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May 26, 2023

Councilman requests study session on privatizing city departments

Economic times are hard, and Gilroy City Councilman Craig
Gartman wants to consider the idea of privatizing city services as
a way to possibly save money.
Economic times are hard, and Gilroy City Councilman Craig Gartman wants to consider the idea of privatizing city services as a way to possibly save money.

Gartman sent an e-mail to fellow council members late Tuesday requesting that the council investigate the idea of bidding out the city’s various departments to private companies and other agencies. He requested a study session for April 12, but whether that study session happens will likely come down to a council vote April 5.

“I believe in capitalism, and I think that if we can get good services at a lower cost to the community, then I think that would be beneficial,” Gartman said Wednesday.

Someone recently told Gartman that Indianapolis privatized its city services in the 1990s, spurring him to research the subject. He said he learned that many city departments were able to cut costs and improve customer service as a result of those changes.

Gartman stressed that the concept of privatizing services is not foreign to the City of Gilroy. For instance, the city already has a private company handle its maintenance service. In addition, a private firm also oversees the operations of the South County Regional Wastewater Authority, used jointly by Gilroy and Morgan Hill.

“This is nothing new,” Gartman said. “I’m just saying, why don’t we start taking a look at all the departments?”

A whole host of questions would have to be addressed if the city decided to have all of its city departments go out to bid, City Administrator Tom Haglund said. Those include issues of how potential bidders would be qualified and how long the city would contract with its various departments. He said he had not even started to think about the connotations of such a policy change regarding unions and city retirement plans.

“It would have to be thoughtfully studied,” Haglund said.

Although Haglund said he did not know of any cities that contracted out all of its departments, he said most cities have some degree of privatization. Consultants can provide specific expertise in a given area, he said. For instance, the City of Gilroy has hired an architectural firm to design its new library, he said.

Some cities also have attempted to increase efficiency through inter-regional partnerships, Haglund said. For instance, the City of Gilroy has teamed up with the City of Morgan Hill on the SCRWA project, and the two cities also work together on environmental services.

In addition, the city is looking at the possibility of inter-regional contracts for its fire services, possibly with the South Santa Clara County Fire District.

Jim Buessing, secretary and treasurer of the International Association of Fire Fighters Local 2805, which represents Gilroy firefighters, said he had heard of cities that had contracted out their fire services to private firms. However, many of those cities later reverted to placing their fire services under municipal control, he said. Local 2805 opposes privatizing the Gilroy Fire Department, Buessing said.

“It’s not been a widely accepted public safety model,” he said. “The government that is paying loses all control over how that operates.”

Mayor Al Pinheiro said he had not had much time to think about privatizing city departments, having just read Gartman’s e-mail this morning. However, any council member can ask to have a study session on a certain topic, he said. Usually, council members agree to the session as long as the issue has not already been addressed or if there are not higher priorities that require a study session, as there is always something new to be learned, Pinheiro said.

At the same time, Councilwoman Cat Tucker suggested in an e-mail that council members discuss at the next council meeting whether they want to devote a study session to the idea, as the council had already discussed taking a regional approach on some city services during the council’s recent goal-planning session.

Even Gartman said there are many questions that need to be addressed if city services are bid out, such as what would happen to current city staff if individual departments are privatized. Still, he said no one will ever find answers if they do not first ask the questions.

“You’ve got to open it up and say, ‘Where can we save money to the city and maybe even increase customer service?'” Gartman said.

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