Virtual Mayoral Forum- Part 1: Managed Competition

by on October 24, 2013 · 0 comments

in Economy, Election, History, Ocean Beach, Politics, San Diego

Managed Competition GraphicEditor: The following is the first part in a series being published by our online media partner, San Diego Free Press, as a ‘virtual mayoral forum’.

One of the best ways for voters to learn about candidates is via debates.

Debates, however, have real limitations. The positive aspect of actually being able to see a candidate as a person can be countered by constraints of time and space. Sometimes its hard to follow what’s being said, especially if things get heated and candidates start talking across each other.

So we came up with the concept of presenting a virtual debate; an event where the only opinions will be the ones proffered by the candidates. And we tried to come up with questions that were not trite or unnecessarily open ended. (If you’re looking questions about the Chargers, go to any one of the other debates.)

At our September contributors meeting eighteen (or so) of us shared ideas on just what we wanted to ask. Copious notes were taken and eventually we came with what seemed to be a reasonable list.

It all sounded lovely on paper.

We created questionnaires and emailed them out to the addresses listed with the City Clerk’s office as contact points. Of course we didn’t include some questions that should have been asked; the city’s information technology issues and mention of the taxi drivers are but two things that come to mind.

We knew most of the minor candidates wouldn’t respond. What we didn’t count on were two of the big names (Fletcher & Faulconer) refusing to participate. We can only assume–and, believe me we’ve tried to get them involved– their non-response sends a message about their openness to the citizens in this city. You can decide what that message is. (We’ll still be glad to add responses and delete this paragraph. It’s not too late!)

Starting today we’re publishing responses to our eight topics at a rate of one per day (M-F). Readers get to see the candidates’ answers side by side in their own words. They can say as much or as little as they want, because there’s no stopwatch in play here.

The complete questionnaire can be found here.

Our first topic is managed competition. SDFP editor Andy Cohen put together an introduction to the issue.

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abc_direct_mailOn November 7, 2006, the voters of San Diego approved Prop C, allowing the City of San Diego the ability to contract city services—with the exception of police and fire—out to private contractors.

The vote wasn’t close. Prop C passed with over 60% approval. For the first time in the city’s history, services that had been performed by public employees—perhaps entire city departments—could potentially be privatized if the City Manager (now the Mayor) determined that “subject to City Council approval, City services can be provided more economically and efficiently by an independent contractor than by persons employed in Classified Service while maintaining service quality and protecting the public interest.”

It was billed by proponents as a way for the city government to save millions of dollars annually by eliminating inefficient public workers.

While the change to the City Charter was brought about as an attempt to privatize city government services, the law also allowed city agencies to submit bids in competition with their private competitors. After four years of tug-o-war with labor unions, in July, 2010 the City finally published its “Managed Competition Guide,” setting the guidelines for the bidding process on city services.

Only bids submitted by outside contractors that achieve at least a 10% savings over city agency bids would be accepted.

The City put several services out to bid, including the in-house print shop, vehicle fleet services, the Miramar Landfill, street sweeping, and street and sidewalk maintenance, with the public agencies winning all four bids at significant savings for the City.

However, as reported in a September 25, 2013 investigation in San Diego City Beat, the winning bids, while saving tens of millions of dollars, are likely not sustainable, and have demonstrated numerous inadequacies in the results brought about by managed competition.

City agencies, while significantly underbidding their private sector competitors, have been forced into substantial staffing cuts, and in the case of the city’s vehicle fleet maintenance division, are struggling to keep up with the workload due to a high demand and a shortage of manpower. In fact, the City Beat investigation found that the department could have submitted a bid that was 20 percent higher and still won the contract comfortably.

A report issued by the office of the City’s Chief Operating Officer questioned whether the savings achieved were the result of greater efficiencies or the result of reductions in the quality of the services provided, and offered some suggestions to improve the system.

The SDFP asked each mayoral candidate for their thoughts on managed competition and the report’s findings.

______________________________

Here’s the question as it appeared on the questionnaire, along with the candidate’s verbatum responses:

1. Impact of Managed Competition

Independent Budget Analyst Andrea Tevlin recently questioned the sustainability of service levels in those city departments which successfully won contracts in the managed competition process. Three of these departments underbid the private sector bid by 28% (landfill) to 194% (Street and Sidewalk Maintenance). Source: CityBeat San Diego’s managed competition under fire 9/25/13

What is your response to the analyst’s assessment and those statistics?

Mike Aguirre___________________________

SDFP Aguirre  LogoIn discussions with City workers forced into participating in “managed competition” to keep their jobs, City management provides no realistic information about sustainable service levels when preparing a bid. With no clear description of work to be undertaken, methods to be employed or outcomes expected, including quality standards to be achieved, there is no way to provide a legitimate bid.

When AFSCME workers provided their own bid, which included an adequate scope of work from which to provide a realistic and competitive proposal that met the 10% goal, management ignored it and instead imposed it’s own bid that reduced costs to unsustainable levels. The process is being used to cut jobs and reduce budgets in a manner that ensures that City service levels will not meet demand.

If “managed competition” cannot be scrapped in it’s entirety, at least it should be done fairly, which includes, but is not limited to:

• A worker-management team should prepare bids jointly.
• In-house bids should be prepared on the employer’s time with appropriate technical assistance.
• Training should be provided to those submitting bids.
• Contractors should be required to pay fair wages and benefits.
• The private competition should be identified.
• The contracting process should be open to public scrutiny.
• As with public agency bids from private vendors, there should be a right to appeal the award of a bid.
• The bid should be required to include exact services currently provided, methods of providing the services, costs of providing the services, equipment used and the number and qualifications of the staff currently providing the service.
• When possible, workers should be involved in drafting the scope of work to ensure that it accurately reflects the services provided.
• As with public agency bids from private vendors, the requirement to be awarded the bid should not be cost alone, but the “lowest responsible bid” or “lowest acceptable bid,” which includes the total cost proposed to charge for the service, including the cost of administering and monitoring the contract.

David Alvarez__________________________

SDFP Alvarez  LogoI was among the first to raise concerns about defining and setting service levels throughout the managed competition process. When a City service completes the managed competition process, the service levels and definitions are locked for several years. This means that if a mistake was made in setting service levels, it can be difficult to fix.

Many managed competitions were rushed through Council over my objections, and we are only now discovering the extent of the problem. If the City cannot adequately define and project needed service levels, then managed competition will be a flawed and risky process.

I believe there has been too much focus on managed competition, and not enough on competent management. It would be a mistake to base the City of San Diego’s entire management strategy on managed competition alone. Managed competition is a costly process that takes years to complete. As the question indicates, City employees have underbid the private sector on every managed competition so far.

There is no reason why these savings couldn’t have been achieved through the City’s normal budget process without the cost and acrimony of managed competition. The budget process has the added benefits of being much faster and more flexible in response to changing circumstances. As Mayor, I would consult with our City employees and my management team and propose efficiencies as part of every annual budget. Our City can’t afford to wait to innovate.

Hud Collins___________________________

SDFP Collins  LogoIBA’s assessment means nothing!

The only thing that MC does is too [sic] lower services more. Right now the level is 70% of 2001 levels.

 

 

 

Kevin Faulconer________________________

SDFP Faulconer Logo

SDFP Chair

Nathan Fletcher_________________________

SDFP Fletcher Logo

SDFP Chair

Tomorrow’s topic will cover issues arising from the Plaza de Panama controversy earlier in the year. The chair used in place of Faulconer’s and Fletcher’s answers is a replica of the one used by Clint Eastwood at the GOP National Convention in 2012.

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