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Managed Competition In The City Of San Diego

Managed Competition In The City Of San Diego

GLORIA PENNER (Host): Just days after the primary election, the next big political battle between labor and business is already taking shape in the city of San Diego. The so-called "Competition and Transparency in City Contracting" initiative is likely to be one of the most debated measures on the November ballot. Joining me to analyze the details of the proposed ballot measure are David Rolland, editor of San Diego CityBeat; and Andrew Donohue, editor of voiceofsandiego. Gentlemen, welcome.


PENNER: I left out the .org – Ok, so let me start with David. What would the managed competition initiative actually do?


DAVID ROLLAND (San Diego CityBeat): Well it would allow more and easier outsourcing of city services to the private sector. It would also repeal the city’s living wage law, which has been on the books for about five years now and was very hard fought and kind of a milestone for economic justice advocates in this city. And it would essentially ban PLAs, project labor agreements, that are agreements between a government and labor advocates.

PENNER: But, Andrew, the primary election is barely over. Why is the measure being proposed so early in the next election cycle?

DONOHUE: Sure. Well you heard Dave just list off all the things that are actually in this bill – I mean in this initiative. It’s a powerful cocktail, really, of all sorts of anti union or sort of pro business, pro contracting measures. So you just have a really, really powerful mix of things at stake. And so there's a lot of people playing really hard for it right away.

PENNER: Well San Diego city councilman Carl DeMaio leads the efforts to gather the necessary signatures to qualify this initiative for the November ballot. So we asked him what motivated him and here's what he had to say.

CARL DeMAIO (San Diego City Council, District 5): We need to start looking at new ways of doing business and the best way to do that is to open city services up to competition. By having the power of competition or competitive bidding on city services, I think city employees will be forced to renegotiate high-cost benefits such as pension benefits that are just not sustainable and they'll have to learn new business practices in order to win the competitions. That's, I think, going to be a critical element of our fiscal reform package if we're to turn the city around; having a real competition program in the city's budget. Voters overwhelmingly passed proposition C in 2006 to require the city to use regular competitive bidding on city services with the exception of police and fire. And so four years have passed, not one city service, not one function not even one taxpayer dollar in the city budget has been subjected to managed competition under proposition C.


PENNER: San Diego City Councilwoman Marti Emerald is an outspoken opponent of the proposed measure. So we asked her why she's against it and here's what she had to say.

MARTI EMERALD (San Diego City Council, District 7): The intent of this is to make outsourcing easier for big businesses that want to cash in on tax dollars. And the way to do it is to eliminate the cost, or cut the cost, of labor. And so it would be about eliminating the living wage ordinance. Five years old here in San Diego, very successful, and a way to help lift people out of poverty and give them a step up toward the middle class. They're paying eleven dollars an hour plus the equivalent of two dollars an hour for health insurance. This is not exorbitant; it's not a giveaway. It's paying what we think is low end of a living wage to people who work very, very hard for this city. And to take that away is greedy and it's mean spirited, and if that's what they want to do just say it in the ballot initiative. Make it the living wage repeal initiative, but don't couch it in terms of transparency and open government because it's neither.

PENNER: So councilwoman Emerald says that the title is misleading. What do you think?

DONOHUE: Well almost everybody who’s looked at this thinks it does repeal the living wage. And Carl DeMaio, who we’ve seen speaking today and for years is never really quiet on anything and he seems to be very mum on answering that specific question right now.

PENNER: But it’s interesting that the voters already approve proposition C in 2006, which requires city jobs to be outsourced for managed competition. So why hasn’t that happened?

ROLLAND: Well it requires the city to set up a process where – set up a competition between city departments, you know, employee units and the private sector to see who would win those jobs. But the reason it hasn’t been fully implemented is because it’s been bogged down in negotiations between the city and the labor. There are a lot of explanations for why it has been bogged down. Some people blame former city attorney Mike Aguirre, some people blame Jerry Sanders, some people blame the unions.

PENNER: But it’s bogged down.

ROLLAND: But it has bogged down, yeah.

PENNER: Ok. But councilwoman Emerald says this isn’t about labor unions versus non-union. She says that it’s about what's good for the community – a living wage paying health benefits. Is it possible to have competitive bidding for city jobs and a living wage?

ROLLAND: Yes. Yes, that is. It is possible to do that if you set up a playing field where… set up the competition so that you keep your living wage and you require the private businesses that ultimately might win contracts, you require them to you know, pay a certain wage and supply certain health benefits. Yeah, it’s certainly possible. You know, this is really ideological. Carl DeMaio will say that it’s really about saving the city money. It could save the city money depending on how many services are outsourced, how little you pay those people who will ultimately do that work, and then the more jobs you cut from the city employment roles, the lower your pension costs are going to be in the long term. Certainly. But I think he overstates the impact on the budget. This is really about Carl DeMaio. He is the pied piper f small government. He is a disciple of Grover Norquist, who famously said that you want to shrink government down to the size where you can drown it in a bathtub. And I think that’s what this is about.

PENNER: So you heard his opinion. It’s about small government. But there are people saying that it’s also anti labor.

DONOHUE: Well it is. What it would do is it would ban these project labor agreements that we’ve hear so much about, which Chula Vista just did in June. And not only that, so you've got the repealing of living wage and then you’ve got managed competitions. So all these things are really striking at the heart of city employees, who by and large are union workers.

PENNER: Well we’ve already seen for example that you mentioned Chula Vista where the voters approved proposition G, which would ban the living wage requirement. And proposition K in Oceanside, which would make Oceanside a charter city – give it power. So how strong is labor in San Diego right now?

DONOHUE: I think we’re going to see a huge test. And those were sort of in almost secondary cities compared to San Diego. Right? In Oceanside and Chula Vista.

PENNER: Second and third largest.

DONOHUE: Exactly. So not to take anything away from them, but now were going to see sort of I think a real key battleground here in the city of San Diego. And I think that’s the ultimate test – to see if they can really fight this, because it isn’t just a project labor agreement. It’s all those other things we listed too.

PENNER: Your concern that you’ve expressed to me is that this is called a transparency initiative but it’s anything but transparent.

ROLLAND: Well I just think that the more you outsource to the private sector, the less the public is able to scrutinize where their money is going. You know, if it’s just the city governments spending their money there are rules where the city has to follow in terms of transparency. The more you outsource this work to the private sector, the fewer, the less stringent the requirements for public disclosure of what those companies are doing with that money.

PENNER: So it’s really going to be up to the people to decide whether that’s what they want or not.