Breakneck Outsourcing of City Services

You have a water problem. Your bill is absurdly high, there’s a water main break in front of your house, or you receive a notice that the city is shutting off your water, even though you’re sure you’ve paid the bill. It’s time to call the Public Utilities‘ customer service — the folks charged with fixing it.

Wouldn’t you want the person who answers that call to be based in San Diego? Wouldn’t you want them to have an office you can go to if you’re not getting the answers you desire over the phone? Wouldn’t you like them to know which water main you’re connected to when you tell them where you live, and know how to pronounce the name of your street?

On Wednesday morning at 9 a.m., the San Diego City Council Rules Committee will debate a proposal to bid out the Customer Support Office, a major section of the Customer Support Division at the Public Utilities Department. This action could outsource these calls to a private company in another state, time zone or country. The committee will also be considering a proposal to outsource the city’s street sweeping operations. The members of the Rules Committee should vote against both proposals.

Where these experiments have been tried elsewhere, they have backfired. The town of Cave Creek, Arizona, tried contracting out the management of its water utility, including customer service, to the private firm American Water in 2007. “Somebody in some remote state would answer the phone and wouldn’t know what was going on in Cave Creek,” the utility manager was quoted as saying in council minutes. The town voted to take back control of its water services in 2008.

Unfortunately, the Rules Committee and stakeholders haven’t had time to examine case studies like these, and San Diegans will be afforded virtually no opportunity to weigh in with the council before it makes a decision.

Apparently intent on leaving a legacy of managed competition at any cost, the mayor’s office has plunged the city into processes to simultaneously outsource street-sweeping, Public Utilities’ customer service, the city’s fleet maintenance, publishing services and operations at the Miramar Landfill. These processes are moving at a breakneck pace, leaving stakeholders from the environmental, consumer and taxpayer communities with no time to analyze the proposals and provide critically important feedback.

Rushing through this process could have serious impacts on the city’s quality of life. The customer service department of Public Utilities not only decides whether and when to shut off or turn on household water service, but also handles sensitive personal information in residents’ water bills, responds to emergency water repair requests, and provides information to customers on how to conserve water in their homes. The street sweeping division ensures that the city is in compliance with state and federal standards for storm water runoff.

If the contracts signed with private operators are not precisely worded and comprehensive, the city could see poor quality service and may have to revise the contract — assuming it has not inadvertently contracted away its ability to do so. Any changes it could negotiate would increase the cost of the contract. In other words, if we screw up now, we’ll be paying later.

Even the base cost to the city of outsourcing these services is a mystery. In rushing this process, the mayor’s office has failed to present the council with an accurate cost assessment — for example, none of the estimates have included how much it will cost the city to negotiate and manage the contracts. In other cities, these costs have been as much as 25 percent of the value of the contract.

We’ve all heard the adage that haste makes waste. Council members Young, Faulconer, Lightner, Gloria and Emerald would do well to take it to heart on Wednesday and vote against the proposals. Our elected officials have a fiduciary responsibility to thoroughly review the options, receive public input, and make the best choices for the city; none of those are possible under the current timeline. As we debate the fate of our public services, let’s ensure that the process is public, too.

Elanor Starmer is Western Region Director of Food & Water Watch. Pamela Epstein is Staff Attorney at Sierra Club, San Diego Chapter.