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Outsourcing Done Right for Local Government

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In recent years local government administrators have experienced plenty of stress. They've been dealing with rapidly diminishing revenues, expansive and expensive workforces, vocal organized labor, elected officials and the mandate to deliver essential services while cutting taxes.

But, before the stress, they had a pretty nice run. Let's face it, from the late nineties until about 2005 they had exponentially increasing tax revenue or as we say in Miami - "coño como tenían dinero". With plenty of cash in their general fund, they did what most government administrators do. They increased government by expanding services.

Fair enough. Everyone wants a robust portfolio of services. However, some public administrators got into the strange practice of spending your money by trying to match the private sector. The phrase "being more like the private sector" entered the vernacular but these good natured folks misinterpreted what it meant. They missed the point.

To start, "being more like the private sector" doesn't mean mimicking services that the private sector offers at a higher price, including pensions, merit pay, civil service rights, Department Directors, Assistant Department Directors, and Assistants to the Assistant Department Directors. No, that's not it. It means offering a good service efficiently and at a value to the customer, the individual paying for it, or in this case, the taxpayer.

For example, many administrators implemented services like 3-1-1 call centers. For those of you who don't know, 3-1-1 is the easy-to-remember access to non-emergency municipal services or a Citizen Information Center. Basically, it's a customer service hotline and a good thing. It provides a fast, simple and convenient way for residents to get information from their local government. Residents get one-on-one personal customer service in various languages by dialing one easy-to-remember number.

Well, unfortunately, some administrators implemented this service by building facilities, leasing or purchasing expensive call center equipment, entering into long-term maintenance contracts and hiring a lot of call center staff to take your calls at all hours at the night.

The same service could have been offered more efficiently and at a value by outsourcing it. I'm not saying to outsource the call center to India, the Philippines or Transylvania for that matter. But, if an administrator is smart, they would have a private company offer the same 3-1-1 service with the stipulation that they must be located in the community they serve and only employ residents of that community as the call center's staff and administrators. This provides better value, creates jobs and keeps the dollars in the local economy.

Local governments can also look at outsourcing some of the more traditional government functions. For example, the public school system's primary mission is to educate our students and take care of our teachers. If that is their goal, why should they expend resources trying to run a business transporting students? Wouldn't it be better for our teachers and kids if student transportation were outsourced to a national company that could leverage the significant economies of scale, global resources, capital investment, and expertise in safety and systems for transportation solutions? I think so. They too could be mandated to only hire local drivers and maintenance workers. By doing so, our public school systems would be able to invest more money in our teachers and students, which is what the families depend on them for.

Now, before I go too far, there are some core services that government should clearly not outsource. Public safety is number one. We need our cops on the street, in uniform, and ready to do the job whatever it takes. The last thing we need is a private corporation taking over a police department. That type of outsourcing could open the doors to some kind of future dystopian nightmare. Scary! But there needs to be a dialogue on other services as well.

If done right, outsourcing provides the best of both worlds: a robust portfolio of services offered to the taxpayer at a price they can tolerate and, more importantly, afford.