Bing Leading the Dialogue on Privatization in Detroit

The Detroit News reports Detroit Mayor Dave Bing is “seriously considering privatizing garbage collection to improve collections and save cash.” Mayor Bing’s proposal could save taxpayers nearly $14 million a year, money the city desperately needs to provide core government functions as tax revenue continues to fall. Detroit Chief Operating Officer Chris Brown explains the move saying:

I don’t think we have a view as to whether sanitation should be run by union or nonunion. What we have a view on is how we get the most efficient use of our dollars as a consumer.

If you have a density problem and a garbage truck is only picking up one or two [garbage cans] per block, you’re thinking to yourself how to optimize that. You’re trying to figure out how to get more density in certain areas and how do you serve people better at a lower cost. That’s what we’re after [emphasis added].

According to The Detroit News, there is a wide range of issues affecting the city’s sanitation department, for example:

  • Population decline has led to inefficient collection routes;
  • Garbage tonnage has fallen by 13 percent over the last year and 38 percent over the last five years;
  • Dozens of trucks are out of commission at any time; and
  • Homeowners’ pickup fees are not collected in as many as 30 percent of homes, costing millions of dollars.

Detroit is among many American cities struggling to balance their budgets, and privatization provides a compelling alternative to service cuts. Earlier this week I wrote how Memphis is considering a similar proposal to privatize sanitation services in a move expected to save taxpayers over $25 million (for more see here.) Sanitation services have been successfully privatized many times in cities across the country. Over one third of all U.S. metropolitan areas rely on privately-operated sanitation services that-through competitive private sector delivery-generate cost savings from 20 to 40 percent over traditional public provision.

Elsewhere in Detroit, Bing renewed calls to privatize the city’s lighting department after repeated power failures affect the city (including City Hall.) Bing explains in an interview with WJR-AM:

Ever since I’ve been in office, I’ve felt that’s a business we ought not be in. Not because we don’t have good people, but because we don’t have the money to invest and upgrade the technology of the system [emphasis added].

Privatization of lighting services would allow private companies to provide expertise and capital to modernize lighting infrastructure and dramatically improve the quality of service delivery; two things the city simply cannot afford to do on its own.

For more ways to streamline government and achieve cost savings in public service delivery see Reason Foundation’s Privatizing “Yellow Pages” Government and Annual Privatization Report 2010: Local Government Privatization.