Private role is debated Arundel considers paying contractors to run services

December 06, 1992|By John Rivera | John Rivera,Staff Writer

As Anne Arundel County Executive Robert R. Neall heads into the last two years of his first term, saddled with lean budgets caused by state cuts, the tax cap and a recessionary economy, he says he will have to cut county government to only the most essential services.

Central to his plan is turning many services now performed by county employees over to private contractors. While the idea is largely new here, other counties have been successful in privatizing some of their services. But specialists warn that counties must choose carefully what they privatize, and should move slowly.

"What I do believe is that government should not jump blindly into privatization," former state Transportation Secretary William Hellman, who chairs the Governor's Task Force on Privatization, told a session at last week's meeting of the Maryland Association of Counties.

No one has yet proven that privatization necessarily results in savings for the government. Although Baltimore County signed an $866,000 contract with a North Carolina firm to perform medical services at its detention center, officials admit they are not sure if it will save them any money.

Nor do services necessarily improve.

Critics of privatization point to the failure of Rebound, Inc., whose contract with the state to operate the Charles H. Hickey Jr. School in Baltimore County was canceled recently after numerous escapes from the juvenile detention facility.

Privatization does not have a fan in county Sheriff Robert G. Pepersack. Delivering warrants for the domestic relations program was contracted out to a private firm this year, which he says resulted in the loss of $60,000 in federal funding. And the transportation of prisoners to District Court, a function contracted out in 1990, can be done more efficiently by his deputies, Sheriff Pepersack argues.

"So now we've got rent-a-cops running around guarding prisoners, people who were arrested by police officers," he said. "When somebody dies, then the lawsuit comes."

Mr. Neall's immediate problem is that his privatization efforts may cost some county employees their jobs. Some 1,200 unionized county employees, members of two locals of the American Federation of State, County and Municipal Employees, have clauses in their contracts prohibiting the county from laying them off and hiring private firms.

Mr. Neall is in for a fight, if Annapolis officials' recent attempt to privatize garbage collection is any gauge. Despite a yearlong study that indicated the city would save money and that the cost to residents would be less -- slightly more than $100 as compared to the current charge of $180 -- the City Council rejected the proposal, citing the 36 workers who would lose their jobs.

But Mr. Neall told the Anne Arundel Trade Council, "I don't think that a government can make decisions like that on a day-by-day basis and stay in business for long, not in this economy."

Annapolis might have fared better it if had followed the example of the Queen Anne's County school system, which privatized its food service this year. When school officials struck a deal with the Marriott Corp., they made it part of the contract that all their food service employees be hired by the company at their existing salaries.

School officials decided to turn the food service over to a private company after accumulating a $129,000 deficit at the end of the last school year. Bernard J. Sadusky, assistant superintendent of schools, said Queen Anne's agreed to pay Marriott a management fee of $65,699, but the company has guaranteed the county a $72,000 return, whether it makes money or not.

Wicomico County has had a similar success in establishing an enterprise account that funds its recreation and parks programs. The County Council went to Department of Recreation and Parks Director Gary W. Mackes in 1981 and said, "We want you to run this like a business. The user pays," he said.

The council gave him $3,000 to start the fund, which pays for all special programs in the county parks, as well as an athletic complex, two marinas and a 210-acre park featuring historical and environmental programs. In 11 years, the fund has grown to $505,000 through such sources as user fees at some facilities, concessions, selling merchandise and corporate sponsorship.

The fund has enabled facilities and services to grow in Wicomico County by more than 300 percent in the last 10 years, while the department's dependence on taxes has decreased during the same time from 70 percent to 46 percent, making the department 54 percent self-sustaining, Mr. Mackes said.

"It's really insulated us from the current recession and cutbacks," Mr. Mackes said. "I'm not going to say we weren't hurt, but we weren't hurt as much as some of my peers."

Anne Arundel County already has four privatization projects in the works: the London Town Publik House and Gardens, the pTC Office of Manpower, the Office of Economic Development and the Commission on Culture and the Arts. All four will be run by non-profit corporations now being set up.

The county is expected to subsidize the ventures initially, and any savings will come in the long run, as they raise their own private funds, county officials said.

As for the future, Mr. Neall does not want to tip his hand yet.

"I don't think there's anything definite right now, but there are a ton of things being considered," said Louise Hayman, a spokeswoman for Mr. Neall.

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