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January 13, 2011

Privatization: Coming Soon?

Amanda Haddaway

There has been a lot of talk lately about the privatization of local government. In plain language, this simply means that governmental functions are transferred from the public sector to the private sector.


This is typically accomplished through a competitive contracting process where the lowest bidder wins and performs work for a specified period of time until the contract is rebid and the process starts over.


Our Frederick Board of County Commissioners is planning a fact-finding field trip to Sandy Springs, GA. next month to see if privatization might be a model that we can employ in Frederick County to save the almighty taxpayer dollar. It will be interesting to see what conclusions the commissioners come to after they see privatization at work.


Some privatization could be good for Frederick County, but government should not be privatized in its entirety because there needs to be some checks and balances. A majority of the work can be completed by contractors, but there should be some oversight and accountability ensured by county employees. There also needs to be some continuity when contracts are rebid and contractors change. The risk of losing the entire body of intellectual knowledge is too high to go to a model that is entirely contractor-driven.


Furthermore, there are some departments and positions that are inherently governmental. For example, the county might be best served to leave contracting functions to county employees. That is, having county employees involved in the process to select the contractors who will take over the outsourced operations. This could help eliminate cronyism and favoritism among contractors.


The existing budget shortfall is a fluid number of anywhere from $11.8 million to upward of $26 million. These are not pocket change numbers and drastic actions will need to be taken. Our current model is no longer working. In our budget heydays, the county could afford to provide additional services to our citizens. Now, we’re faced with only being able to provide the necessities. If there’s a way to provide those essential services for less money, it’s certainly an option that should be considered.


Privatization doesn’t necessarily mean a loss in jobs for current county employees. Most contractors will bid key people in their proposals, but they won’t have every position filled when they are awarded the contract. Current county employees would be eligible to apply with the contractor and be hired if the contractor deemed the person qualified for the position.


The contractor would be wise to hire the best and brightest of county employees, so that they start with some historical details of what has worked and what hasn’t in the day-to-day operations of county government. The employees’ salaries and benefits would likely change, but having a job is often better than no job at all.


The other elephant in the room is how we will pay for retiree benefits going forward. This issue plagues Frederick County, the City of Frederick and municipalities, not to mention boards of education, across the country. By contracting positions to private contractors, the county would be “off the hook” for full retirement benefits for those people who left the county’s employment to work for a contractor.


There may also be an opportunity for the county to work with the surrounding municipalities to take a look at redundancies and whether privatization should be an option for those government entities as well. City of Frederick residents have long complained, and justifiably so, about double taxation for certain services. Perhaps a contractor could assist with the initiative to analyze areas where there are duplicative services. There may be a significant cost-savings by combining some county and city services or county and municipal services.


No matter what the commissioners decide about privatization, citizens should expect dramatic reductions in service if they don’t want their taxes to increase. There will be additional emphasis placed on only funding “mission critical” services, such as public works and public safety. Gone are the days where every county-sponsored program and department were fully funded and had wish lists for “nice to have” programming without being able to show a true return on investment and a necessity to the citizens of Frederick County.


We should all wait anxiously to hear what the commissioners learn from the bold move that the Sandy Springs government has taken. It’s sometimes hard to be a pioneer in changing the status quo, but sometimes you don’t have a choice. Drastic times call for drastic measures and some privatization may be just the solution for Frederick County.


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