WHEN IT COMES TO PRIVATIZATION — and deprivatization — it's a tale of the haves and have nots. In the late 1990s and early 2000s, possibly in reaction to recessionary budget cuts, several cities and counties outsourced the operation of their solid waste services and facilities to private contractors. Privatization's silver lining, they reasoned, offered higher productivity, often at cheaper costs. Privatization of various types of solid waste activities was growing at a rate of about 1 percent per year, according to a R.W. Beck survey at the time.
Yet recently, several communities across the nation have been saying what's mine is no longer yours — even if they initially said a private contractor could have it. For example, Washington is one of several cities and counties that recently deprivatized its recycling services ostensibly to increase the residential recycling rate while improving services. Lubbock, Texas, also has been slowly deprivatizing its collection services. In 1995, the city hired Browning-Ferris Industries to provide one-third of its residential trash collection services. But when the contract ended, it opened the bidding to handle 40 percent of the city's residential waste. The city sanitation department won the contract by offering a deal at about half the cost that other private haulers were proposing.
Indian Givers, you say?
The reality, however, is that government officials generally say their decision to deprivatize solid waste operations is due to several factors, such as a competitive bidding opportunity, unstable market forces, improved internal processes or a combination of those.
The Los Angeles-based Reason Public Policy Institute, which studies privatization trends, says the public sector has advantages in winning services because it has lower capital costs, pays little to no taxes, does not have to earn a profit and is exempt from certain laws and regulations. On the other hand, the private sector has a competitive advantage because of its ability to raise capital without raising taxes. And both sides have proven that they can be equally competent in providing solid waste services.
Truth be told, Indian givers aren't the bad guys they're made out to be. The saying came about because Native Americans, who did not use currency, gave gifts when trading goods. No one gave a gift without expecting an equivalent value in return. If the receiver could not reciprocate, the gift was returned.
Similarly, communities would not consider privatizing or deprivatizing if the value of the services was everything it was promised to be. When cities or counties consider either option, the message to the solid waste operation is the same: The customer is unhappy with the service. When they award either their own department or a private contractor the gift of providing solid waste services, like the smart Indian, they expect something just as valuable in return.
The author is the editor of Waste Age