☆ Mark Moses on privatizing gone wrong, and how to save money on public safety (2/3)
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It’s not enough for cities just to privatize their way out of a budget crunch, says Mark Moses, author of The Municipal Financial Crisis. Often “privatization in name only” undercuts any chance for market efficiencies, because heavy regulations persist. And when it comes to public safety, he argues that smarter staffing choices could yield huge savings. An Opp Now exclusive Q&A.
Opportunity Now: You suggested that cities should get out of the way of recreation services. What other services should cities let go of?
Mark Moses: Well, on the wastewater side, it's 99% public agencies running those services. So where's the innovation going to come from? Especially when those agencies, if they're cities—and a lot of them are—are competing with police, fire, public works, and the exciting project of the day for city council attention, just to get their work done.
ON: But haven’t some cities had to privatize services to shore up their budgets?
MM: Often what happens is what I call privatization in name only. One mistake that’s made in a panic—privatizing this, privatizing that—is just contracting out a narrow portion of the activity where the city still maintains responsibility for it. The city winds up doing a disservice to any of the potential efficiencies it can get from privatization, because such cities now will push through their wage structure or their employment structure or their purchasing structure. And they’ll pre-qualify these private companies, but they expect them to behave just like the city behaves.
ON: Are you saying the city’s approach to privatization—or even how it manages its own services—is actually part of the problem?
MM: Yes, and in large cities where spending is more political, including San Jose, even funding reserves become a political issue. From the union’s perspective, if there’s any money in the bank, that money’s fair game for spending on contracts.
Even under a budget crunch, you get this false dichotomy between people and things, right? If a city needs to lay off staff, that’s anti-people. Well, guess what? Those potholes affect people and their auto repair bills. So it winds up being this narrow focus and, under such political pressure, the only people the city focuses on are the people internal to the organization.
ON: At the cost of repairing potholes?
MM: Does the city organization exist for the residents and businesses, or do the residents and businesses exist for the sake of the city? Because as soon as the paradigm becomes, well, we just have to raise taxes so the city can keep operating, now it’s the residents and businesses that are the fodder for the city’s survival. And you’ve got the relationship completely turned around.
ON: But the city does need to fund public safety, which is a core service to protect the rights of residents. When it comes to fire departments, is there any room for cost cutting without jeopardizing the safety of the community?
MM: Fire departments have minimum staffing provisions that force them to operate with a fixed number of employees for all shifts—really, it winds up being maximum staffing—because they’re staffing for the peak, 24/7, 365.
In other words, a fire department is staffed for the worst-case scenario at the worst time of day, so it can meet response times. But there’s no reason you need to staff every fire station that way all the time. For example, during the pandemic, there were no commutes—traffic was minimal. Yet all the fire stations stayed fully staffed, even the ones that were built specifically to cover peak response times during heavy traffic. Those stations should’ve been scaled back, but minimum staffing rules didn’t allow for it. And that's a huge cost driver because maintaining minimum fire staffing requires significant overtime.
ON: With crime going up, how is it possible to save money on police?
MM: It’s about what you're paying people to do. Too often, the only measure of public safety success is how many sworn officers you have. But those officers are incredibly expensive, and they don’t need to do everything. For instance, you could hire community service officers (or CSOs) for a fraction of the cost.
CSOs don’t need SWAT training or advanced equipment, but they can take reports, follow up on issues, and handle non-emergency calls. These are things that don’t require a full-blown, expensive police officer. You can employ two CSOs for the cost of one sworn officer, and save money while improving service delivery.
Mark Moses, senior fellow at California Policy Center, is author of The Municipal Financial Crisis.
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