San Diego Pols Still Ignoring Voters’ Managed Competition Mandate

As San Diego City Councilman Carl DeMaio writes in yesterday’s San Diego Daily Transcript, it’s been 1,000 days since city voters approved a ballot proposition directing city officials to adopt a managed competition program, allowing the city to save money by allowing public employees to bid against private companies for contracts to provide city services. At the end of the day it doesn’t really matter who wins the bid—taxpayers win either way, as the competitive nature of the procurement works to drive down costs.

The results in San Diego thus far? Well…nada. As DeMaio writes, the process is bogged down in labor negotiations and politics and hasn’t gotten off the ground. He offers some good examples of no-brainer areas that are ripe for competition:

If Managed Competitions were implemented, the city of San Diego could go through city departments and compare their functions with services offered by businesses listed in the Yellow Pages. When a function can be bid with the outside market, there is a potential for taxpayers to save substantial money.

For example, the city maintains a print shop that manages all printing done by city departments. They set a rate and city departments must pay it. There is no second opinion or a competitive bid. As a result, the city print shop has run a deficit in each of the last five years.

Auto maintenance is another example of where a managed competition could save taxpayer dollars. The city of San Diego currently has more than 250 employees working on auto maintenance. These employees change oil, rotate tires and fix engines. In 2004 we calculated the cost of auto maintenance in the city’s police department at a surprising $8,848 per vehicle per year — not including gas and the cost of purchasing these vehicles.

Read the whole thing. For some good places to start, city leaders should see Reason Foundation’s 2007 study on managed competition opportunities in San Diego (produced in partnership with the San Diego Institute for Policy Research), which outlined 11 areas of city government ripe for managed competition, including: copying and printing, vehicle maintenance, golf courses, libraries, permit processing, waste services, water and wastewater operations, information technology services, facility maintenance, street maintenance, and parks & recreation.

In the article, DeMaio proposes that the San Diego leaders commit to subject at least 10 percent of the city budget to managed competition over the next year. This sounds like an acceptable place to start to me, given that voters already told politicians to get this done a long time ago. As DeMaio writes:

You may have heard this well-known phrase before: justice delayed is justice denied. In this case, after more than 1,000 days, democracy delayed is democracy denied. It’s time that city politicians implement Proposition C to respect the will of the people and save millions in taxpayer funds.

It says something about the nature of the public spending addiction that policymakers can’t even manage to break the grip of labor and politics and start applying competition to reduce spending in a fiscal crisis—even when there’s been a clear and direct mandate of the voters to do so.

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Leonard Gilroy is Senior Managing Director of the Pension Integrity Project at Reason Foundation, a nonprofit think tank advancing free minds and free markets. The Pension Integrity Project assists policymakers and other stakeholders in designing, analyzing and implementing public sector pension reforms.

The project aims to promote solvent, sustainable retirement systems that provide retirement security for government workers while reducing taxpayer and pension system exposure to financial risk and reducing long-term costs for employers/taxpayers and employees. The project team provides education, reform policy options, and actuarial analysis for policymakers and stakeholders to help them design reform proposals that are practical and viable.

In 2016 and 2017, Reason's Pension Integrity Project helped design, negotiate and draft pension reforms for the state of Arizona's Public Safety Personnel Retirement System and Corrections Officer Retirement Plan, which both passed with overwhelming bipartisan support in the state legislature and were signed into law by Gov. Doug Ducey.

Gilroy is also the Director of Government Reform at Reason Foundation, researching privatization, public-private partnerships, infrastructure and urban policy issues.

Gilroy has a diversified background in policy research and implementation, with particular emphases on competition, government efficiency, transparency, accountability, and government performance. Gilroy has worked closely with legislators and elected officials in Texas, Arizona, Louisiana, New Jersey, Utah, Virginia, California and several other states and local governments in efforts to design and implement market-based policy approaches, improve government performance, enhance accountability in government programs, and reduce government spending.

In 2010 and 2011, Gilroy served as a gubernatorial appointee to the Arizona Commission on Privatization and Efficiency, and in 2010 he served as an advisor to the New Jersey Privatization Task Force, created by Gov. Chris Christie.

Gilroy is the editor of the widely-read Annual Privatization Report, which examines trends and chronicles the experiences of local, state, and federal governments in bringing competition to public services. Gilroy also edits Reason's Innovators in Action interview series, which profiles public sector innovators in their own words, including former U.S. Transportation Secretary Mary Peters, former Florida Gov. Jeb Bush, former Indiana Gov. Mitch Daniels, former New York City Mayor Rudy Guiliani and more.

Gilroy's articles have been featured in such leading publications as The Wall Street Journal, Los Angeles Times, New York Post, The Weekly Standard, Washington Times, Houston Chronicle, Atlanta Journal-Constitution, Arizona Republic, San Francisco Examiner, San Diego Union-Tribune, Philadelphia Inquirer, Sacramento Bee and The Salt Lake Tribune. He has also appeared on CNN, Fox News Channel, Fox Business, CNBC, National Public Radio and other media outlets.

Prior to joining Reason, Gilroy was a senior planner at a Louisiana-based urban planning consulting firm. He also worked as a research assistant at the Virginia Center for Coal and Energy Research at Virginia Tech. Gilroy earned a B.A. and M.A. in Urban and Regional Planning from Virginia Tech.