Facing a $25 million budget deficit next year, Baltimore took its first step yesterday toward possibly hiring private companies to handle city services such as trash collection.
The city Board of Estimates voted 4-1 to spend $137,000 to hire two consultants who will study the possibility. The vote came after city unions angrily opposed the move, saying it would lead to extensive layoffs of the city's 25,000 employees.
Cities such as Indianapolis and Philadelphia have gained national attention for allowing private companies to compete with city workers for service contracts. Federal agencies such as NASA have begun hiring private companies. A company operates NASA's mission control center in Houston.
City union leaders -- who could play a key role in getting out the vote for this year's mayoral election -- warned mayoral hopefuls on the five-member estimates board that supporting the move could have political ramifications.
"We remember our friends," said Glenn Middleton, president of Local 44 of the American Federation of State, County and Municipal Employees, a city union representing 5,000 workers. "Privatizing to us is a death threat to city employees."
City leaders have debated opening City Hall doors to private companies for the past decade. Mayor Kurt L. Schmoke, who announced last month that he would not seek re-election this year, supported the study yesterday.
The mayor recently formed a city efficiency task force, the Millennium Group, which recommended hiring the consultants. Council President Lawrence A. Bell III, considering a run for the mayor's seat, voted against paying for the study, saying that he wanted to remain consistent in his opposition to privatization.
City Comptroller Joan M. Pratt, also considering a mayoral bid, voted to approve the contracts, saying city efficiency should be the ultimate goal even though she believes city workers can do the job at the best price.
Under the contracts, the city will spend $50,000 to study five areas: worker compensation, personnel, solid waste collection, fleet management and building maintenance. Another $87,000 will be spent to create a program allowing a private company to collect trash from 7,000 to 10,000 city homes.
Much of the debate over hiring private companies targets the city's Public Works Department. In May, the Calvert Institute for Policy Research in Baltimore released a study showing that the city had 5,500 more workers than six comparable cities.
The largest excess, according to the study, is in the city's Public Works Department, which has about 6,000 employees, four times the average of the other cities. The report estimated that the additional employees cost city taxpayers $224 million a year.
Public works officials have criticized the study for failing to take into account that Baltimore handles water and wastewater services under its department.
In supporting yesterday's measure, Schmoke, who in the past has vetoed privatization bills, noted that state legislators are threatening to cut city funding unless spending can be cut.
"More than a third of our money comes from resources we don't control," he said. "And we keep thumbing our noses at them."
George A. Nilson, president of the Baltimore Homeowners Association, has pushed the city to look at hiring private companies. The city spends $14,000 a year to maintain police cars and pays city trash collectors for eight hours of work even if they finish their routes in six hours, Nilson said.
"Private companies would not tolerate that," said Nilson, who represents 200 neighborhood groups and about 800 city household members. "We don't believe in carte blanche privatization, we just think the city needs to take a look at this."
The contracts were awarded to HDR Engineering Inc. and David M. Berkey & Associates. The studies are expected to be completed by August.
Pub Date: 1/07/99