a report from Mayor Jerry Sanders’ office to address the city’s progress in implementing managed competition, was presented to the city’s budget and finance committee on Sept. 12.
“The voters who voted for this last year want to know where we’re at,” Sanders said.
During the meeting, Sanders said managed competition and the Business Process Reengineering (BPR), which streamlines city agencies in order to cut costs and make them more competitive in managed competition, will “ensure we’re doing everything we can to make the city the most effective and efficient organization that we possibly can.”
Anna Danneger, acting manager of the managed competition program until a permanent program manager is selected, reiterated during the presentation that managed competition would not affect city functions that “are so intimately related to the public interest as to require performance by government employees.”
The city has included policing, firefighting and lifeguarding in its definition of functions that are inherently governmental and will not be subject to managed competition.
Danneger said that while some functions may be subject to managed competition, it does not mean that they will necessarily be competitively outsourced. They will go through a pre-competition assessment, “the first stage of managed competition to determine if a function is appropriate for competitive procurement,” Danneger said.
Nearly one year after residents voted in favor of managed competition, speculation has risen as to what is taking so long, including the possibility that Sanders is waiting to unveil his progress closer to the June primaries to pack a bigger punch, according to Steven Francis, chairman and founder of San Diego Institute for Policy Research.
However, Francis doesn’t believe that is the case.
“I think that what it has more to do with is that the administration has taken a very lethargic approach to solving the city’s problems,” Francis said. “They haven’t been very aggressive with really anything that they’re doing.”
According to Sanders, it is the city’s effort to work with its employees and unions that have delayed the progress.
“Delays have stretched this process out,” Sanders said. “If you ask the unions, they’ll say we’ve moved too fast. If you ask others, they’ll say we’ve moved too slow.”
To help move the issue forward, the joint study focuses on 11 specific areas that could save the city money, including water and wastewater treatment, environmental services, street maintenance, parks maintenance and recreation programs, printing and copying services and library operations among others.
According to Sanders’ report to the City Council presented on Sept. 7, the city has completed BPR studies on 11 city functions and has initiated studies on nine other functions. Many of these studies are expected to be completed by the end of 2007.
While Sanders has yet to identify which 20 city functions have been evaluated he previously stated that trash, water and wastewater could conceivably be affected by managed competition.
“This report was designed to be helpful,” Francis said. “We’re not here to challenge the mayor today. We’re not here to criticize the mayor. We’re here to be helpful.”
The joint study includes over 30 examples where other cities have successfully partnered with the private sector to improve services and save money.
According to the mayor, with the help of the BPR process city agencies will remain competitive throughout the bid process.
“They’ve actually created organizations that will preclude competition or win any competition that comes forward,” Sanders said.
According to a timeline presented by Danneger, pre-competition assessments will be initiated by the end of 2007 and should be complete by the spring of 2008, followed by an announcement of those functions open to competition.
For more information on the mayor’s progress in implementing managed competition, visit www.sandiego.gov/mayor/news/index.shtml.