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Study: Managed Competition Can Save San Diego $80-$200 Million a Year

Government-run golf courses, photo copying offices and trash collection should face competition from private sector

September 12, 2007

Los Angeles (September 12, 2007) – San Diego taxpayers could save $80 to $200 million per year by allowing the private sector to compete with government agencies to do things like clean city buildings, perform maintenance on government vehicles, and run golf courses, according to a new study by the Reason Foundation and San Diego Institute for Policy Research (SDI).

With San Diego facing a nearly $400 million cumulative budget deficit by 2012, the study identifies 11 areas of city government that are ripe for managed competition - where private sector and government service providers compete with one another to earn contracts on the basis of quality and cost effectiveness. These include: copying and printing, vehicle maintenance, golf courses, libraries, permit processing, environmental services (including trash collection and landfills), water and wastewater operations, information technology services, facility maintenance (including janitorial services), street maintenance, and parks and recreation.

"Managed competition is a critical tool that voters gave officials in the City of San Diego 10 months ago," said Steve Francis, chairman and founder of SDI. "Our hope is that this report informs city leaders who may be looking for places to start and pushes them to think differently when in comes to the kinds of functions which they put through managed competition. It is vitally important to think big and to think bold."

The study includes over 30 examples where other cities have successfully partnered with the private sector to improve services and save money. For example, since Riverside County contracted its library operations in 1997, libraries are open 34 percent longer, book purchases have doubled, and the number of library staff members has increased.

In each of the 11 areas identified, the study offers a low-end and high-end cost-savings estimate. For instance, San Diego expects to spend over $4 million on in-house printing and photocopying this year. But the Reason-SDI study concludes that if private companies and city employees bid for printing and copying projects, taxpayers will save $435,000 to $1 million a year. The chart for the 11 services, and the potential savings, is here.

"Taxpayers win whenever there is competition, even when the competition is won by public sector providers" said Adam B. Summers, policy analyst at Reason Foundation and co-author of the report. "They get more accountability, better results, and lower costs. Managed competition can help San Diego reinvent local government by focusing on innovation and becoming more efficient."

Full Report Online

The full study, Streamlining San Diego, is available online at www.reason.org/san_diego_managed_competition.pdf. Reason's California-related research and commentary is here and Reason's government reform-related research is here.

About Reason

Reason Foundation is a nonprofit think tank dedicated to advancing free minds and free markets. Reason produces respected public policy research on a variety of issues and publishes the critically acclaimed monthly magazine, Reason. For more information, please visit www.reason.org.

About the San Diego Institute for Policy Research

The San Diego Institute for Policy Research (SDI), LLC is a non-partisan organization whose mission is to improve the efficiency and effectiveness of the public sector throughout San Diego County. Established in 2006, SDI produces high quality policy to help generate debate and discussion amongst San Diego's decision makers and citizens alike.

Contacts

Chris Mitchell, Director of Communications, Reason Foundation, (310) 367-6109
W. Erik Bruvold, President and CEO, San Diego Institute, (858) 361-1540



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