A San Diego city audit shows problems with a Water Department program designed to cut costs. But city staff say the so-called “Bid to Goal” program still saves the city millions.
The program rewards city employees when they find ways to do the work for less than private industry might charge.
But the audit showed city employees overestimated savings by 11 percent.
Councilman Carl DeMaio, an advocate of privatizing city services, says the audit reveals serious flaws in how bonuses were awarded.
“Twenty-eight million dollars have been paid out in bonuses since 2006, and in the same period, water and sewer rates have gone up by more than 35 percent,” DeMaio said.
But Jim Barrett, director of Public Utilities, said the program resulted in real savings to the city of around $100 million over three years.
“If you came to me and said, “If you’ll give me $28 million, I’ll give you $116 million back, I’d be a fool not to say ‘please,’” Barrett said. He said the city is not sophisticated enough to outsource clean water services safely to companies operating with a profit motive without “being taken to the cleaners.”
Clean water advocates with Food and Water Watch said the cities of Stockton and Atlanta privatized their city water services and had to cancel the contracts because of rising rates and falling water quality.
Councilman Kevin Faulconer said he’d like to see employees compete against real bids from the private sector, rather than hypothetical “mock bids.”
"Because," he said, “if someone really had the opportunity to put their bid up to the employee bid, they might sharpen their pencil a little bit more and fine tune things more than just a mock bid.”
San Diego’s audit committee members agreed to tighten oversight of the incentive program, but postponed a debate over how to benchmark employee efficiency.
