The City of Peoria owns a lot of large, specialized vehicles (snow plows, backhoes, graders, fire trucks, etc.), and thus, they employ mechanics to maintain its fleet as well as professional drivers for CDL Truck Driving Positions. Now the city is looking to possibly outsource this service and lay off its 11 fleet maintenance employees. City Manager Randy Oliver justified this course of action in his Request for Council Action:
During the 2007 budget review sessions Council asked staff to continually seek opportunities to reduce service delivery costs. Fleet maintenance, an internal service provider, was an area discussed as a possible service where the City could potentially reduce costs and/or enhance service by contracting with a private vendor. The attached RFP [request for proposal] calls for a vendor to complete all the current fleet maintenance services provided by the Fleet Management Division of Public Works and the Fire Garage in the Fire Department. The vendor would use the City’s current tools and facilities at Dries Lane and Fire Station 8. The City would retain ownership of all the major repair equipment. Smaller hand tools would be the responsibility of the vendor.
Contracting is something that many governmental entities are considering. Cities contract out services generally to reduce costs and/or improve services. Seeking proposals will also serve as a measure to compare costs between in-house and private service delivery. While a change in service delivery may be justifiable on the basis of any cost savings, as a practical matter, however, the cost savings should be sufficient to justify the organizational change. Many local government agencies use a cost savings threshold to determine whether the change is worthwhile. An attached spreadsheet is how staff would determine any cost savings.
This has caused a firestorm of controversy, complete with accusations of union busting. At last night’s council meeting, the council voted 6-5 to defer this discussion until May 8 (after the election, incidentally) “to give labor and management time to discuss possible cost savings,” according to the Jennifer Davis’s report for the Journal Star.
The employees, of course, feel that they’re uniquely qualified to provide this service for the city and should be retained. That’s a good argument to make, and they may be proven right. I don’t think that these employees will get dumped if some private company comes in a dollar less than what it costs to provide services in-house. I’m confident their experience will be taken into consideration.
The employees also don’t want to lose their jobs, of course. They point out that these are good, head-of-household jobs, which is true. Even neighborhood activist LaVetta Ricca sprang to their defense last night:
“When this council wants new TIF areas or money for businesses, you all say these businesses are going to provide good-paying, head-of-household jobs – like Firefly (Energy’s inclusion in an Enterprise Zone) last week,” Ricca said. “Because, as you all say, this city depends on good-paying jobs. And now you’re saying you want to get rid of these guys, these guys who’ve lived here for years, who’ve been dedicated to this city. I really have a hard time understanding this.”
But this is a spurious argument. It’s not the city’s job to take taxpayer money and manufacture good-paying, head-of-household jobs. The city’s job is to provide the services residents need with the best balance of quality and value it can get. There are plenty of professional services that the city could bring in house but are more economical and fiscally-responsible to outsource to private companies. Fleet management should not get any special treatment — certainly not on the basis that they get paid so well. That’s the very reason the city manager is looking at outsourcing them!
TIFs and Enterprise Zones are tools the city uses to attract private investment and the good jobs that generates. Are TIFs and Enterprise Zones abused? I think so. But that’s not an argument for creating or maintaining in-house services that could be justifiably outsourced.