San Diego Suffers Setback in Privatization Efforts

Just last week I noted how San Diego was struggling to implement its managed competition program. Unfortunately, the city has suffered yet another setback. The California Public Employment Relations Board has ruled that the administration did not bargain in good faith with the city’s unions and did not follow proper impasse procedures in its efforts to implement the program. This, despite the fact that the city had undergone 68 bargaining sessions over the course of 130 days before the city attorney advised the mayor to stop negotiating. As reports,

Specifically, the ruling stated that Sanders must rescind the managed competition guidebook completed in late 2007, which includes the statements of work for individual city services, and start over again at the bargaining table with the unions. The ruling also requires that City Council hold proper impasse hearings on managed competition and on a charter amendment passed in 2006 that requires voters to approve increases in pension benefits.

So, in effect, a state government administrative court has ruled that city employees’ labor unions have veto power over the implementation of a program overwhelmingly approved by voters who felt that the city employees were not providing certain services efficiently enough in the first place. Mayor Jerry Sanders has reportedly decided not to appeal the ruling, although the administration is consulting independent legal counsel. When voters approved the managed competition measure in November 2006, Mayor Sanders predicted that private-sector bidders would be competing to provide city services by the summer of 2007. It is now over a year and nine months later and the city has yet to complete a single competition. The PERB decision is expected to delay implementation of the managed competition program by at least several more months. The city labor unions have been stonewalling the competition process and fighting tooth and nail every step of the way. Apparently, they are terrified of actually having to compete with the private sector to provide city services. That should tell you all you need to know about San Diego’s bloated budget and fiscal problems. For more on San Diego’s managed competition program, see this article (pp. 25-26) from Reason’s Annual Privatization Report 2008 and the study “Streamlining San Diego: Achieving Taxpayer Savings and Government Reforms Through Managed Competition,” published last year by Reason Foundation and the San Diego Institute for Policy Research.