Private Practice 

Could competition for city services save money or the services themselves?


Last week, a South Memphis man, upset that his garbage hadn't been picked up for more than a month, left a union meeting in a huff, yelling "Privatize it!" at the sanitation workers.

It probably wasn't the response local AFSCME reps were hoping for when they organized a meeting of sanitation workers and the public to talk about "the ugly truth of privatization."

"We are all public service workers, and we want to do a good job for tax-paying citizens," said local AFSCME vice president Rodriquez Lobbins. "Privatization is not something you want. Citizens would pay more. Citizens will pay less with public service workers."

In April, Memphis mayor A C Wharton suggested outsourcing sanitation services but allowing current employees to compete for the contracts under an employee-owned business. Union members have argued that the city is not talking about how much privatization will cost in the long run and that it will be difficult to reverse once it's done.

But, trash talk aside, a little friendly competition might not be a bad thing. If it can save money or improve city services — maybe, in some cases, save city services — it's an idea worth exploring.

Former Indianapolis mayor (and newly appointed New York deputy mayor) Stephen Goldsmith has come to town twice in recent months to talk about efficient government.

Though in both instances he spoke to groups related to the consolidation effort — first the metro charter commission, mostly recently a Rebuild Government forum — Goldsmith was elected to a city that was already consolidated.

As mayor, his most publicized achievement was to identify $400 million in savings from the Indianapolis budget, a feat he achieved by creating what he called "competition in lieu of privatization." (For comparison, $400 million is about two-thirds of the Memphis city operating budget.)

Goldsmith spent days working with the unions — literally doing public jobs alongside public workers — before turning to privatization. When the city bid out work, however, it made sure to comparison-shop between the private companies and the public sector.

As often as not, the public sector would find a way to cut costs. Now Goldsmith is headed to New York to see if his strategies and principles are applicable on a larger scale.

"Public employees are not inferior to private employees," Goldsmith said at the Rebuild Government forum last week. "The public system was inferior to the private one. The incentives were different."

It's a lesson that Wharton is obviously pondering.

"I don't think we automatically say we're deadest on outsourcing, that's it, no discussion," Wharton told the council's operating budget committee last week. "We're saying, let's open this up. Here's the savings that ABC company says they can do. Will [city workers] take a look at it?

"It doesn't have to be a zero-sum game. It can be a win-win proposition," he said.

Part of Wharton's budget proposal included a reassessment of all operations as well as a debt-restructuring plan. But Wharton also stressed the importance of economic development to grow the city and its coffers.

"We're never going to be able to tax our way into where we want to be, nor can we cut our way to where we want to be," Wharton said.

In the case of city golf courses — perennially on the chopping block during budget time — outsourcing may be a way to keep those courses open.

Earlier this year, a council committee recommended closing the nine-hole courses in Riverside and Overton parks.

The mayor's recent budget proposal took those closures off the table until August to give the city time to make them profitable, either by increasing fees, selling naming rights, or changing the hours of operation.

"If we cannot make [Riverside and Overton] operate at a break-even level, I'm going to come back to this body and say we've got to close them," Wharton said, "unless this body says we're going to subsidize them."

If none of that works, however, there is the outside management option. Wharton told the budget committee that he has received several solicitations from people wanting to take over the two golf courses.

As for the garbage — still sitting on people's curbs — some citizens wonder if privatization could provide better service.

Samantha Rajapakse is a former member of AFSCME, but she also lives in the same neighborhood as the man who stormed out of the meeting.

"You're asking the citizens to stand up for y'all but if you look from the citizens' standpoint, you have to consider that it's hard to stand up for y'all when your garbage isn't being picked up," Rajapakse said. "I understand that you have a supervisor, but I pay your salary. Bottom line."

Additional reporting by Bianca Phillips.

For more on this and other topics, visit Mary Cashiola's "In the Bluff" blog at

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