privatizing city services would put toledo on the right track

A recent comment I made to a story on Swampbubbles where I indicated that one way Toledo could afford to boost its police force (and thus help rid itself of the gangs and losers who have brought the City to the brink of Detroitism) is to privatize as many City services as possible.

It's a simple concept--get government out of the employment business. Other than covering the safety and judicial needs of its citizens, a City shouldn't have people on its payroll who perform services that the government could contract out. These services include maintaining City property (cutting lawns, etc.), clearing snow, fixing streets, etc.

My comment was met by one Swampbubbles contributor with the response, "prove that this would save money." Well, here's some proof.

When the City hires an individual, it is required to pay into an Ohio public retirement fund for that person. You may be surprised to know that the City pays 14 percent of a City worker's annual income into the Public Employee Retirement System.

According to the City of Toledo's 2014 operating budget, the City paid $157,605,160 in salaries and wages. That means that the City paid over $22 million into the State retirement system. That's money that could have been saved if the City would have hired private companies to do the manual labor that these benefit-rich City employees perform.

But the problem is that the City's elected officials rely on campaign contributions from the public sector employee unions--so they won't do what's in the taxpayers' best interest. Sad and frustrating.

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According to the story on Swampbubbles, it is good to hear that boosting our police force may get rid of the gangs and losers from the city of Toledo.

Privatizing City of Toledo Services would provide crooks more opportunities to steal tax dollars.

How?

Generally contracts have benchmarks and scope of work. If those are not met the city can either negate the contract or utilize pre-built penalties.

The good thing about privatizing is the government can require that work be done and completed to satisfaction before the contract is paid in full.

Generally privatization costs more but there is no question that private businesses are able to do more than bureaucracies.

The problem with contracting government work is when government officials don't hold the contractor responsible for the scope of work or does not inspect the finished product before completion. Or when the government lets contractors subcontract without proper oversight.

MikeyA

Government has been contracting with private companies FOREVER! How many times have recently built roads and/or bridges fallen apart? How many times do we see work crews where one or two people are working and three or four others are standing around? These roads and bridges are almost all built under government contracts to private companies. The truth is that private companies often purposely cut corners to maximize profits on government work, because they don't relate to the projects being done for people. They see the jobs as being done for that evil thing which takes their tax dollars, the government, so they don't care if the project is done well! It's part of the problem we have with right-wingers consistently demonizing and dehumanizing government.

As a military man, you should be outraged at the very idea of more privatization! Under that ideologue, W, many military assignments were privatized. The largest share of these privatized duties were performed by employees of Halliburton. The cost in our tax dollars was between double and triple what the cost would have been if the duties had been performed by the government's military personnel!

People are people. Nothing miraculous happens when these people are employed by a private corporation that causes them to perform better than they would if employed directly by a government agency. And, since government does not have to make a profit, many government services are done both at a lower cost to taxpayers, and with better use of the tax dollars spent than if these services were performed by a for-profit, private sector corporation!

Your point is undermined by your example.

Halliburton never assumed any military operations.

Now there were private security firms who were contracted to conduct some security over our diplomatic allies but that is neither uncommon nor a military operation. Those operations were protection missions over individuals and nonmilitary essential assets. Now do you feel it's the job of the military to provide the personal protection of a corporate leader? Or an Iraqi diplomat? Or a Halliburton convoy that is not doing a military support function?

Your lack of understanding over these issues displays who your point is not valid.

Now on bridges and roads, once again, it is the responsibility to provide adequate oversight. When that fails is when privatization will and does fail. But this failure is again on the government because you can delegate authority but not responsibility.

