76-19-B5
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Government Can Cost Less II[edit]
Transcript[edit]On the last broadcast, I told of how Scottsdale, Arizona and a dozen other cities in our land were hiring a private, profit-making company to provide fire protection with no loss of quality and great savings to the taxpayers. Since fire departments are so universally thought of as one of those things only government can do, I got curious about other governmental functions and whether some of them might lend themselves to the Scottsdale pattern. The answer is (and I'll admit I was surprised), "yes". Rochester, New York began increasing its contracting out of government chores in 1974 and has reduced the number of city employees by 12%. Private firms take care of some of the street and all the building maintenance and operate all but one of the city parking garages. Vehicle repair and gravedigging are contracted out. The city manager considers all of this as still experimental but is going ahead with a plan to have private garbage collection in one part of the city. He's interested in the competitive feature and what it might do to perk up the city run departments. Other cities have been even more extensive in their contracting and at it longer. Twice as many cities use private firms for garbage collection rather than city refuse departments and a survey has found that, on the average, the cost for government garbage collection is 68% higher than when it's done by a private, profit-making concern. Among the better known cities who are moving to private contracting are New Orleans; Charleston, South Carolina; Dallas; Portland, Oregon and Omaha, Nebraska. Just about every public service is being provided somewhere by private contractors at considerable savings to the taxpayers. In Houston, Texas, instead of using highly trained policemen for routine protective duties, private security guards are employed to guard municipal court buildings and even the City Hall, freeing the police for crime fighting duties. San Francisco has contracted a number of parks and recreational facilities out to private operators and is now making a profit on these facilities instead of showing a loss to the taxpayers. Another California city is saving 20% through private management of a municipal golf course. More and more school cafeterias are being operated by private contractors -- even one by a hamburger chain and they have turned money losers into profitable operations. At another level of government, Orange County in California is contracting out its data processing for seven years at a price of $26 million. The county is getting better service and expects to save $11 million. One of the best incidents has to do with Minnesota's Hennepin County. County staff had proposed construction of a major food service plant as part of its new medical center. Then someone asked a simple question; "What does a county government know about preparing 3½ million meals a year?" I doubt anyone even tried to answer that question. There must have been an instant realization that food purchasing, storage, preparation and serving on such an institutional scale is a pretty complicated business for beginners. At the same time, there was recognition that a number of private firms have been in that line of business for quite a while. Hennepin County contracted with a private concern, set standards of performance, quality and cost and estimates it saves about $1 million a year. It's something worth looking at in everyone's hometown. And think what might happen if the idea reached Washington. This is Ronald Reagan. Thanks for listening. |
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