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New Ground 38

January - February, 1995

Selected articles.


Accountably Private

By Robert Roman

George Orwell should have written a sequel to 1984, entitled 1994. In this Brave Newt World (to bring hallucinogenic Huxley into the metaphor), the idea that private enterprise is inherently more cost effective or efficient has become an article of political correctness, to be believed regardless of any evidence pro or con and without reference as to how this effectiveness or efficiency might be achieved. It helps, of course, that all the pigs at this particular trough are potential campaign contributors. In 1994, we face the next step in the commodification of politics. The first step was the destruction of political parties and the rise of a free-enterprise style politics. The next is the mad auction of public capital (or was that the first step, in the book 1884?). Now we have the auction of government itself. The final step could be a form of industrial feudalism.

In truth, there may be instances when privately contracted services would be more effective than the same services provided through municipal government. And there may be ways of doing this in a way that promotes democracy and community development. But there has not been any good tool available for municipal government to effect such a change in a rational, informed manner. The whole topic has been left open to the entrepreneurs of political cant and kickback.

The Privatization Accountability Ordinance, introduced by Chicago's 49th Ward Alderman Joe Moore in November of 1994, is an attempt to bring some rationality and accountability to the process.

First of all, the municipal departments seeking to privatize a government function must undertake a cost effectiveness study, using a uniform set of criteria. In a statement released upon introduction of the ordinance, Alderman Moore pointed out:

"...in most cases we simply don't know if privatization has really cut costs or improved service delivery because there are no objective standards in place to measure its effectiveness. The City simply does not publicize any cost effectiveness studies it may undertake nor does it publicly document the contract costs.

"There is also no evidence that the City even considers factors other than direct costs when determining whether to privatize a city service. For example, we don't know if the City takes into account the hidden costs, such as the expense of monitoring contracts and the cost of contractors using city equipment. We don't know if the City factors in future price increases. And we don't know if the city examines the economic impact job loss and lower salaries and benefits have on city employees and the further effect this has had on the economic health of our neighborhoods."

The ordinance further requires that the cost effectiveness study demonstrate a minimum savings of 10%. The contracts issued must comply with applicable anti-discrimination and affirmative action requirements and the Shakman decree against patronage hiring. The ordinance requires that contractors pay wages and benefits at a rate and level not less than that provided to City employees performing comparable tasks. The savings must come from organizational efficiency and not out of the pockets of the employees.

The ordinance also includes requirements regarding contractor eligibility, the necessity for Annual Performance Reports, assistance for displaced city employees, and city council review of proposed and existing privatization initiatives.

Not surprisingly, the Privatization Accountability Ordinance has received the endorsement of organized labor in Chicago. Following the initiative of AFSCME Council 31, the Chicago Federation of Labor endorsed the ordinance. President Michael Burton had been quoted earlier as commenting that while the ordinance was good, labor would have liked to have had input into the formation of the proposal. Nonetheless, the CFL has already begun lobbying Mayor Daley and the City Council to take action on the ordinance.

The stone requires help to start rolling. The ordinance was committed to the care of the City Council Committee on the Budget and Government Operations, chaired by Lorraine Dixon of the Eighth Ward. No hearings have yet been scheduled. While it may be unreasonable to expect any serious consideration from the City Council prior to the elections, now is the time that the Aldermen and their challengers are most vulnerable to pressure on the issue.

The Chicago DSA Executive Committee has also endorsed the Privatization Accountability Ordinance, and we urge you to make your opinions known, not just to your Alderman but to all candidates running for the City Council in your ward. If it happens that you are not sure which ward you reside in, the address label will have (for home address) your ward and precinct on the top line, i.e. "WP/O: 4927".