MikeyA

C'mon, Mikey. Halliburton was proud of their role in Iraq. It greatly helped their "bottom line!"
Are you really stating that traditionally the U.S. military has never provided security when corporate services for which the government contracts are being done by private sector companies? If you are, that's news to me. How much of such "security" was provided by private companies in World War II? How about in Viet Nam?
There was a conscious choice made here. And it cost those of us who pay taxes billions of extra dollars! This was an initiative by Bush #43's administration. And Halliburton, along with other companies, benefitted greatly. That's an indisputable fact!
As far as your example of oversight, you have a point, but only up to a point. If the government is to hire enough people with enough expertise to oversee all of these operations, where are the savings? I thought that one idea of privatization was that the private sector would do the duties so well, that the government can sign an agreement and get excellent service and/or products WITHOUT having to have long lists of regulations and/or masses of experts to provide oversight. Am I wrong in this?
The bottom line is that you, Mikey, are so tied into your ideology which preaches the nonsensical mantra that everything that is run efficiently is run by the private sector and everything that is run ineffectively is run (or overseen) by government. POPPYCOCK! People work for government. People work in the private sector. People screw up. If we want better service, we pay people more to provide it. If we want anything done "on the cheap," we get the comparable service, whether that service is provided by the private sector or the public sector.

I have never stated that private companies are alway more efficient. They are alway cheaper.

Even in areas like mail where the price is heavily subsidized the overall cost to the taxpayer is more than it would be if DHL, FedEx, or UPS were contacted. It does not mean it will be more efficient but since contracts are awarded to the lowest buffed efficiency is in the best interest of the contractor.

MikeyA

If efficiency is not the goal, something is very, very wrong.

I recently had plumbing work done, and a clothes dryer repaired. I hired repair people from two small, local companies. They did the work efficiently and at a reasonable cost. I did NOT search around for the "cheapest" repair people, because I wanted the work done correctly. We have used the plumbing company before. We knew what to expect. We found the appliance repair person from Angie's List. We would recommend him to others.

Efficiency usually translates into lower costs long term. Short term "cheap" often turns into long term "expensive." I want efficient government. Don't you, Mikey?

Under the table deals and kickbacks.

Your right. Government corruption is a problem which is why control needs to be decentralized and privatization is the first step.

MikeyA

I think the comments have strayed from the focus of why privatization is the cost-effective way to run a government.

Millions of dollars are spent by the City government being involved with the human resources of employing thousands of employees (payroll, hiring, health benefits, etc.). This doesn't even take into consideration the retirement system costs outlined in my post.

If you want proof that a City can't sustain the exorbitant costs of maintaining a workforce, just look at Detroit. The major part of its debt was related to the pension and benefits of current and retired employees.

Whether it's the city or a private company doing the work, the money still ultimately comes from the taxpayers. Wouldn't the cost of keeping a work force just get passed back to the taxpayer even if we did privatize? At least with the city, a profit margin does not have to be met.

The analogy would be this--when you buy a burger at McDonald's you could say that you're shouldering the cost of McDonald's work force--but only a portion of it.

Likewise, if the City isn't the employer of the person who drives the plow (not having to pay for worker's comp, unemployment insurance, health care, retirement benefits, etc.) they would have to pay for a comparatively minute portion of that employee's costs. If the company who employs that plow driver has contracts with and income from other customers, then the employment costs are spread over several entities--not just the city.

Businesses are not in business to do charitable work for ANYONE, not to mention any government that you and your fellow travelers label as something horrific, only to be exploited. They don't care about "employee costs spread over several entities." They seek to earn a profit on every single contract. They carefully calculate the FULL COST of providing said service, then, and only then, submit a bid to get that contract. Every single employee they hire for every single contract they hold has a cost: salary. retirement, health care, capital equipment and tools needed to do the job, etc. They don't seek a new contract with a government entity with the goal of hiring the employees necessary at costs, "spread over several entities."

Learn something about business, SP. Then get back to me on this issue.

Perhaps you could give us an example of a company that sustains itself with one local government contract.

Name me a business that comes into being by getting a govenrment contract as its first job ever, with no other business experience. Name me one business who applies for a government contract and declares that they are bidding below the actual cost because they can "spread around" peronnel costs among their other employees.
Just shows how little you know about business, and about how private companies are chosen for a government contract.

Well, well, well. There is no more doubt that the Holiday Season is in full swing!

My MBA professors would be greatly offended by your implication that I know little about business. Assuming that you know more than they do, I'm sure they would defer to you.

