Valley may contract out city services

Quick. Who provides your water service? Who grooms and landscapes local parks? Who patches potholes in the roads – at least occasionally – and who picks up stray animals?

In most cities and counties, it’s the public entities that serve citizens in those ways. But the Spokane Valley City Council is considering letting the private sector compete for some service contracts in its city as early as this summer.

“Managed competition,” in which private and public providers compete on an even field for government contracts, can save money and improve services, some city officials said. But managed competition isn’t the best option in all cases and it could mean cutting Spokane County jobs, Commissioner Kate McCaslin said.

“We owe it to our constituents to be innovative and find new ways of providing services, to get the best bang for our limited dollars,” said Councilman Steve Taylor.

Councilman Richard Munson said inviting the private sector to vie for city contracts was part of the 13-month-old city’s original plan.

“From the day we began to campaign, we said we want to be a contract city, and we always hoped to involve the private sector,” he said. “It does make more sense to open these contracts up to serious competition because it will be more efficient.”

Spokane Valley contracts with the county for most services, including road and park maintenance, animal control and law enforcement. But some council members have said negotiating contracts with the county has been difficult. In particular, the county has had a hard time separating the specific cost of services from salaries and other overhead fees, Munson claimed.

“The quality of service is very high, but it ain’t comin’ cheap,” he said.

Taylor suggested the city might get a better response from a company.

“Some of us feel we’re not being treated with respect as someone’s largest customer would be in the private sector,” he said.

McCaslin said the county has worked hard to determine the cost of services.

“It’s frustrating to me that somehow they have this expectation that we should provide them the service at less than it costs us,” she said. “That means that the people outside (Spokane Valley) would be subsidizing the city.”

McCaslin noted that the contracts include “adjust and settle” clauses that allow the two entities to either collect or give back money if the true cost of services ends up not matching the contract’s dollar value.

“The Valley has indicated to us they intend to go forward with everything,” McCaslin said, referring to 2005 service contracts. “If they aren’t, I wish they’d tell us.”

On the other hand, McCaslin is a proponent of managed competition. For example, the county’s plans for a new $100 million-plus wastewater treatment facility involve contracting out the design, construction and operation phases of the project to a private company.

“I think (managed competition)’s an excellent idea,” she said. “I would encourage (Spokane Valley) to do that.”

McCaslin said if the county loses Spokane Valley contracts to a private company or another government entity, it will have to trim its staff.

“We would right-size our operation,” she said. “We have said all along we’re contracting with the Valley as a service to the Valley citizens. If it turns out our costs are too high and they can do it better and less expensively, that’s what they should do.”

McCaslin said managed competition isn’t always the best answer, though. Finding a company to maintain Spokane Valley’s 400 miles of road, for example, would probably be difficult, she said.

“(That work) can be quite complex, time consuming and expensive,” she said. “And, of course, they’ll want to make a profit on it.”

Hiring a company to plow snow off the city’s streets might be more reasonable, she said.

Spokane Valley’s administrative analyst, Morgan Koudelka, said the city probably would want to open up managed-competition contracts to additional competition every year or so.

“You would not want to get into long contracts,” he said. “That would make that competition unavailable to you.”

At its May 25 meeting, the Spokane Valley Council plans to discuss which services it will include in a 2005 managed-competition pilot program. Taylor said fleet management and public works services might make good candidates for the city’s first crack at such a program. Munson added park and road maintenance and animal control to that list.

The council is scheduled to issue requests for proposals from service providers for the pilot program’s contracts by the end of July, and then select service providers by Sept. 30.