So, um, what's Prop. C?
You haven't read a newspaper during the last month, have you?
No. What is it?
Sigh. Proposition C, on the Nov. 7 ballot, would amend the City Charter to allow private companies to bid on tasks currently performed by city government employees. The mayor would appoint a seven-person advisory board to consider which operations are running efficiently and which could be improved through competition with private firms.
What's the point of doing that?
Millions and millions of public dollars. Some for us-the public-and some for your friends at your favorite private company.
The White House's Office of Management and Budget says the federal government saved 20 percent in offices subjected to managed competition. Mayor Jerry Sanders likes to point to Indianapolis as his model for privatization, particularly the $700 million in savings that were redirected to fixing the city's infrastructure.
Getting a figure for savings in San Diego is a bit of guess work, because, you know, San Diego's budget documents, they're not so much with the neat and tidy. The mayor published the draft 2003 Comprehensive Annual Financial Report last week. In that year, the city spent $1.2 billion out of its general fund on services like mowing Balboa Park, photocopying documents for the City Council and putting out fires. Take out public-safety services the mayor says he won't outsource (though there is no language in the initiative saying so), and there's $700 million in expenses. If somehow San Diego outsourced all of that, 20 percent would net $140 million in savings. But that's a little ridiculous-some of that is in protected salaries and not all departments will be subject to competition. Mayor Sanders' spokesman, Fred Sainz, says the mayor's office has done no estimates of the savings (which is kind of amazing, when you think about it), but that a somewhat smaller figure in the realm of $100 million is reasonable. Of course, all this is based on information coming out of the White House, so do with that what you will.
Sweet! That's a ton of money.
Eh. Look at it against the $3.1 billion-at least-that San Diego owes its future retirees, including the cost of lifetime health benefits. And the billion or so we need to take care of all the deferred maintenance like fixing potholes, replacing water pipes and repairing buildings. And the hundreds of millions we'll have to spend cleaning up pollution in the various watersheds, like Chollas Creek and the San Diego River. But, sure, it's a start.
Why haven't we done this all along?
It's just not how government was run. When the Constitution was written lo these many years ago, there were only five cabinet departments (State, War, Treasury, Justice and the Postal Service). Now there's 15, plus the assorted other offices like the Environmental Protection Agency and the National Security Agency. Most of American history has been a tale of expanding government, with big growth spurts after the Civil War and the New Deal. Finally, after President Lyndon Johnson's Great Society Programs, budget hawks had enough of government spending, taxes and high deficits. Part of Ronald Reagan's revolution in government meant making government smaller than it had been, reducing regulation and allowing the private sector to perform services.
The federal government has been engaged in managed competition for decades now, but President Bush ordered something close to Prop. C in May 2003. The federal version, known to insiders as A-76, mandates that government agencies identify certain activities as “inherently governmental.” Everything else is just an opportunity for managed competition. For the record, Prop. C contains no such caveat about “inherently governmental” operations. That's part of why people are all nervous.
People are nervous?
Yes. There's a lot of concern that opening up the government to privatization like this is just begging for corruption. Companies looking for an edge on a contract vote might decide it would be a good idea to slip a couple of hundred dollar bills into the mayor's Christmas card. Or companies will cut corners on things like maintenance to save a few bucks. The Indianapolis story isn't all sunshine and bunnies-the privatized water department sent out 15,000 incorrect bills.
And contracts have a way of ballooning. The ballot measure requires annual audits, but will that be enough to prevent a repeat of San Diego's Kroll experience-you know, the $250,000, six-month contract that became $20 million and two years.
Hey, yeah-the city already contracts out all kinds of stuff.
It does. The lawns around the libraries are cut by a private contractor, just to pick one. Prop. C opens that door much wider. The City Charter describes two types of employees, classified and unclassified. Unclassified employees include your elected officials and some top departmental officials. The classified employees are everyone else, and they, according to City Attorney Mike Aguirre, cannot be outsourced. To clarify further, any function already performed by city employees cannot be outsourced. Currently, only new tasks can be contracted out (the library lawns were a new function). If Prop. C passes, then everyone is fair game, including, technically speaking, cops and firefighters. Sanders, a former cop himself, now says he will propose a charter amendment in 2008 that will protect sworn police and firefighters from the possibility of being outsourced.
So, he's saying, “Trust me”? That never goes well.
Yeah, that is the trouble. Prop. C leaves a lot out. It requires performance measures for each contract without describing them, and those audits are left in the hands of the mayor. Even now, the mayor and the labor unions are negotiating behind-the-scenes deals to figure out the details.
Defenders like to point to the existence of the “independent review board,” but five (including the City Comptroller and Auditor) of the seven members are appointed by the mayor with confirmation from the City Council. The mayor also gets to appoint a staff member to the board without any council confirmation at all. And, ultimately, the person responsible for all the enforcement measures and administration is the mayor, not the council.
Is this really just about city contracts? People are calling each other liars, demagogues and conspirators. What the hell?
Well, this is San Diego, after all. “Managed competition” is just another way to say “union busting.” The city labor unions-the American Federation of State, County, and Municipal Employees and the Municipal Employees Association-have been king makers in City Council races lately. Local elections traditionally have low turnout, and unions get people to the polls, plus they run issue ads and make campaign donations. Of those two, the MEA is at greater risk. AFSCME represents 2,000 blue-collar city workers. These guys pick up your trash and carry bricks. Sanders has been in their shops and field houses and, according to Local 127 President Joan Raymond, promised them their jobs were mostly safe.
That leaves the middle managers of the MEA. A major proponent of Prop. C, Carl DeMaio, director of an outfit called The Performance Institute, says that based on conferences he's held, the people who represent dead weight are typically middle mangers.
To his mind, the point of Prop. C is as much to break the government monopoly as it is to bring in private business. Since government departments have as much of a shot at winning the contract as the private companies (at least the first year, before all the equipment is sold and the department office is turned into a Taco Bell), they will make themselves more efficient. If Prop. C passes, DeMaio expects government agencies to win most of the bids, but he hopes they'll be doing a better job. Of course, if they lose the bid, out on their tuchus with the lot of them.
Yup, that's life in the big city. Of course, this may all be just a power play by the mayor. Sanders promised no new taxes, and he can't get to the public markets for bonds, thanks to past corruption and incompetence. The only other way out of the budget mess is to reduce the cost of government.
That's where Prop C comes in. The Vote Yes on B & C Campaign HQ has the same address as Shepard & Associates. Tom Shepard ran Sanders' campaign. He has leveraged the mayor's astonishing popularity to earn support for the initiative.
DeMaio, by the way, has already put a poll in the field. He wouldn't tell CityBeat what the results were, but he did say, “If people understand Prop. C, they'll vote for it. And they seem to understand Prop. C.” If the Prop. C club can be used to break the unions, then the mayor further weakens the City Council. With union support sidelined in the next election, Sanders' endorsement is political gold. Council members elected with his support will be beholden to him, and ordinances he doesn't like-like the living-wage law-could be repealed.
OK, bottom line, how should I vote?
Make up your own damn mind.
OK, here are the competing values: If structured properly, managed competition could save San Diego a lot of money every year.
But perhaps you value having these services performed by an organization not motivated by profit. The Center on Policy Initiatives, a labor ally, employs a guy named Murtaza Baxamusa, who put it like this:
“When we are in crisis, we go back to our values and core beliefs,” he told CityBeat. “In crisis we want to safeguard our public institutions. They will be the building blocks for our future. The last thing I want my children to inherit is Halliburton by the sea.”