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.
A couple of things people are missing here:
Everyone knows what it is like to wait to get a vehicle repaired at a car dealership. It’s make an appointment and be at the mercy of the business.
Next, from what I understand, these city mechanics work beyond traditional business hours which allows for the quick repair of emergency vehicles.
And this is the second local blog to suggest it’s not the city’s job to provide good jobs for people. I disagree. It is the city’s job to find quality employees to provide high quality work for the residents of the city and if it takes a little extra money to have people available to repair vehicles quickly and efficiently, rather than saving a few dollars while a vehicle is parked outside of a private business, then that’s probably a tolerable inconvenience.
Last, I’ve been to seminars on “privatization” and “outsourcing” and many things taught in these are simply hidden ways to bust unions and save money by locating sub par organizations to replace the work done by quality workers. It really is about getting what one pays for.
Cj,
how many head of household jobs did Campustown bring in? Cub Foods, these are TIF’s? If one wants to look at paying head of household jobs as a subsidy…a type of welfare such as Road construction jobs are..bear with me (not a perfect analogy)…
think of the return on the investment in these types of “subsidized jobs”. These people (city mechanics) live in the city, pay taxes, generate mortgages, shop, pay utilities, while providing a service to the city, etc. They have a work ethic.
The average welfare receipient doesn’t pay property taxes, does not generate mortgage business, does not pay utilities, food, medical, etc. It is a 100% drain, no recoup. Chances of development of a strong, solid work ethic is greatly reduced.
Outsourcing these types of jobs means that they don’t pay head of household salaries which either means both spouses work as tax payers subsidize the day care, or help pay for partial food stamps, and/or pay for Kid care (medical), etc. We pay one way or another as taxpayers, whether it comes from my state, local, or federal taxes it still comes out of my paycheck every two weeks.
This makes me an investor in my community; city, state, and federal. I believe it to be wise investment to pay our city mechanics because they in turn use my tax dollars to re-invest in my community, vs. paying out and receiving little to no investment on my return because we have to subsidize the outsourced workers in other areas. A better example is where I work. We are a private agency with a state contract. We make no where near state wages or benefits. Guess what, workers with Master’s degrees qualify for food stamps for their families, workers with bachelors degrees can get medical cards for children as our health insurance is too high to afford to put families on it. Is the state saving any money…not really, it’s merely a shell game from one budget to the next. Is the return on the state’s investment the same. I would guess most likely not, altough the quality of the work is high, but only because of the dedication of the staff, not the incentives to work.
Outsourcing also provides big opportunities to create a new business model. A better way for the city to go would be to help the employees who are affected to start their own maintenance contracting business, give them a contract for maintenance for a year or two. Then they would be in a position to provide similar, quality services for other organizations and grow their business. It’s what happened with a number of Info Systems groups in the area years ago (Cat, CILCO) who left their companies, contracted back, then expanded and grew and created even more good paying jobs based here in Peoria. Got to think creatively rather than either or. If you always do what you’ve always done you always get what you always got!
Better yet, how about outsourcing all the city hall jobs. Traffic tickets to a private company. We get a percentage. Then the staffing there also, send it out to private firms.
O’Brien, the RFP outlines the turnaround time, service guarantees, and fleet availability percentages the city requires. Any company bidding would have to meet those standards if they want to be considered.
Paul, I already said that TIFs have been abused. You say, “Outsourcing these types of jobs means that they don’t pay head of household salaries….” That’s not necessarily true. Elsewhere in Randy Oliver’s communication, he states that the city could require that bidders hire union labor. This isn’t just about wages, but benefits and payroll taxes and administration, etc., etc. There are a lot of costs that the city can save by outsourcing that don’t necessarily mean lower wages for the workers.
Emtronics, I can just as easily turn the tables and ask why we don’t bring all city needs in-house. E.g., instead of outsourcing management of the parking decks to National Garage, why doesn’t the city just hire its own employees for that at head-of-household wages with benefits and pensions?
CJ:
Would you be able to get a draft of the RFP and then post?
The vendor would use the City’s current tools and facilities at Dries Lane and Fire Station 8.
Since I have not read the RFP, then what happens when the ‘current tools’ are worn out? Does the city continue to purchase new tools? The company and employees would be bondable? A lot of questions…..
Karrie — it’s all in the Request for Council Action on the city’s website. It’s a large PDF file, so you may want to right-click and save it. It takes a while to load.
You speak of using the current tools and facilities for the new outsourcing. Who is going to carry the liability for this and who pays for the utilities for this operation, and how does this save us money? Liability and utilties are a huge portion of expenses for any business.