 

PRIVATIZATION ACCOUNTABILITY ORDINANCE

Section 1. Chapter 2-92 of the Municipal Code of Chicago is hereby amended by adding new sections 2-29-590 through 2-92-690 as follows:

2-92-590 Title and Purpose

This section shall be known and may be cited as the "Privatization Accountability Ordinance". It is the purpose of this section and the policy of the City to ensure that the residents of the City receive high quality public services at the lowest possible cost, with due regard for the taxpayers of the City and the needs of both public and private sector workers.

2-92-600 Definitions

Whenever used in sections 2-92-590 through 2-92-690 the following words and phrases shall have the following meanings:

"Privatization" means a contract between a City department and a person or firm in the private sector, regardless of whether the person or firm is a for-profit entity or a non-for-profit entity, for any function performed by personnel employed by a city department on the effective date of this ordinance.

"Displace" shall mean the layoff, demotion, bumping, involuntary transfer to a new class, title, or location, time based reductions, reductions in customary hours of work, wages or benefits of any City employee.

"Cost-effectiveness study" shall mean an analysis conducted in accordance with the standard methodology of the Office of Budget and Management comparing the projected cost of delivering the service under the proposed contract to the cost of delivering the service in-house. The analysis shall include in the projected cost of the proposed contract of inspection, supervision and monitoring. The analysis shall exclude from the cost of delivering the service in-house all overhead costs unless such costs are attributable sole to such service.

2-92-610 Privatization Requirements

Privatization of City services is permissible to achieve cost savings when all of the following conditions are met:

(a) The contracting department must prepare a detailed statement of the services proposed to be privatized and undertake a cost-effectiveness study prior to the award of any contract. Such study shall include, but not be limited to, documentation of all contract costs for each service, the total number and qualifications of all personnel to be retained under the proposed contract, and the nature and cost of the fringe benefits and compensation rates to be provided to such personnel. All cost analyses and documentation thereof shall be public documents available for public inspection and shall be filed with the contracting department, the City Council Committee on Budget and Government Operations, and the Department of Purchases, Contracts and Supplies.
(b) The projected cost savings for a privatization initiative must exceed ten percent of the cost of delivering the service with City employees.
(c) The contract must be awarded through a publicized, competitive bidding process.
(d) The contract must include specific provisions setting forth the qualifications required of the staff performing the work under the contract and assurances that staff will be hired in accordance with applicable anti-discrimination and affirmative action requirements and the Shakman decree prohibitions against hiring and firing employees on the basis of political beliefs or activities.
(e) The contract must provide that the contractor shall not pay wages and benefits at a rate and level lower than that provided to City employees performing comparable tasks.
(f) The contract must provide that fifty percent of all contract work hours shall be performed by bona fide City of Chicago residents.
(g) The potential economic advantage of the privatization initiative must outweigh the public's interest in having a particular function performed directly by City government.

2-92-620 Privatization Permitted

Privatization initiatives also shall be permissible when any of the following conditions are met:

(a) The services contracted are not available or cannot be performed satisfactorily by City employees, or are of such a highly specialized or technical nature that the necessary expert knowledge, experience, and ability are not available in the City workforce.
(b) The services are incidental to a contract for the purchase or lease of real or personal property, including but not limited to, agreements to service or maintain leased or rented office equipment or computers.
(c) A private contractor is necessary to protect against a conflict of interest or to ensure independent and unbiased findings in circumstances where an outside perspective is clearly needed.
(d) A private contractor can provide equipment, materials, facilities, or support services that cannot feasibly be provided by the City in the location where the service is to be performed.
(e) The services are of such an urgent, temporary, or occasional nature that they cannot adequately be performed by City employees.

2-92-630 Eligibility of Contractors

All contractors submitted bids must submit an eligibility report to the department overseeing the privatization contract, the Department of Purchasing, Contracts and Supplies and the City Council Committee on Budget and Government Operations. Such reports shall include, but not be limited to,

(a) documentation of compliance with Federal, State and City labor, anti-discrimination, affirmative action, unemployment, occupational safety and health, environmental protection and workers' compensation laws;
(b) quarterly payroll records listing the name, address, Social Security number, hours worked, hourly wages paid and fringe benefits paid for each employee for the last two years;
(c) the union status and representation for each employee for the last two years;
(d) the ethnic, racial and gender make-up of its workforce for the last two years; and
(e) a list of the political contributions of the contractor and its principals for the last four years.

