Competition for county work worth a look?

By Joe Schoenmann

Wednesday, Nov. 4, 2009 | 2 a.m.

State lawmakers raided Clark County coffers this year because they believed the county had more money than it really needed.

That belief was fueled by the relatively high pay enjoyed by the county’s 10,000-plus unionized employees — and the various raises those employees were lined up for at a time when private industry was laying people off, cutting pay and paring benefits.

The “runaway” costs of unionized employees have municipalities across the nation considering “managed competition,” which forces public employee unions to compete for their public jobs.

The city of San Diego, for example, is trying to follow in the footsteps of San Diego County, which instituted managed competition in the mid-1990s. Today, roughly 20 percent of its $4.1 billion budget is outsourced. That doesn’t mean, though, that public employees are losing out. From 1996 to 2006, 13 of 17 competitions for public work were awarded to county work crews.

Nevada’s year-old Spending and Government Efficiency Commission likes the managed competition concept, too. Commission member Carole Vilardo, lobbyist for the Nevada Taxpayers Association, said managed competition, or outsourcing with the added proviso that public employees could bid for jobs against private industry, has arisen from the question: What’s the motivation for government to do better?

“Motivation comes from a bit more competition,” she said. “Who can perform in the most cost-effective manner? And if it’s a group of public employees, that’s great. If it’s not, then you go outside the public employees.”

Frank Partlow, SAGE commission executive director, said managed competition also forces public employees to figure realistic costs of services, including overhead that wouldn’t normally figure into an agency’s overall expense.

Managed competition has saved Charlotte, N.C., about $10 million since that city started using it in 1994, said David Elmore, Charlotte’s business process improvement manager. Areas that have been outsourced include animal licensing, maintenance of squad car laptops and janitorial and maintenance services.

But on top of the money savings, the process has resulted in immeasurable changes in the work standards of both public employees and private bidders, Elmore said.

“This really isn’t about outsourcing, it’s about trying to make them work more efficiently,” and the long-term savings from that attitude adjustment are almost impossible to calculate, he said.

The process doesn’t always result in the lowest bidder getting the job. “We’re looking for the best solution to a problem, which is performance-based contracting,” he said.

In Charlotte, however, unions aren’t very strong, so managed competition was instituted more easily there than in San Diego, where the City Council’s six Democrats, traditional union supporters, last week voted no and two Republicans voted yes. The city’s mayor is a Republican and is continuing to push for it, bolstered by voters’ approval of the concept three years ago. In Clark County, such a proposition has never gone before voters, the unions are a powerhouse, and all the county commissioners are Democrats.

Even so, five of the seven commissioners said they’d at least be open to considering the idea. The other two, Rory Reid and Larry Brown, could not be reached for comment.

Commissioner Chris Giunchigliani, a pro-labor stalwart, said she wants to know whether county staff can develop guidelines to say when something is eligible to be put out for bid by both private industry and public employees.

Commissioner Lawrence Weekly said he’s open to talking about it but cautioned that simply hiring the lowest bidder is not his aim because “many variables” should go into deciding who wins or loses a job.

Commissioners Tom Collins and Steve Sisolak echoed Weekly’s concern, both noting that they would want companies bidding against county employees to provide comparable health care to their employees, for starters.

Commissioner Susan Brager added that she is “not looking to put people out of work — there’s a very fine line to walk when talking about something like this.”

But on the proverbial level playing field, managed competition “would provide a lot of possibilities and options” for the county, Sisolak noted.

“It’s definitely something to view as a potential county plan. I think it would make us more fiscally prudent and make us realize where we’re out of whack and where we’re doing OK.”