Seriously – this is union busting. The city goes into every venture (ball parks, RecPlex, parking decks) and if it would only take care of what it is intended to (polie, fire, streets and code enforcement) there would be plenty of money. But, we want to build museums and all the feel good stuff! This city is soooooooooooooooo misguided!
the words “not necessarily” is not necessarily reassuring to those whose jobs it effects.
The maintenance contracting business idea might have some merit, but again the risk is assumed by the current employees, something “not necessarily” reassuring if you have a mortgage and a family. Again, working for an agency that has a state contract the wages and benefits are significantly lower than the state employees, there are other non financial benefits, but to go from one to another would be very difficult to support a house payment and such expenses based on the previous salary amount.
sctobrien,
Yes, those city employees stay late if needed and they get paid overtime for it as I am sure your car dealer’s mechanics would if they were allowed to.
(remember David Haste and his OT?)
Give me a break. I have worked hard and continue to work hard to earn a living. I do not owe these union jerks one thin dime. Yes I am going to rip on the union becase it seems the folks that make up the union and their supporters belive that it is fine to steal money from my hard work so that they can get paid well. If mechanics in the private sector dont make head of household wages then figure out something else to do with your life. I have spent the last four years back in school learning new skills to get a great job. I now have that great job and my work was not so that I could hand over ever more in taxes to support someone who is unwilling to do the work themselves. The city unions have become nothing more then legal extortion against those of us in this city who are working hard and trying to do right by our famillies. I guess you have all learned from your bosses like Haste who belive he is worth thousands in overtime for screwing up. In the real world both he and the union would have long ago been kicked to the street.
Joe, you’re an idiot. Without unions, hard working people would be earning $1.25 an hour. Without unions, folks would still be getting hands chopped off by machinery every other day. It’s no coincidence that as the unions have beaten back by cinder block heads like you, that more and more good jobs getting farmed out overseas, so that someone in South Korea can earn a couple cups of rice per day.
Your “progressive” thinking is symbolic of what’s going wrong with this country.
Joe – you seem a little bitter over unions! Dave Haste (management) is not a union employee and his boss (management) allowed the overtime. They both should be fired. Your “great job” must pay a head of household salary and like I stated before (see above post) if the city would just do city services your taxes might go down. Now go thank a union man or woman who goes to work everyday and works as hard as you do!!!!!!!
Well Bucket Head I dont really have a problem with unions in the pure sense. What I have a problem with is a union telling me that even though the city can get the same job done for less money, I need to pay them (the union) more. I dont care if you are union or not, just give me the best service for the money. If you want to earn head of house hold wages learn a skill that justifies the pay. Russia among other such places tried the concept of paying broom pushers the same as doctors and look were it got them.
Sassafrass Molasses, I’m surprised by one of your comments.
Sassafrass Molasses says, ” It’s no coincidence that as the unions have beaten back by cinder block heads like you, that more and more good jobs getting farmed out overseas, so that someone in South Korea can earn a couple cups of rice per day.”
If what’s recently happened to Ford Motor, and GM in the past 2 years hasn’t made you a believer that something is wrong, then nothing will. This isn’t the exact same scenario as the city issue, but will serve as an example.
High labor rates are the reason companies go overseas. Jobs are leaving so US companies can stay competative against compnaies without unions.
Import buying habits are another reason. I don’t care if a Camry or Accord is built 70% in the US. It doesn’t matter. They have a competative advantage in being non-unoin. They don’t have the benefit (health care, pension, retirement health care) costs that “Big 3” manufacturers have. That’s why the Big 3 are hurting so badly.
The City should provide us the best services possible, and the lowest cost. This gives us the biggest “bang for the buck” and allows the city to either increase services, or lower taxes. I’m in favor of lower taxes.
the current mechanics say they do a better job at less cost then any private company could. if thats so, why not let the RFP go out? all the bids would come back too high or not able to do the job
it seems wrong to not even let the RFP go out. send it out there and then have a good discusion about wether its a good idea when there is actually something to compate the current situation to
W. Bluff – You hit it on the head. Put the RFP on the street and see what the resulting responses provide. The deferral is nothing but an attempt by some councilmembers to kill the process. If the employees weren’t so concerned that the light of day will show how uncompetitive they are in the marketplace, they wouldn’t be screaming so hard. In most progressive communities that conduct an RFP of this nature, the employees are allowed to “bid” on the contract also.
