Democratic Candidates agree: Significant savings and efficiencies could have been achieved without managed competition, and San Diego might have been better off.
By SDFP Staff
Earlier this month we published an eight part virtual mayoral forum, and invited each of the mayoral candidates to answer one question each day with the promise of no editorial intervention on our part. You can view that series by going to our 2013 special election coverage, here.
Now that the three major Democratic candidates have answered (Kevin Faulconer didn’t reply), we thought it might be useful to examine their answers and share our analyses. So over the coming days we’ll be covering one question at a time, comparing their answers with some of editor’s visions about what’s best for San Diego.
Part 1: Managed Competition
Here’s our preface, along with the question as asked:
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?
For many involved in city government, managed competition was viewed as a panacea to cull waste and fraud from city expenditures, particularly in the form of city workers. The theory clearly was that private companies could do the job better and cheaper than the public agencies currently in charge of the designated tasks.
Once managed competition was finally implemented in 2010, city services began to go out to bid. In each case, the city agency won the bidding war with private contractors….in most cases by a wide margin. What we found, though, was that the system was not only very costly, but deeply flawed.
The three mayoral candidates who responded to the SDFP’s candidate questionnaire largely agreed that better results could have been achieved by focusing more on management and management policies. Managed competition, agreed Mike Aguirre, David Alvarez, and Nathan Fletcher, was unnecessary in order to achieve greater savings and eliminate inefficiencies in city civil service departments. “It appears from the competitions completed to date that what the city needed to cut costs wasn’t managed competition, but leadership,” wrote Mr. Fletcher. This appears to be the consensus.
But Mr. Aguirre takes it a step further. Managed competition is here to stay, at least for the foreseeable future, and since it isn’t going anywhere, the City needs to find a way to make it work better. The bidding process, argues Aguirre, needs to be more inclusive; a joint effort between management and employees. This, he says, would have ensured a more accurate bid that would have been more likely to meet the demands of the city.
Instead, says Mr. Alvarez, what we have is a managed competition process where contracts are locked in for a period of several years that are difficult to fix when flaws are identified. “If the City cannot adequately define and project needed service levels, then managed competition will be a flawed and risky process,” he wrote. That is certainly what happened in the case of the vehicle fleet services department. “It would be a mistake to base the City of San Diego’s entire management strategy on managed competition alone.” Again, this seems to be the consensus of the three major responders.
Although Kevin Faulconer did not respond to our questionnaire, it is rather easy to deduce what his likely position would have been. He does not see the managed competition process as flawed in any way, and has been a robust proponent even to this day. He has made statements to the effect that he believes it vital to the City of San Diego to continue with managed competition, and views the cost savings achieved through the process as well worth the risks.
In short, the three Democratic candidates agree that (perhaps in hindsight in some cases) managed competition was completely unnecessary in order to achieve significant savings on city services, and that tighter management guidelines and stronger leadership would have not only brought about greater efficiencies and savings, but would have avoided the huge costs associated with the bidding process itself. We agree. Kevin Faulconer is the only candidate likely to have dissented.
As for candidate Hud Collins…..well, we’ll just let his response speak for itself.
IBA’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.
Dana Levy says
Thank you. Well reasoned, fair, and comprehensive. I still maintain that the employees of the CITY must be service oriented and not merely profit motivated to carry out the work needed by the citizenry to enjoy a wholesome and comfortable life. Thus it is counterproductive to have a “managed” competition system. The fact that the city workers are employees necessitates that they be given the opportunity to have a long and prosperous career, not just a job, and that it has some sort of reasonable achievable retirement at the end whether a pension or 401K plan is implemented. The issue of a livable wage does take center stage and we need to at all costs avoid a race to the bottom where the entire system will be in jeopardy making our fair city the ultimate loser in the process. Accountability and a public input process are the key and oversight of the management of all city functions needs increased scrutiny. Let’s hope and vote to be sure that brother Kevin remains only a lame duck in the city’s, county’s, or state’s future. Can’t wait until tomorrows analysis comes out.