Public Employee Press

Part 1 in a series of articles on privatization and outsourcing
White papers get results
• city cancels temp contracts • tax amnesty brings in $40 million • vendor dumped in school food rip-off

By GREGORY N. HEIRES

The city is cutting back on its use of temps, bringing in twice what it predicted through a tax amnesty, and recently acknowledged that the public schools overspent millions of dollars on outside food contractors.

The actions come a year after DC 37 white papers pointed specifically to these areas as sources of vast potential savings and income for the city.

DC 37 Executive Director Lillian Roberts launched the “white paper” investigations, which have exposed government waste resulting from contracting out and using expensive consultants to do the work of civil servants. “The city’s actions are proving our central message that civil servants are more efficient than contractors,” she said, “although management is not likely to credit the union for these huge savings of tax dollars.”

“We are fighting for work to be brought in-house both to protect the members’ jobs and to promote good government practices,” said DC 37 President Veronica Montgomery-Costa, who is also president of Dept. of Education Employees Local 372.

Union members more efficient
She pointed out that years ago much of the work now done by food vendors was performed more efficiently in-house by union members. In January, the Dept. of Finance announced that a tax amnesty program brought in more than $40 million to the city’s coffers, double the amount projected.

The union called for the tax amnesty in its white paper campaign. The drive also recommended canceling outside contracts and cutting back the “shadow government” of an estimated 100,000 consultants and temporary workers.

The city indicated that it would move away from privatization when it unveiled its new $45.7 million spending plan in January. By replacing consultants with municipal employees, the administration hopes to reap significant savings, according to Budget Director Mark Page.

“We are concentrating more intensively right now on relying less on outside contracts and more on directly hired personnel,” Mr. Page said.

At the Dept. of Social Services, the city will replace 1,000 temporary positions with municipal employees. City employees will also fill 40 posts now staffed by temps at the Dept. of Health and 59 positions at the Dept. of Homeless Services.

In addition, the fiscal year 2005 budget eliminates nearly $1 million in contracts for temporary services at the Dept. of Youth and Community Development, the Office of Labor Relations, the Dept. for the Aging and the Dept. of Education. In another move away from privatization, DOE seems ready to scrap a plan to replace 486 in-house maintenance workers with contractors.

“Eliminating the temps reflects what we have said all along: Using civil service workers would either save money or be cost neutral,” said Henry Garrido, assistant to Associate Director Oliver Gray, who coordinates the white paper project.

The Dept. of Education acknowledged the scandal involving its $400 million school lunch program Feb. 4 when it released a report by Richard J. Condon, its special commissioner of investigation. The report found that tens of millions of dollars were wasted on inflated contracts. Vendors took advantage of inaccurate estimates on food needs and prices, a practice that while apparently not illegal, could be curbed by improved bidding procedures.

The report singled out Brooklyn-based H. Schrier &. Co. for overpricing its food items by $8 million over two years. A DC 37 white paper released in December 2002 pointed out that the firm was overcharging the schools compared with the cost for city workers to do the job.

“This shows, once again, that contracting out is more expensive than having dedicated, accountable city workers do the job,” Ms. Roberts said.