City Councilman Kevin Faulconer has long been one of the city’s chief advocates of a voter-approved process to put some city services out for bid.
That hasn’t changed as he campaigns for mayor. Faulconer has repeatedly pointed to managed competition as a way to eke out cash for neighborhood needs even in the wake of two recently unveiled city reports that raise questions about the program’s effectiveness.
“It’s not about cutting. We have five managed competitions that are on the mayor’s desk, that were on the mayor’s desk the day that Jerry Sanders left office that Bob Filner did not move forward with,” Faulconer said at an Oct. 9 mayoral forum. “Ladies and gentleman, if we restart that process, conservatively speaking, there’s $20 million that we can reinvest into our neighborhoods.”
Meanwhile, a city auditor’s report revealed the first city function to go through the process actually increased costs for other city departments despite overall cutbacks that save the city about $1 million annually. City reviewers found the city’s print shop was forced to up its rates by an average of 15 percent in an effort to reconcile a 58 percent drop in ordered copies, design work and other services.
A separate review of the managed competition process conducted under Filner’s watch was even more critical. A draft report written by a former Filner administration official, first obtained by CityBeat, concluded the time and cost associated with implementing the bids – all of which have been won by city staffers – cut into the program’s projected savings and that the process itself had a chilling effect on at least one city department.
The review described a drawn-out process to implement a whittled-down fleet maintenance division as part of managed competition, which inspired many workers to leave their jobs. In the process, the report said, the city was unable to maintain enough reserve fire engines to handle potential wildfires.
Faulconer has not addressed those concerns in debates. Instead, he’s focused on what he dubs a “conservative estimate” of a potential $20 million in savings associated with five managed competition contracts Filner halted.
Other mayoral candidates have remained mostly mum on managed competition.
Their positions on the issue are crucial. The managed competition process voters approved in 2006 simply gives the city the option to allow outside groups to bid on city services. The next mayor will ultimately decide whether to proceed with the program.
Only Faulconer appears certain to do so.
Faulconer told Voice of San Diego Friday that the managed competition process should remain the city’s strongest tool to save cash. But he acknowledged the program could be improved.
“It’s a new program in this city, it’s a change of business as usual for this city,” Faulconer said. “What we cannot do is stop that program. What we should do is to make sure that’s working the best that it can, make any changes that are necessary to make sure it’s implemented, and implemented correctly.”
Faulconer didn’t offer any specifics on necessary changes but said he’d be open to formal talks with city unions to make necessary tweaks to the program.
A Faulconer staffer later revealed the source of the councilman’s $20 million estimated savings claim. The councilman projected the outcome of future competitions by assessing the estimated savings associated with five managed competitions Sanders pushed forward that are now on hold. Faulconer’s staffers compared each corresponding city department’s budget and came up with an average of 18.6 percent savings for past competitions. Faulconer assumed the five on-hold competitions would bring similar savings. The average 18.6 percent savings translates into $26.1 million but Faulconer has opted to use a more conservative $20 million estimate, a spokesman said.
(The potential managed competition functions that remain in queue are public utilities’ customer service, capital improvement program delivery, transportation engineering operations and solid waste collection. Interim mayor Todd Gloria recently halted a storm-water facilities operations and maintenance competition.)
Other mayoral candidates are less convinced managed competition is the best way to accomplish such savings.
Former Assemblyman Nathan Fletcher said Friday he wouldn’t rule out managed competition as an option but views it as a last resort.
“You can achieve savings and efficiencies in a quicker, faster way,” Fletcher said. “I would argue through (better) management we could achieve greater savings at a quicker rate in a much less contentious process.”
Councilman David Alvarez was also skeptical of managed competition. He said the fact that employees have won each bid thus far shows the city should focus on other approaches.
“These savings could have been achieved through the city’s normal budget process without the cost and acrimony of managed competition,” Alvarez said in a statement. “The budget process has the added benefit of being much faster and more flexible in response to changing circumstances.”
Former City Attorney Mike Aguirre, who supported the managed competition ballot measure in 2006, said he’d prefer to have the city auditor’s office review each city department and decide whether managed competition or other efficiency programs make sense.
Faulconer, however, remains committed to the program.
“Managed competition is one of the most important things that we can be doing as a city to save dollars so we can reinvest those dollars in the neighborhoods, and we need a mayor who is going to support this program, that is going to make any necessary changes but will not go backwards,” he said.