So, if as the union has said, they have plans on ways to save money – they can put them in writing and commit to them. I was completely amazed at the fake “shock and awe” expressed by some councilmembers regarding their “lack of knowledge that the unions offerred a significiant cost saving proposal” during negotiations. PLEASE!
Ask for and review a copy of the Union’s offers during negotiations and you’ll see a plethora of proposals that clearly will not save money. They ask for unbelievable increases in benefits, working conditions, wages, etc. As was noted by a commenter on PeoriaPundit, they even feel that working 5 eight hour days instead of 4 tens is somehow a “giveback” to the City – and there are working those extra days for free. They still get paid for 40 hours a week. End of story.
Buckethead – come on and get real. There is more to living in a City like Peoria than simply police, fire, street and code enforcement. None of which, by the way, we’re performing in the most competitive fashion now. People move to Peoria for an urban environment and if we want to entice people to move here (as opposed to the suburbs surrounding us) we have to offer more than they do to counteract our position as the central city (and the resulting problems that brings with it).
I’d like the Council to take this a step further and put a schedule together where they systematically review all direct services and most indirect services to public. Put out an RFP every six month to review a new service and let’s see how much more competitive we become. Even if we don’t contract out the services, we’ll find new ways to improve our services – and that can’t be anything but good.
Peo Proud – you should wake up! I sat at the negotiating table for 18 months with the city. So tell me, how you saw the poposals? Your logic is pathetic, as long as I make good wages great – forget everyone else!!!! Well you have the same mentality as Central Peoria, unions cause all $$$ problems, the million $$$ CEOs we have in this country are worth it!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Bucket Head, I don’t understand your logic.
Do you think the city exists to employ people, or serve it’s taxpaying citizens?
Answer: The city should be here to serve it’s citizens. As a product of serving citizens, it must employ people.
While serving it’s citizens, it needs to provide these services at a reasonable, market-rate cost.
What you are saying is that the City should pay above-market wages for the same services? It may very well be that the City union employees ARE doing the service at a lower cost. However, if they don’t investigate the market-rate, how will anyone know the true cost?
Also, unions don’t cause ALL money problems. I was just showing an example of a situation where a union was PARTIALLY responsible for a loss of jobs and companies losing money. Management and CEO’s are also factors..
Buckethead — don’t blow a gasket! I don’t think anyone stated that unions are bad – just that there are more efficient methods of performing services and unfortunately, they don’t always get incorporated into Union contracts. And I don’t think that I said anything at all in my post about my salary and saying forget about everyone else.
But Central Peoria is right, the government is there to serve the public not the employees. I notice that you didn’t disagree with my assessment of the proposals made – just how I would know abou them. It’s really quite simple: 1. I have MANY friends who work in local governments and some that conduct negotiations. People love to talk about what they are trying to get out of their employer. I can’t believe some of the items that they indicated were being sought as part of their negotiations. 2. Council executive sessions, especially in Peoria, leak more than sieves.
My main point was and still is — that if the City is serious about doing the best it can for the public in terms of service provision, then it should review all aspects of government — without political influence and intervention. Let the facts speak for themselves.
Sometime I’ll take you out for a beer and we can discuss some of the many ludicrous contract provisions that serve NO purpose in providing service to the public but serve as a great benefit to the public employee. Just to be fair, we can also discuss some of the ludicrous management practices that exist. The only solution out of Peoria’s perennial situation is to step back and take a reality check and look beyond our 45 sq mile kingdom to see how other communities operate.
Peo Proud – you get the city to stay out of grogery stores, parking decks for doctors, museums and ball parks we wouldn’t even be discussing this! They are so worried that they will go somewhere else. To prove my point, how many candidates campaign for money to be spent on ball parks, parking decks, museums – no they cry for fire stations, street repair and police officers! Get in office and it changes!!!!!!!!!!! I would love a beer.
PS – Joe called US “union jerks”
Buckethead – glad you realize that virtually all politicians are the same. Say one thing to get elected and do another once in office. Unfortunately, the rare breed that doesn’t work this way dont’ appear to be in Peoria. First round on me…as long as you order domestic!
Peoia is a union town. That was probably more true in the past then today, but even today large numbers of folks are in a union. Some people like bucket head are quick to label me as anti union. It is however my belife that the folks who are most against working wages for everyone are union members themselves. In Peoria a union town, how many local grocery stores are in this city. How many union home builders. I am sure that when a local union guy buys a home he is sure to use union contractors, after all homebuilders deserve to earn a living wage. In my experience the guys yelling union all the time, are the same guys who line up at walmart to save a buck. Sure they deserve a good job but screw everyone else.