Why Should Carlsbad Outsource Jobs?

For San Diego's North County Times

A year ago we learned that Carlsbad is considering outsourcing city services, but to this date we haven't been told why.

At a July 2011 workshop, City Council members heard a presentation by Tom Guilfoy, the Director of Competition in Carrollton, Texas ("City to explore some outsourcing of government work," North County Times, July 19, 2011). He told the council his city saved at least $25 million over nine years under its Managed Competition plan.

Liking what they heard, the council directed City Manager Lisa Hildabrand to conduct an internal review to see whether outsourcing could make city government more businesslike.

But a closer look at why and how the Texas town adopted outsourcing suggests Carlsbad's city leaders may have found a solution in search of a problem.

In an April interview with the Reason Foundation, Carrollton City Manager Leonard Martin explained he was hired in 2001 to help the city close a $2.5 million budget deficit. He created the position of Director of Competition, hiring Guilfoy from the private sector. Guilfoy introduced Managed Competition for all city services, requiring each to prove it could deliver "cheaper, better, faster and friendlier service" than private businesses contracted to do the work.

The first objective listed under Carrollton's 2002 goal to transform the city's culture into a competitive service business was to "achieve high citizen satisfaction with services and organizational values."

When I asked Guilfoy a week ago whether he could produce evidence the objective had been met, he told me Carrollton, unlike Carlsbad, doesn't do citizen satisfaction surveys. "We know intuitively that they like the results," he explained, adding, "Citizens everywhere want better quality services at lower prices. We have delivered on that promise."

In his Reason Foundation interview, City Manager Martin was asked whether residents were happy with the city's changed business practices. "We know residents are pleased with what's happening," he explained, "because there's no political turmoil."

For city officials who take such pride in running their city like a business, it's hard to understand why they have no interest in customer feedback, especially after investing so much in the program's administration.

Carrollton may no longer be running a deficit, but the city's financial condition, as posted on its website, is nothing to crow about. While Carlsbad's growing general fund balance is projected to be over $53 million this year, 47 percent of its spending plan, Carrollton projects a $2 million decline in its general fund balance over the past three years to $12.6 million, a mere 16 percent of its budget.

So the question remains: Why would Carlsbad, with its enviable record of fiscal responsibility and customer satisfaction, want to emulate a business model forced on a Texas town as life-support for its failing city budget?