We chose to be more competitive.

• Author: Helmke, Paul
• Position: Fort Wayne, IN's management of its water filtration plant

This commentary was published in the April 1998 issue of Actionlines, the magazine of the Indiana Association of Cities & Towns, and is reprinted here with permission.

There is a perception among many that anything government runs is bureaucratic and inefficient. If we listen to that, we might be tempted to allow private companies to take over everything government does. But what we really need to do is take a closer look at how government operates. Allowing those private companies, whose offers seem so cost-efficient, to take over public services is tempting - specially when the service is as complex as filtering water or treating sewage. But as we examine what we do, we need to consider other ideas for optimal cost-effectiveness. Privatizing municipal services is not a panacea; the path to efficient services can take a number of routes. If we choose one alternative without exploring other options, we deprive ourselves of the opportunity to see the whole landscape.

Over the years in Fort Wayne, we have contracted many services that are traditionally public. Our electric utility was privatized in 1975. Private contractors also provide residential garbage collection, curbside recycling, yard waste collection, water and sewer cut repairs, and data processing, among other services. But it is not our only answer to cost savings.

In 1992, we were presented with the option of privatizing our city water and sewer utilities, which at first blush seemed to show great savings. Instead, we chose to be more competitive, and it worked. An unsolicited offer to privatize our city utilities' water and sewer services claimed it could save an average of $1 million a year for 10 years, and would give us $6 million of savings up front. Instead of just jumping in, I formed a Citizen Advisory Committee to study the issue in a logical manner with its own consultant. In 1994, the group recommended the current city management be allowed two years to reach benchmarks for efficiency before considering contract management for the water filtration plant. Today, not only has the plant changed its philosophy to meet those benchmarks - cutting costs and increasing service - it has handled other major challenges that arose during the past three years.

Why would a city undertake the arduous task of reorganizing its management when a private company could do it for them? One answer is that if the city's dedication is strong and it can run its services better than average...