What Happened?
Monroeville, Pennsylvania, is considering outsourcing its animal control duties to cut expenses by more than $15,000. The city is looking into privatization after years of increasing animal control costs.
Goal
Monroeville has always been in control of its own animal control duties, and just recently began looking into privatizing the municipal services due to annual rising costs. Like many other cities, Monroeville could relieve its public works department of animal control duties, and outsource the task to a private company for a reduction in costs, Trib Live reported.
Currently, Monroeville has $119,000 set aside in its 2015 proposed budget for in-house animal control services. Last year, Monroeville spent $115,900 on the in-house animal control department. The single department employee was paid $50,100 in regular pay and $20,700 in overtime. Other nonbudgeted, long-term costs are estimated near $150,000 annually. The city believes if it privatizes animal control duties, it will save more than $150,000 annually in staff and operational expenses, Trib Live reported.
In its research, the Monroeville city council learned other municipalities in the region are spending around $8,000 annually on animal control services by outsourcing to private companies. These providers often contract with several municipalities in a given area for a fraction of what it costs for in-house services.
Privatizing Water
Similarly, several other cities in Pennsylvania are considering selling or leasing their assets to balance budgets. In Reading, for example, the municipality’s water system is estimated to be worth $200-$300 million, which would be valuable cash to have access to in light of a $6 million budget shortfall currently. The city could sign a long-term lease with a private buyer requiring a significant upfront payment, Keystone Crossroads reported.
Middletown approved a 50-year lease deal with United Water in September that generated $43 million in immediate revenue. The borough has $10.8 million in unfunded pension liabilities and post-retirement benefits, and another $2 million in debt – both of which spurred the decision to privatize the water and sewer systems. The city opted for the lease deal to avoid raising electric or tax rates, or cutting the city workforce, Keystone Crossroads reported.
Case Study
In The Public Interest conducted a case study on a city that sold its water system outright to a private company, and the public response that followed. The California American water Company bought the Felton, California, water system in 2002. After completing the purchase, water rates increased 78 percent.
In response, local residents formed the Felton Friends of Locally Owned Water with support from the Santa Cruz County Board. The group put a property tax increase on the local ballot to raise $11 million and buy back the water system. By 2008, The San Lorenzo Valley Water District purchased the Felton water district and 250 acres of forested watershed land for $10.5 million. When the water system returned to public ownership, customers’ base bimonthly water bills dropped from $183 to $86. Though the San Lorenzo Valley Water District raised rates by 30 percent for the next three years, the increases were significantly less than under private ownership, In the Public Interest reported.
To Privatize or Not To Privatize
Gov1 offers extensive coverage of privatization at the local level, some instances causing more headaches while others generate significant revenue.