There was a time, not too far in the past, when city services were provided by, well, cities. If you were connected to water and sewer systems, they were maintained by the city and you paid the city. If you rode the bus, tram, trolley, or ferry, it was the city who punched your ticket. Garbage services were administered by municipalities. If it was a general public service that affected sanitation (sewer, garbage), quality of life (transit), or functionality (parking enforcement), the city paid for it, and citizens, in turn, paid their dues through fees or fines or whatever the structure was.
That started to change in the 1990s, but it’s here in the 2000s that we’ve really seen the whole system of public municipal resources fall apart, much to the detriment of cities themselves as individuals. Now, cities farm out these services — citizens must pay a gajillion different companies, all of whom administer things differently, the city has no real control over things like parking enforcement, and everything is tumbling into chaos, but, still, we’re promoting privatisation as some sort of good social strategy.
For cities, it doesn’t make any sense. On the surface, maybe it does. By spinning off day to day maintenance and administration costs, you obviously radically reduce their drain on the city budget. Theoretically, private firms are paying for the privilege of administering these services themselves, so instead of costing the city money, they actually generate a profit, which can be used to administer other mysterious things (oh, okay, like funding municipal courts and fire stations and police — though some of these are getting privatised too).
But in the long term, it creates some serious problems. For starters, deferred maintenance. Private firms don’t have a big motivation to take care of things, because they can always get out when the getting’s good, before their practices come crashing down on their heads. Cities, on the other hand, have an active incentive to save costs down the line by taking care of routine maintenance early (not that all cities do this, as evidenced by the state of Berkeley’s streets). Likewise, private companies are often slow to fix actual emergent problems, particularly in low-income communities.
Furthermore, private contracts often end up costing cities money in the end. They’re inefficient, ineffective, and, of course, ripe for corruption, graft, and so much more. It’s not uncommon for large amounts of money to mysteriously vanish into a private contract and never materialise — certainly not to materialise in the form of the promised end product, like, say, new parking meters, or better sewer connections, or additions to a bus fleet. Cities, meanwhile, are footing these costs — and they’re failing to audit these firms to see where all that money is going. Remember: Private companies are interested in making money (and are often accountable to shareholders). They are not in the business of things like moving poop around and picking up garbage because they love public service.
For residents, privatisation has serious costs. In addition to dealing with issues above (and things like increased taxes to help the city afford the sudden expenses associated with privatising even though their municipalities swore up and down that contracting services out would say money), they have to confront some problems of their own. It’s common to see dramatic rate hikes, for example, once services are privatised, and these companies are much less compassionate about payment. Imagine having a water payment balloon by 400% and then having a company tell you that your water will be shut off within 30 days of nonpayment of a past due bill. Cities tended to be much more flexible about shutoffs, payment plans, and negotiated balances, because they could afford to be — they were administering public utilities, not profiting from residents. Breaking even was the goal.
Working with private companies can also be unendingly frustrating when problems come up. Large corporations like Waste Management aren’t intimately familiar with individual municipalities served, and they don’t really care about consumers. They care about their contracts. If there’s a problem with garbage service or a bus refusing to pick up disabled passengers or a continually late ferry connection, it’s much harder to contact people to complain to, and even harder to get some kind of action on the issue. The shoulder shrug is a classic response — and, irritatingly, sometimes the city has to step in with problems like leaking water mains that impinge on the street, requiring public works staffers to come fix it when the administrating company won’t come deal with it. So much for the conveniences of privatisation.
Individual citizens also have to deal with bills coming from all over the place at different times, wildly variant billing policies, account administration, and bibs and bobs of things that would be easy to handle when a single agency was administering utilities, but turn into a nightmare when you’re dealing with four or five. This makes it a lot easier for bills to slip into the cracks, and a lot more challenging to dispute bills that are clearly wrong.
This is part of a systemic problem in which everything in the US is tilting funds into the hands of those who need them least — the mass transfer of wealth in this country is continuing unabated despite the stranglehold of the top one percent. This is a class issue, not just a municipal one, and it’s critical to rethink utility regulation in the interests of addressing problems like deferred maintenance and gross overbilling, because they’re huge contributors to dwindling budgets for low-income households.
Image: City Lights, John T. Howard, Flickr