More Privatization In Plymouth’s future?

PLYMOUTH — In November, voters overwhelmingly rejected a proposal to override Michigan’s 1978 Headlee Amendment and raise their property-tax rates from 11 mills to 15 mills. The increase in property taxes was proposed to cover a $1.13 million budget deficit projected for fiscal 2005. Since a tax hike is no longer an option, city officials will soon begin addressing the budget problem and virtually every idea is on the table. One possible solution mentioned publicly involves selling off city hall.

The city already contracts out for other services, such as waste recycling, garbage collection, and lawn mowing on city property, but it could do more. For instance, the public works department is still run by the city of Plymouth. Other communities, such as Oakland County’s Pleasant Ridge, contract out for public works-type services

In 1996, Pleasant Ridge awarded a contract to City Municipal Services, Inc. (CMS), a private, for-profit company that bills itself as "the Cost Effective Alternative For Municipalities." It specializes in public-private contracting in everything from rubbish collection to landscaping to data processing and building department inspections.

The CMS contract dictated that the private firm would take over all public works duties including, but not limited to, leaf pick-up, snow removal, street salting, tree removal, and tree planting. The contract also guaranteed at least 15 percent savings compared to the previous Pleasant Ridge Department of Public Works (DPW) budget of $396,000.

Furthermore, an incentive was given to produce greater cost savings: Any savings over 30 percent results in a bonus equal to half the additional savings. In addition, CMS agreed to offer employment to all former DPW employees, subject to minimal qualification requirements. Lastly, CMS agreed to purchase all of the city’s DPW equipment, which they did for a one-time payment to the city of nearly $120,000.

The privatization experience has been overwhelmingly positive, and the city of Pleasant Ridge now has access to equipment that it never could have afforded on its own, including a fleet of street-sweeping vehicles and sewer cleaning equipment. CMS has since been bought by Cityworks, Inc., a Detroit company, which has taken over duties in Pleasant Ridge.

This is definitely an example Plymouth officials should look into.

Michael LaFaive is fiscal policy analyst for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.