• 100% Contract cities
• Animal control
• Groundskeeping /Landscaping
• Trash collection/ Recycling
Municipalities have historically provided a myriad of basic services, from waste and sanitation services to street repair to the maintenance of parks and libraries. These services are vital to the health of a community. Since the 1980s, the privatization or contracting out of public municipal services has gained popularity. Many cities experiencing budget crises look to the private sector to take over public services, theoretically a lower cost.
However, privatization often does not solve cities’ budget woes. Research shows that when municipal services are contracted out, costs can actually increase while service quality suffers. Sometimes these cost increases are experienced as contract cost overruns. Other times a city may fail to take into account “hidden costs” such as the administrative costs of seeking proposals, evaluating bids and monitoring the work. Hidden costs for the community can include reductions in wages and health benefits under private contractors, which drive more people onto public assistance and bring down wage and benefit standards in the field and in the community.
Furthermore, when essential public services are privatized, many communities complain of inferior service quality. The companies that provide these services must make a profit, so cutting corners on the quality of a service is a common way for the company to lower its own costs and retain more revenue. As the experiences from communities around the country show, privatization of municipal services has risks that require very careful consideration.
Recent reports of interest:
Muncipal Services Backgrounder Brief
In The Public Interest, 2011
Keeping Public Libraries Public: A Checklist for Communities Considering Privatization of Public Libraries
ALA Committee on Library Advocacy's Task Force on Privatization, 2011
IUOE Local 39 Letter to Fresno City Council
IUOE Stationary Engineers, Local 39, 2010
For additional reports, please see the research section on the side bar or visit our research library.
By Clare Crawford, Center on Policy Initiatives
Four times, the city of San Diego has pitted city workers against private companies in a competition for the continued responsibility to provide an essential city service. All four times, the city workers have proved that they as U-T San Diego put it last week provide taxpayers with the best bang for their buck.
The evidence is in. Given the chance, city staff can figure out how to do their work at a lower cost than private, for-profit companies can.Read more »
By Celeste Meiffren April 27, 2012
A few days ago, the City Council passed an ordinance to establish the Chicago Infrastructure Trust - a nonprofit that will leverage private, for-profit investment for public infrastructure projects. Much of the recent attention has been on the lack of strong public protections to make the trust transparent and accountable to citizens. But there is a more fundamental question: Do we really need it?Read more »