Municipal governments should continue to pursue this option for trimming cost of government
A University of Michigan survey confirms that more county and municipal governments are turning to privatization to help save money while maintaining services to their residents.
The survey, conducted by U-M’s Center for Local, State and Urban Policy, concludes that privatization is common in Michigan, with 65 percent of the jurisdictions reporting they outsource one or more services, including 84 percent of the state’s largest jurisdictions.
Overall, the most common services outsourced are attorney/legal services, engineering, waste/recycling, property assessing and inspections.
Among communities that outsource any service, local leaders in 73 percent say they are satisfied with the results.
Tom Ivacko, program manager at the center, says the survey was first taken in 2009 and his department hopes to continue to conduct yearly updates.
“Our hope is over time we’ll have this incredibly valuable data source to aid not only public policymakers but researchers as well,” Ivacko says. “Also, we hope to increase accountability and transparency in the public sector.”
The survey also found that Macomb County communities are “significantly less likely to say they outsource compared to Wayne and Oakland counties.”
However, County Executive Mark Hackel says Macomb may be behind but it is “migrating in that direction.”
Hackel says he supports privatization when the opportunities arise, if it is cost effective.
In some cases, such as police protection, Hackel says it is better to have communities contract with the county or share services.
Five Macomb County communities contract with the sheriff’s office for police protection and one for dispatching services.
Ivacko also noted there is more inter-government cooperation, particularly for such services as police, fire and 911 dispatch.
“For these types of services, it’s easier to cooperate with a neighboring local government instead of privatizing,” he says.
Many Oakland County municipalities have found it particularly advantageous to contract with the sheriff’s office for police and dispatch services.
The Sheriff’s Office patrols 15 municipalities, including three cities, 10 townships and two villages, plus Oakland County Parks and Recreation.
Six other police agencies and 16 fire departments contract for dispatching services.
The survey found that while most local leaders are satisfied with the outcomes of their outsourcing, relatively few think they should privatize more services.
Only 10 percent of Michigan local jurisdictions expect to boost outsourcing in the coming year.
That’s mistaken thinking.
The need for sharing services and privatization grew out of the Great Recession.
But just because the economy is improving doesn’t mean governmental units can revert to old habits. Prudent municipal budgeting is always a necessity to avoid deficit spending.
While the survey is impartial and does not draw any conclusions about the value of intergovernmental cooperation and privatization, the message is clear: These practices will help municipalities trim budget costs and operate at a more efficient level while still providing services to residents.
It would bode well for state, county and local municipalities to explore more fervently and frequently inter-government cooperation and privatization.
These are proven fiscal options that will continue to be valuable factors in balancing governmental budgets.