As a result of rising costs of providing public services, cutbacks in state and federal funding, and the recession-induced fall in tax revenues, local governments across the country are having to rethink the way they deliver services. The ultimate challenge facing city managers is to reduce spending while maintaining a high quality of service.
Increasingly, to meet this challenge, city managers have found it advantageous to use private sector resources in the provision of public services. Today, state and local governments are applying the concept of privatization not only to the provision of public services, but to the design, building, ownership, financing, and operation of public facilities. David Seader of the International City Management Association (ICMA) has pointed out the important benefits communities are able to secure with this approach:
Privatization opens up a realm of resources for use in cities. It creates an infusion of capital from the private sector and makes available private sector flexibility, innovation, efficiency in management, and a controlling mechanism that is very powerful in this country-the profit motive.
By taking advantage of private sector resources and the profit motive, city and state officials are able to ensure that public services like garbage collection, street sweeping, and building maintenance are provided at a high quality and low cost, and be in a position to have new wastewater treatment plants, prisons, and tollways built and operated cost effectively.
This report looks at the experience of fire protection privatization. The report uses two basic methods to accomplish this task. The first is to examine case studies to see how private fire protection services are provided in different contexts-subscription, special districts, municipal contract, and industrial-and why they are successful. This examination will include a look at how one private company provides fire services to half the population of Denmark, while simultaneously providing a number of other emergency services.
The second method is to look at empirical studies which evaluate the comparative performance of private-sector and public-sector fire services. The chief study examined is the University City Science Center’s 1989 analysis of the privately operated Scottsdale (Arizona) Fire Department. This comprehensive study compares private- and public-sector performance in terms of cost and quality, and discusses how private-sector fire companies achieve cost savings.
By providing a clear understanding of how private fire companies operate, where they tend to operate successfully, and how they achieve cost savings, this report should aid those communities considering initiating paid-fire services or updating their present services.