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As local officials look for ways to balance their city’s budgets, some are considering privatization of core municipal services as a way to save money. But, as the repeated experiences of many cities and local municipalities show, privatization is not a cure for financial woes. Privatization can increase costs for a city, give up democratic control, and compromise the quality of critical services that residents regularly rely on.
Even in this dismal economic climate, some cities are saying no to privatization. The city of Yuma, Arizona recently turned down bids from private contractors to take over vital government services, such as garbage collection, golf course operations, and fleet management. Public officials determined that the private companies’ cost estimates were significantly more expensive than public provision of the services. Residents would have paid twice the amount in fees to a private company over what they currently pay to the city for the same service.
This backgrounder brief will explore these and other common themes related to the privatization of municipal services, and provide examples of experiences from cities around the country that have considered or have privatized critical services.
Specifically, this brief will examine privatization in the following areas: park maintenance, street maintenance, garbage collection, building inspection, information technology, printing services, and “contract cities.”