City May Expand Managed Competition

The City Council today will discuss its proposal to extend managed competition in government, a process that sends public services out to bid by private companies and the city itself.

Under the proposal, contracts would be awarded to bidders who offer the city the best service at the lowest cost. But it could also translate into job losses for city employees if private companies show they can provide better services cheaper than the city can.

“This whole issue is not being undertaken because we are dissatisfied with level of service we have now,” Councilman Greg Smith said Monday. “If we didn’t value our employees, we would have picked the path of straight privatization and cut them out altogether.

“Rather, we are looking down the road to a time when our resources may be scarcer and the demand on those resources greater.”

During the last four years, the city has contracted with private companies to provide computer services, mail operations and landscaping maintenance.

As a result, Irvine has experienced a 4% annual cost reduction per capita for services and a 6% annual increase in service level. Currently, the city contracts 18% of all of its services.

A recent study performed by Price Waterhouse indicates the city could benefit further by privatizing additional services and departments.

Smith said the city has made no decisions on which services or departments are being considered for managed competition.

“I don’t think it’s proper for us to move ahead without discussing it with our employee associations,” he said.

The council today is expected to direct staff to meet with the city’s employee associations over the next few weeks to get their input. The council meets at 4:30 p.m. at City Hall, 1 Civic Center Plaza. Information: (714) 724-6000.