Saving Private Coleman

St. Paul launches a campaign to open bidding wars on city services

Indianapolis officials tout projected savings in the range of $400 million over the life of private contracts recently sealed with the city, some of which extend well into the next century. The Compete St. Paul Task Force recommends that St. Paul set a similar goal. But look closely and you'll see that the lion's share of that savings in Indianapolis--some $294 million--came from turning over wastewater treatment and the management of the Indianapolis International Airport to the private sector--two services that don't exist in St. Paul's budget because they're handled on a regional level.

Perhaps more to the point, under Goldsmith's leadership, full-time municipal jobs plummeted from nearly 4,700 to 3,541, a 25 percent drop. "Middle managers were fired, basically, not the guys plowing the streets and picking up the trash," says Kate Healey, Goldsmith's press secretary.

Steve Fantauzzo, executive director of the American Federation of State, County, and Municipal Employees (AFSCME) Council 62 in Indianapolis, says that no union employees lost their jobs during the integration of competitive bidding and notes that city employees are winning four out of five projects currently put out for bid.

Animal Control's Bill Stephenson says when the city last checked, no private company cared to take over the doggie patrol
Craig Lassig
Animal Control's Bill Stephenson says when the city last checked, no private company cared to take over the doggie patrol

The difference is that in Indianapolis, only a rough 65 percent of the city's workforce is unionized. In contrast, as of the end of November, all but 60 of St. Paul's 3,629 full-time, part-time, and temporary employees were represented by a union. That's 98.5 percent representation, excluding only department heads and mayoral and council staff.

And for all of its austerity measures, Indianapolis's 1999 budget of $441 million is just 4 percent less than its $460 million budget in 1992. One might ask how the city cutting its staff by a quarter has yielded only a single-digit savings. The answer? The city's spending on public safety skyrocketed by 29 percent in the same period. On the St. Paul front, Reid says Coleman isn't interested in simply moving piles of money around: Compete St. Paul is, he says, "designed to make sure we're being as efficient as we can; it's not designed to produce savings that could be spent somewhere else."

That still leaves open the possibility of job cuts as the proposal is put into practice. Professor John Remington, who teaches at the University of Minnesota's Carlson School of Management, has researched labor relations for years. He says middle management typically gets the squeeze when cities shift into privatization gear. As for St. Paul's blueprint, "I think we're talking about, well, maybe more trouble than it's worth," he concludes, adding that putting services out for bids often ends up eating more of the city's time and money than anyone predicted. "You may be able to downsize, you may be able to lay off some of the workforce, but at what cost?" Remington asks.

Jerry Serfling, assistant director for the AFSCME Council 14, which represents about 1,000 St. Paul clerical and technical employees, says his membership is open to the possibility of competition in some areas. But so far, he says, he has not been provided with any details concerning the two issues that union members are most concerned about: job protection and assurances of a "level playing field" in the bidding process. Reid believes that meetings with union officials have so far gone well, though the specifics of the plan still need to be ironed out.

The Compete St. Paul report makes clear that the move to invite private-sector contractors to vie for public services will require a great deal of collaboration between the city's administration and its employees. In that spirit, union officials asked in the wake of the report that they be part of the selection process for hiring a staffer to spearhead the crusade. But, in what could be read as a portent of things to come, they were told, thanks, but no thanks. "We were told that that would not happen," Serfling says, noting that Coleman's administration has never been keen on collaboration between city employees and administration. "It looks like it's business as usual."

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