Luzerne County Councilman Jim Bobeck said the concept he’s pushing for is neither of those because he wants to open up some county work to outside bidders while still giving employees who perform that work a shot at submitting their own proposal to keep it.
Known as “managed competition,” the technique has been used by some governments across the country as a way to shop around for other prices and options.
Implementing it here would ensure the county gets the optimum service at the lowest available price, said Bobeck, who proposed the idea at last month’s county council work session. He also said innovation “happens through competition.
“It is simply creating competition — competition for services that benefits everyone,” Bobeck told his council colleagues.
He cited county tax assessment as an example of a service that could benefit from the new concept, saying there have been “issues” regarding the department’s performance.
County departments generally maintain they are doing the best they can with available resources and funding, he said.
“What is the market of actually providing that service? You have no idea because you’ve never tested it,” Bobeck said.
Council Chairwoman Linda McClosky Houck challenged Bobeck’s labeling of the practice as managed competition during the work session.
“I’m pretty sure that is what you call outsourcing,” she said.
“I would totally disagree,” Bobeck responded.
Paula Schnelly, head of the American Federation of State, County and Municipal Employees (AFSCME) representing several county unions, was not at the work session but reviewed an audio recording of Bobeck’s comments and also questions the “managed competition” term.
“From a union perspective, we don’t see what he’s proposing as anything but outsourcing and privatization,” Schnelly said.
Bobeck pointed to Phoenix as an example of an area that improved and reduced the cost of its trash collection through managed contract proposals.
McClosky Houck questioned how employees could have an opportunity to bid on services in future years if their proposal is not selected the first year, which would effectively end their county employment.
In Phoenix, the city was split into coverage zones bid out in staggered years. The workers lost the first zone to an outside company but retained the others through improved proposals and eventually reclaimed the first zone when it came up for bidding the second time, according to published reports.
He asked for further discussion on his proposal at the July 14 council work session, saying he wants to press the issue in his final six months in office.
“I know it’s going to be very hard, and I know there’s going to be a lot of forces against this, but it’s very powerful, and it can be very helpful,” Bobeck said.
Bobeck acknowledged some collective bargaining agreements may set limitations or outright prohibit privatization.
For example, the contract with prison workers, which runs through 2018, says the county cannot privatize or attempt to privatize the facility during the length of the agreement.
However, the county may be free to “try and test” managed competition when agreements expire or if agreements allow, he said.
A few contracts leave the door open to privatization but require the county to schedule a meeting for the union and a new outside provider to discuss possibilities about a future relationship between them.
He said some governments also set minimum savings, such as 10 percent, that must be proposed by outside entities to consider a change, which is a compromise that could help “preserve government jobs,” he said. It would be up to the county administration to identify which services would be candidates for managed competition, he said.
Schnelly questions the logistics of a department head or employees preparing a proposal bidding amid other duties.
“I don’t understand how the concept would work, nor does it make sense,” she said.
Her suggestion for innovative ideas and efficiencies: set up a system for employees to constructively communicate and screen ideas.
“Employees may see areas not only in their own work but also areas outside of their direct control where there is waste or room for further improvement,” she said.
Tax Claim Office
County officials periodically have discussed outsourcing services over the years, but tax claim is the only office that was privatized.
Northeast Revenue Service LLC has been running the office since May 2010, when prior commissioners opted to privatize the operation to reduce general-fund operating expenses and improve collections.
Northeast Revenue has been credited with turning around the office, which had been criticized for allowing some politically connected defaulters to keep their properties out of auctions with no legal justification. Northeast Revenue also retained several prior county employees.
The county’s now-defunct Workforce Investment Development Agency was involved in a “managed competition” situation several years ago when the Luzerne-Schuylkill Workforce Investment Board publicly sought proposals to perform the agency’s work overseeing employment programs.
The agency submitted a proposal to keep the work but was not selected.
The agency’s 39 workers — all county employees — sued the county for back pay and benefits, saying the county did not honor a collective bargaining agreement requiring negotiation to contract out their work. In March the Pennsylvania Supreme Court ruled in favor of prior commissioners who had argued the outsourcing was beyond their control and under the jurisdiction of the outside Workforce Investment Board.
Prior commissioners also publicly discussed outsourcing security to see if it would save money in 2010, but the plans did not advance.Reach Jennifer Learn-Andes at 570-991-6388 or on Twitter @TLJenLearnAndes.