The San Bernardino City Council approved its bankruptcy exit plan Monday on a 6-1 vote.
The exit plan comes nearly three years after the city sought bankruptcy protection, with outsourcing services and impairing every creditor other than city employees’ pension system proposed as the way forward.
Outsourcing services is a critical step that the city should have taken long ago. Whenever there are efficiencies to be gained, costs lowered or better controlled and opportunities to limit the size of government without compromising service, that route that should be taken.
One group most upset at this strategy is the firefighters union, whose members’ salaries, benefits and pensions have been a disproportionate burden on taxpayers.
“The first responsibility of any city is the protection and safety of its residents,” the union’s vice president, Steve Tracy, said at Monday’s meeting. “Privatizing fire protection puts the bottom line ahead of public safety, pure and simple.”
The city thus far has met with three entities, two public and one private, for fire services.
Still, the arguments about privatization are familiar. Profiting is demonized, while high salaries and bloated spending are considered perfectly reasonable so long as government employees and agencies are involved.
San Bernardino, like all cities, has finite resources.
For decades, city leaders poorly managed those resources, spending more than they could sustain and doling out money to politically helpful public employee unions.
Andrew Belknap of Management Partners, which helped craft the city’s exit plan, spoke of the problem of keeping so many services in-house.
“The city has ineffective service delivery,” said Mr. Belknap, whose presentation to the City Council noted that “other cities operate at lower costs with fewer employees.”
Additionally, the reliance on in-house service delivery contributes to escalating pension obligations, “making in-house service provision, for certain functions, unsustainable.”
To that point, the city presently projects that pension contributions alone will soon engulf over 19 percent of the city budget. While there may be some appeal in keeping city services in-house, in all reality such a commitment can lead governments to an unreasonable fiscal situation.
Whether efficiencies come about through contracting with other government entities or with the private sector shouldn’t matter, so long as residents receive the best possible service at the best possible price.
http://www.pe.com/articles/city-767736-service-services.html