Such reports shall be public documents available for public inspection.

2-92-640 Annual Performance Reports

All contractors awarded a procurement pursuant to sections 2-92-610 and 2-92-620 of this ordinance shall submit annual performance reports to the department overseeing the contract, the Department of Purchases, Contracts and Supplies, and the City Council Committee on Budget and Government Operations. Such performance reports shall include but not be limited to,

(a) documentation of compliance with Federal, State and City labor, anti-discrimination, affirmative action, unemployment, occupational safety and health, environmental protection and workers' compensation laws;
(b) payroll records listing the name, address, Social Security number, hours worked, hourly wage paid and fringe benefits paid for each employee;
(c) the union status and representation for each employee;
(d) the ethnic, racial and gender make-up of the workforce; and
(e) a list of the political contributions of the contractor and its principals for the last year.

Such reports shall be public documents available for public inspection.

2-92-650 Withholding Reimbursement

Where privatization initiatives are funded pursuant to sections 2-92-610 and 2-92-620 of this ordinance, the Department of Purchases, Contracts and Supplies shall include a withholding clause in the privatization contract providing the City with the authority to withhold reimbursement if the contractor fails to comply with sections 2-92-640 of this chapter.

2-92-660 Assistance for Displaced City Employees

Where privatization initiatives are funded pursuant to sections 2-92-610 and 2-92-620 of this ordinance, the department overseeing the privatization contract shall prepare and implement a plan of assistance for City employees who will be displaced as a result of the contract. Such plan of assistance shall include efforts, including training if necessary, to place displaced City employees in a comparable position within that agency or any other City agency. The plan of assistance shall include notification to the City of Chicago Department of Personnel at least three months prior to letting the contract. Such notification shall include all supporting documentation and analyses in support of the privatization initiative and a copy of the contract. The Department of Personnel shall within five business days of receipt of such notification, forward notice and all supporting documentation provided in this section to all duly certified collective bargaining representatives who represent City employees who may be displaced by such contract.

2-92-670 City Council Review of Proposed Privatization Initiatives

Any City department proposing to execute a contract pursuant to sections 2-92-610 and 2-92-620 of this ordinance shall notify the chairman of the City Council Committee on the Budget and Government Operations of its intention. The chairman of the Committee on the Budget and Government Operations shall thereupon call a meeting of the committee for a date not more than thirty days thereafter, at which meeting representatives of the City department shall explain the reasons for privatizing the city service. All organizations that represent City employees who perform the work to be contracted, and any person or organization which has filed with the committee a request for notice, shall be contacted by the Committee upon receipt of this notice so that they may be given an opportunity to appear before the Committee to comment on the proposed contract. The City department submitting the proposed contract shall provide committee members seven days before the meeting all data and other information relevant to the proposed contract and the application of the standards and criteria set forth in sections 2-92-610 through 2-92-640. No contract shall be executed until thirty days after the adjournment of the aforesaid meeting.

2-92-680 City Council Review of Existing Privatization Initiatives

The City Council Committee on the Budget and Government Operations shall conduct annual hearings on all contracts executed pursuant to sections 2-92-610 and 2-92-620. The City department overseeing the privatization initiative shall provide to all committee members seven days before the hearings all data and other information relevant to the privatization initiative and the application of the standards and criteria set forth in section 2-92-610 through 2-92-650, including, but not limited to, data setting forth the cost-effectiveness of the privatization initiative.

2-92-690 Severability

If any provision, clause, sentence or paragraph of sections 2-92-590 through 2-92-680 or the application thereof shall be held invalid by a court of competent jurisdiction, such invalidity shall not affect the other provisions of this ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this ordinance are declared to be severable.

