CITY LIMITS: Mayoral hopefuls debate services

Some laud it as an important component of any plan to get the city out of debt. But others call it a whitewash applied to a history of administrative incompetence. Some argue that it's what everybody's doing in cities across the country. But others say "everyone" is getting gyped. It is the privatization of city services, a normally uninspiring, dry-as-toast topic that has taken center stage in this fall's mayoral campaign. It is a key plank in the leading candidate's platform to restore the city's financial stability, it riles up laborers to the point of inter-union riots and yet, after all the dust settles in November, it may face insurmountable political and legal hurdles. And no one even really knows what the word means. · The term "privatization" has been worn thin this year since Democratic mayoral candidate Edward Rendell introduced his plan to put city services out for bidding as a way for the city to cut costs. Rendell's plan would offer private corporations the chance to perform nearly any service the city provides -- except law enforcement -- while the city continues to oversee the service. But Republican mayoral candidate Joseph Egan says Rendell's plan is a smokescreen for Democratic excesses. Last week, he called the plan a "marvelous gimmick," and said it unfairly places the blame of "25 years of mismanagement" on city workers, who he says will have no control over how their departments are run. "It's cruel," the former businessman said last week. "It sends the wrong message." But Rendell has steadfastedly defended his proposal, saying his plan will increase efficiency among city employees. · Rendell said last week his plan to bid out city services includes almost everything but police protection. But privatization's critics say Rendell's stand has shifted, adding that first and foremost he wants to privatize trash collection. The Democratic mayoral candidate maintains that he originally focused on trash because Mayor Wilson Goode failed to privatize trash collection during his reign in City Hall. But despite Rendell's efforts to explain his proposal, the plan has been called everything from anti-union to subtly racist. Critics maintain that the city unions offer more opportunity than private unions, and that minorities -- particularly blacks -- have been able to move up the economic ladder through city jobs. American Federation of State, County and Municipal Employees Local 427 spokesperson Leonard Tillman said Rendell's proposal would cause black workers to lose their jobs despite the fact that they are already improving productivity. Tillman cited the city's trash collectors as an example, claiming they have saved $15 million over the past few years. He added that private contractors have not listened to city officials' request to exclude laid-off city workers from private payrolls. "If it's not racial overtones, it sure sounds like it," Tillman said. But it is Egan, who has been desperately courting the black vote during the campaign, that has harped on the plan the most. "It sends the wrong signal at a time we must all be together," the GOP nominee said. · Indeed, "privatization" really isn't the proper term for Rendell's plan, according to Theodore Hershberg, a public policy professor who worked for a year in the Goode administration. Privatization, he said last week, means not only that city workers do not perform a service, but also the city does not manage it. And Hershberg said the Democratic candidate's plan is necessary for the city to begin cutting costs and getting out of its financial crisis. "The problem is not the private sector versus the public sector," Hershberg said. "The problem is monopoly." This monopoly, along with restrictive civil service rules, allows workers to become complacent and reduces their productivity, Hershberg said. They "go with the flow," he added, because they can be neither rewarded nor punished under the work rules. But Hershberg said the savings workers produced under a competitive situation could be partially returned to them in the form of benefits or bonuses. And Egan concedes that changes must be made in union work rules to increase productivity and has suggested that the city concentrate on "doing a few things well" and getting out of providing other, unspecified municipal services entirely. But many observers say the savings from bidding out city services is often misunderstood. Under Rendell's plan, private contractors must be union shops, while in other cities, private corporations must pay union wages. Hershberg said many city union leaders maintain that way the city would save money is by hiring companies with exploitative labor practices. But even contractors' proponents say that good management is required for municipal services to be carried out effectively by private workers. The private firms must be closely monitored to ensure the firm maintains its standards and that the city sign long-term contracts in order to keep costs relatively stable. · Rendell's proposal offers city workers a cushion where if their bid is less than five percent higher than the lowest private bidder, they still get to keep the contract. Rendell said he would also allow city union leaders to examine the lowest private sector bid to see if they could come within five percent of it -- a move which several analysts say is beyond the city's power. The 1951 City Charter states that when projects are bidded out, the lowest responsible bidder must be awarded the contract. Egan, who opposes bidding out city services, said Rendell's plan is effectively moot because changing the charter would be an extensive, lengthy process. Rendell has a more immediate roadblock in front of him, according to Committee of 70 Executive Director Frederick Voigt. Before any municipal services could be placed in private hands, the City Council must approve, Voigt said. Judging from past relations between Council and the mayor, Council approval of contracting out city services is in no way guaranteed. · In the competition between the public and private sectors, most experts agree that municipal workers should be able to do the job more cheaply than private contractors. Los Angeles Purchasing Director Tony Riolo said last week the municipal union usually is the lowest bidder whenever the city accepts bids for municipal services. The city unions have an advantage, Riolo said, because in their bids, they need not account for profit. In Los Angeles, the city does not have the option of accepting the city union's bid if it not absolutely below the lowest bid by a private contractor. However, the city will discount a bid five percent for comparison purposes if the contractor is from Los Angeles County. The largest municipal service provided privately by the city of Los Angeles, he said, was removal and dumping of hazardous waste -- a service never performed by municipal workers because it was too expensive to train the workers and maintain all of the proper licensing agreements. "We don't usually farm out services in Los Angeles," he said.

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