The City of Omaha’s budget woes have prompted citizens to wonder if the city should look at privatizing more services to save money.
Omaha already contracts for some services, including garbage pickup, and is studying whether it makes sense to do that in other areas.
The city, for example, is examining whether management of all city-owned golf courses should be turned over to private operators. Omaha does that with two courses now.
It isn’t just the city that’s exploring such arrangements. Leaders in the Morton Park neighborhood have proposed private management of the park’s swimming pool.
City Council President Garry Gernandt said Thursday that the neighborhood is working with the YMCA to create a partnership that would let the city-owned pool stay open next year. Any agreement would need city approval.
Figuring out how much money the city could save through private contracting is tricky, officials say. It’s not a given that contracted services would be cheaper.
Officials also question whether citizens would want certain services fully privatized. City Attorney Paul Kratz cited the example of trash collection, currently provided through a city contract with Deffenbaugh Industries.
Garbage service now costs the average taxpayer about $9 a month. The cost could more than double if households had to hire their own private hauling services, as is done in some cities.
Kratz said there are financial and legal matters that must be considered before the city contracts for services.
Ron Gerard, a spokesman for Mayor Jim Suttle, said it doesn’t make sense to do unless it’s cheaper or the contractor can deliver better service.
“That would probably be the driving force behind whether a public-private partnership is viable,” Gerard said. “If it costs less money or there’s an increase in efficiency, then it is worth it.”
Privatizing services isn’t always greeted with cheers from the public.
Chicago found that out recently when it privatized the city’s parking meter operations for $1.2 billion in revenue. Parking rates ballooned, and drivers have complained about broken meters and changes in meter times.
Steve Scarpello, Omaha parks and recreation director, said the city thinks there is a market for private groups to run golf courses.
Starting today, the city is raising fees at all city-run courses by $2 per round. That increase was made in order to keep the nine-hole Westwood Heights course open and to help with the $760,000 shortfall in the city’s golf fund. The city has hired a consultant to study the financial impact of private management at the city’s seven other courses.
On the other hand, the city believes there’s little private interest in running swimming pools and ice rinks. The city-run pools and rinks operate at losses.
Kim Harman, city recreation manager, said the city’s 17 pools brought in about $400,000 in fees last year. But the city spent more than $800,000 on pool operations.
Similarly, the two ice rinks — Motto McLean and Benson — had $440,000 in revenue, but the city spent more than $500,000 running them.
Gerard said the city has not discussed contracting out the two city-run ice arenas. The Moylan IcePlex at Tranquility Park is on city land but already is privately run.
The city is allowed to contract for services at recreation areas, but state law prohibits Omaha from selling parkland. That means the city could not get a windfall from selling golf courses or ice rinks.
The law also could make it tricky to sell city facilities such as parking garages.
Kratz said parking garages generate substantial revenue for the city, especially after construction bonds are paid off. Omaha already hires companies to manage the city’s seven parking garages and five lots.
The city estimates that it will spend $2.4 million on parking facilities in 2010, much of it on management contracts. Expenses will be covered by revenue estimated at $4.2 million. The balance will be used to pay off construction bonds.
At Suttle’s direction, the Public Works Department is looking at hiring private plow operators to assist city crews with snow removal in residential neighborhoods.
Scott McIntyre, city street maintenance engineer, said the city will spend $4.3 million in 2010 for snow removal. That cost includes labor, fuel, vehicle maintenance and supplies. It also includes about $400,000 to rent snow equipment and hire private operators for heavy storms.
The Mayor’s Office said extra outside workers could be hired to speed up plowing. Saving money would be secondary. Snow removal is one of the top complaints to the mayor’s hot line, Gerard said.
“At this point, we’re still talking internally about the form the contract would take,” McIntyre said. “The devil is in the details in terms of how such contracts are written and what risks fall back on the city and what risks are the contractors willing to take.”
Contact the writer:
444-1149, tom.shaw@owh.com
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