Section 2. This ordinance shall be in full force and effect after its passage and approval.


New Party Organizes

By Bob Roman

On Saturday, January 14, the New Party in Chicago took another step in its effort to establish itself as a political force by holding a major outreach meeting directed at Chicago's Left. About 100 people, with sizable delegations from DSA and CoC among others, heard Bruce Colburn and Elaine Bernard preach the gospel of the New Party. The audience was also introduced to the New Party's first candidate in Chicago, Michael Chandler, who is running for Alderman in Chicago's west side 24th ward. The meeting was held at the meeting hall of SEIU Local 880, a local that is tackling the extremely difficult task of organizing home health care workers in Illinois. SEIU Local 880 and ACORN share office space.

For me, Bruce Colburn was the more interesting speaker. Bruce Colburn is an officer of the Milwaukee Central Labor Council and the Chair of the local New Party affiliate in Milwaukee. He had a great deal to say about holding candidates accountable, maintaining a mobilized constituency, and the role of the labor movement in the process. Some of his comments were intriguing. He mentioned, for example, that labor in Milwaukee had begun canvassing its members to organize community groups.

The New Party movement has helped elect a number of candidates in Wisconsin, and it has united with a number of other left groups in Wisconsin to form the New Progressive Party of Wisconsin. The New Progressive Party has secured ballot status in the state.

All who had seen Elaine Bernard at last year's Midwest Radical Scholars and Activists Conference were psyched up to see her again. And she gave a good performance. Elaine Bernard gave a cogent exposition on the nature of politics and the way the New Party uses this in its strategy.

The near term future of the New Party in Chicago is represented by Michael Chandler, candidate of the 24th Ward. Legal and illegal dumping, crime, housing and the Privatization Accountability Ordinance are the major issues in Mr. Chandler's campaign. There are ten other candidates in the contest for Alderman of the 24th Ward. The incumbent is Jesse Miller, Jr. If Michael Chandler wins, the New Party will have established a foothold in mainstream Chicago politics.

The Saturday meeting was clearly intended to be a major step in organizing the New Party in Chicago. The next step is a meeting scheduled for February 1 at which the New Party will choose local officers. It's clear that the New Party is hoping that enthusiasm generated at the Saturday meeting will help expand the New Party's base.

In Chicago, the New Party's biggest asset and biggest liability is ACORN.

Like most organizations, ACORN is a mixed bag. On one hand, in Chicago, ACORN is a group that attempts to organize some of the most depressed communities in the city. Chicago organizers for ACORN and organizers for SEIU Local 880 have been given modest monthly recruitment quotas for new New Party members. On the other hand, like most groups that depend on canvassing for fundraising, it's easy enough to find burned out and disgruntled former employees. And ACORN has not had the reputation for being interested in coalition politics- until recently and, happily, not just within the New Party. In Chicago, ACORN has been working with the National Training and Information Center on housing issues, and Equip for Equality in challenging Illinois' inaction on "Motor Voter" registration. ACORN has also become a major participant in Chicago Jobs with Justice.

But the nature of Chicago ACORN is secondary to the inevitable dynamics of the situation. As the single 800 pound gorilla in the Chicago New Party, it doesn't leave a lot of room for newcomers to participate except on ACORN's terms. This will make it difficult for the New Party to have a life apart from ACORN. The element that seems to be present in Milwaukee but absent in Chicago is organized labor.

Nationally, the New Party claims between 3,000 and 4,000 members and credit for electing several dozen candidates in various localities around the country. While the Saturday meeting had much to say about candidate accountability, it's hard to assess exactly what these victories mean. The New Party is not dogmatic about establishing its own ballot line and is perfectly willing to support worthy Democratic, independents and (presumably) Republicans. In essence, the New Party functions as a Political Action Committee on steroids. As such, it represents the first truly canny, grass-roots attempt at dealing with the non-party, candidate centered electoral system in our country, but it makes "success" rather more difficult to measure.


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