Here is an example of the benefits of privatization. The City of Toledo hired Republic Services as its trash collection company. Last year it cost $9.4 million.

The last year that City employees did the garbage collection it cost $16.5 million.

Facts are difficult to argue with.

http://www.toledoblade.com/local/2014/09/29/Mayor-eyes-return-to-trash-p...

Most of the savings were NOT from what your statement claimed. You claimed the savings would accrue from savings per employee. What Republic did, was to automate the process greatly, and CUT BACK on the total number of personnel. That DOES save money.
There are several problems with this. First, it required the CITY to make capital purchases. Second, the same could have been negotiated with the city employees, with comparable savings. Third, the only way to replicate the savings in other departments is to cut back significantly on the numbers of employees. Can Toledo really afford to have less police officers? Less fire fighters? Less people fixing potholes? Less people in the water treatment plant? Less people overseeing contracted city services? Need I go on?

I'm glad you took business classes. Good for you! I won't pretend to know MORE than did your college instructors, but I did actually help to run a business for 15 years. And I took economics classes both as an undergraduate and in graduate school. And you still haven't indicated when you actually ran a business, and actually dealt with the costs of doing business in real life, not in a classroom exercise.

When one is exposed to information, one often picks and chooses what one absorbs in order to reinforce one's own beliefs. My guess is, that is exactly what you did. Remember, "I little knowledge is a dangerous thing." Careful, SB!!

Plus, each employee must work an 8 hour day to get paid for 8 hours. And, before you state that it's because the city's workers are in those rotten unions, the waste management company's employees are also members of the Teamsters union, as were the workers when they were city employees. Dozens are the exact, same employees, BTW.
SSOOO...YES! The city COULD have negotiated a better, cost-saving contract with the city employees rather than privatize the service and still saved millions!

Here's a link to an article from 2007 about the steep price paid with your tax dollars and mine to private companies for security services in Iraq, compared to the cost of having soldiers do the duties. This underscores my questioning where all this savings comes from through privatization. And there was both significant fraud and waste associated with the spending of the contracted tax dollars by these private firms as well. There is nothing magic about privatization. People still must do the jobs.
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/30/AR200709...

The costs of having soldiers do the duties is significantly higher which is why we haven't done that since WWII. Notice there have been no aluminum drives in a while haven't you. Such things are to prevent the skyrocketing costs of government without privatization and contracting.

Every example you provide of "waste" from contracting is the failure of government to oversee operations and accountability.

I will give you an example. I was part of a military inspection where we discovered that due to the failure of following regulations just one unit caused over $20 million of waste across a whole base. Our recommendations to correct it were to add 3 military positions that would cost the military $2 million of total support and benefits a year. We are a year and a half later and not one recommendation was made. Now if this were a contracting issue the contract would have a natural expiration date. In that case government inaction would eventually remove the waste in question.

MikeyA

Oh Mikeya, you never cease to amaze. Commodity rationing and scrap drives during WW2 were not conducted because we needed privatization of the military. LOL! In fact, very few things that were collected during such drives ever got used, other than the steel and iron.

http://www.straightdope.com/columns/read/2395/were-wwii-scrap-drives-jus...

basic fact. You're assuming that the privatized employees will have nothing paid for their retirement. Private companies have to pay into Social Security. In order to attract employees, many offer additional retirement plans as well.
In addition, unlike governments, private companies must make profits. Factor THAT in, SP!

Have you ever run a business? Do you really think that businesses do not factor in all costs before they make a proposal for contracting services to any group, whether it is a governmental unit or a private company?

As I have pointed out before, I was is business for 15 years before I entered public sector employment. I also was the treasurer for a statewide union for 6 years concurrent with my full-time teaching. Believe me. I know about the costs of doing business!

I think it's time the Blade ran another series of articles, with pictures, of the city workers loafing all day, like was SOP in the 80s'. Pics of them playing basketball, skipping rope, workers spending ALL DAY profiling around town, shopping, visiting friends, and driving their vehicles 5-10 mph to run out the clock.. IMHO, a perfect example of theft.

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