FoFC’s position on privatization of county services

Background

The Board of County Commissioners (BOCC) in Frederick County is investigating privatizing county services.  Frederick County paid $25,000 to produce an analysis of developing public-private partnerships in Frederick County to Oliver Porter, who runs his own consulting firm called PPP Associates. Mr. Porter recommends that Frederick County switches to a public-private partnership for the majority of its services.

Friends of Frederick County’s Position on PPP’s

“Privatization can be another word for funneling taxpayer money to friends – or good old boy cronyism, not something we should encourage in Frederick County.  We should never assume upfront that a public-private partnership (PPP) is the answer, and should have a full accounting analysis and evaluation to show that the PPP in discussion saves taxpayers money and provides high quality service to county residents” says Janice Wiles, executive director.

The BOCC has not done their homework. While privatization can work in some instances, the decision to switch the entire framework of our county government to the private sector should be a process which undergoes careful analysis and critique.

  1. Amongst thousands of potential examples of privatization, the BOCC seems to be relying primarily on Oliver Porter and his work in Sandy Springs, GA either out of laziness or an eagerness to move forward without giving the process the necessary amount of study. In February 2011, the BOCC took a trip to Sandy Springs, and the BOCC paid $25,000 to Oliver Porter to produce a report due to his experience in Sandy Springs.
  2. While Oliver Porter recommended in his presentation for the government to contract all services to one private partner and allowing that private partner to do all of the subcontracting in order to save money, Sandy Springs is now doing the opposite. In order to save money, Sandy Springs rebid their contract, and is now doing more of the contracting themselves with five different private partners.[1]
  3. Counter to Mr. Porter’s advice, when rebidding Sandy Springs split up their Financial and Information Services contracts from the rest of the governmental service contracts because they found that conflicts of interest arose.1
  4. Three out of four other cities in Georgia that Mr. Porter helped to establish PPP’s in (Johns Creek, Milton, and Chattahoochee Hills) have now cancelled their contracts, deciding to provide those services in-house in order to save money.[2]
  5. In Mr. Porter’s examples, it is likely that better services were provided without raising taxes because the cities were previously unincorporated areas of the county – therefore having nothing to do with their privatization model.

Our lack of evaluation from an unbiased source is likely to lead our government straight into the PPP-related pitfalls seen in the past.

  1. In the mid-1990s, a privately constructed but poorly maintained water system in Braddock was deemed a public health risk by the Maryland Department of the Environment after a dead animal was found in an open air tank and a child became life-threateningly ill with E. coli poisoning.  Frederick County was ordered by the state to take over and replace much of the private system – costing the taxpayers and Braddock water users tens of millions of dollars.[3]
  2. Between 2002-06 Frederick County Commissioner Mike Cady was working with private developers to amend the county’s water and sewer plan to allow the private construction of a package  sewer plant to serve the Lewistown area. There is a history of failure of private package water and sewer plant system.  This history includes Lake Linganore, Pine Cliff, White Rock and Fountaindale. The effort failed when three of the BOCC members recognized the history of package plants and the tens of millions of dollars the county would have to pay to cover its maintenance.  The private entity refused to accept operation and maintenance responsibility.3

Problems with the BOCC’s current approach to privatization

  1. We hired an advocate of PPP’s to evaluate the feasibility of our county switching to a PPP for service provision, and therefore received no objective critique.
  2. The BOCC has not formally introduced any alternative privatization models to the public, and Mr. Porter’s examples are not applicable to Frederick County.
  3. The BOCC has taken steps to exclude the public from the decision-making process.
  4. Considering the minimal amount of research and evaluation conducted by the BOCC, the timeline for privatization is much too rushed, and shows us that Commissioners Young, Shreve, and Delauter are more interested in ideology than actual cost-savings.
  5. Commissioner Young made a comment during the most recent public hearing which suggested his only goal may be to lower the salaries and benefits of hard-working county employees, but that the political will to do so did not exist. If this is the case, then privatization may only be a costly backdoor strategy to sidestep the wishes of Fredrick County voters for Young.
  6. The BOCC has already initiated a pilot program regarding water and sewer inspections.[4] This program allows developers to conduct inspections over their own water and sewer improvements with County oversight, as opposed to County inspectors. If our governmental services continue to be privatized, will the BOCC allow all private partners to inspect the quality of their own work at the potential cost of the public health, safety and welfare?

[1] Murchison, A. (2011). Sandy Springs awards new contracts; leaves out CH2M Hill. Sandy Springs Patch. Retrieved from http://sandysprings.patch.com/articles/city-awards-new-contracts-leaves-out-ch2m-hill

[2] Williams, D. (2011). New cities abandoning ‘one-stop’ outsourcing. Atlanta Business Chronicle. Retrieved from http://www.bizjournals.com/atlanta/print-edition/2011/05/27/new-cities-abandoning-one-stop.html

[3] Thompson, Lennie. (21 June, 2011). Personal communication.

[4] Board of County Commissioners. May 19, 2011 meeting minutes. Retrieved from http://www.frederickcountymd.gov/archives/30/05%2019%2011%20Thursday(r).pdf