Going Private

Taxes, it is reported, now claim more than half of all of America's collective earnings. With this income, the government builds roads, wages war, imposes restrictions and generally keeps the ship of state afloat. In doing so, the government employs entire departments of people supervised by layers of bureaucrats who do not ordinarily answer to shareholders, investors, partners or anyone else who demands real efficiency.

Can you and your business beat them at their own game? Probably, because their game is your game, and your game skills have been honed by the need to be profitable.

Privatization is the act of a government contracting for services it has performed in the past to be performed by a non-government business. Government continues to collect the taxes to pay for the services and still has a responsibility to the taxpayer to assure the services are performed in a competent, timely manner. But the people performing the services, and their management, are not government employees.

There are readily apparent benefits to privatization. The two essential reasons for business failure are managerial incompetence and lack of capital. Violate either of these tenets and any business will fail. Consequently, business owners, to stay in business, work hard to assure they have the most able people working for them they can possibly find and afford.

Governments, on the other hand, often hire people based upon test scores or on how much work the applicant did on the last political campaign. Once in place, these people (regardless of competence) are often difficult to shake loose. Business people, to assure adequate capitalization, minimize expense and maximize efficiency.

Government, by definition, cannot be undercapitalized since it has the ability to tax and the ability to enforce that tax with property seizures and jail. Because it can't fail, government has no incentive to economize. Privatization introduces this important incentive into the mix.

Don Stilwell, manager of Lee County, recognizes these essential differences between government and business, and the resultant need for privatization. "It's been said we do not confront things like business people," he says. "But it's not true now."

Saving Grace

Stilwell is enjoying a four-year tenure in Lee County government, a survival period almost unprecedented. In part, his longevity is because he understands the needs for privatization and is actively jobbing out everything he can. When he started, the Lee Board of Commissioners was forecasting an annual deficit-in business terms, a loss-of more than $29 million.

"We have addressed that through privatization," he says. "Now we've eliminated the deficit and reduced the county's millage

The county is now looking into the cost-effectiveness of using private companies in the facilities management area, which employs 64 workers and has an annual budget of $3 million.

Dr. Richard Woodruff is the city manager of Naples. In the past six years, he has reduced the city workforce by more than 12 percent by outsourcing (another word for privatization) street paving and maintenance, and landscape upkeep on the city's well-planted medians.

"The city council said they wanted city government run like a business," he says. "Every council since '91 has been supportive. They seriously want us to look for more efficient ways to do things and increase the quality of service."

Patrick Yancey is the general manager of Gulf Disposal in Lee County and of Waste Management in Collier. Both concerns perform privatized functions, picking up trash and running landfills. A few years ago, he chaired a task force in Martin County that reviewed each and every department for privatization. His committee's recommendations: with few exceptions, let the departments compete with outside companies doing the same work in the private sector. Each department presented a proposal, as did the outside companies. Yancey reports, "It resulted in a $4 million savings and a reduction of 20 government jobs."

Yancey sees competition as adding new vigor to civil employees who may have grown complacent. "The status quo is comfortable," he says. "But in business change is good. You must be able to manage the change."

In Lee County, competition forced the sharpening of government pencils at the county-run Shady Rest Nursing Home. The employees there were forced to compete with 130 national firms-and won. Although the home wasn't privatized, the possibility of privatization caused previously undiscovered efficiencies.

Most often, though, the marketplace-sharpened private company wins. In Naples, Woodruff reports a 70 percent saving in the cost of reading city water meters. He jobbed it out to Florida Power and Light, who already had representatives reading electric meters. And in Lee County, the in-house staff needed $42 million to provide utility service to local residents. An outside company now does it for $27

Getting Some

What can be privatized? Just about anything. While in Martin County, Yancey discovered only a few areas in which privatization wasn't appropriate. "Certain things, like police service, should not be privatized," he says, "but the maintenance of the police vehicles or the feeding of inmates at the jail should be considered."

Stilwell says all doors are open. "We look at everything," he says. "We will consider anything."

Woodruff offers a practical example. "A year-and-a-half ago, we were approached by a man who is in the tree moving business. 'Everyday, I move trees,' he said, 'and I see city crews moving trees. Give me an opportunity to bid on that.' "

The man got the contract, and it was good for Woodruff, too. "We eliminated two large trucks and three positions [from the city payroll]."

Yancey says that getting government business is not too different from getting any other kind of business. He says that if a company wants to provide a service now performed by government, it should make calls on department heads, prepare presentations and follow up, just like with any other customer.

"Government is a customer, a big one," he says "and an outside business needs to prove it can be sensitive to its needs."

Stilwell promises to be very receptive. "Tell us what you can do. Send us a letter," he says. "We want to talk."

Woodruff agrees. "Let us hear how they think they can benefit the city."

The Downside

Not every privatization effort is entirely successful. Perhaps the worst case locally is the ongoing fracas in Estero over the aborted privatization of fire safety services. Two-thirds of the fire board has been replaced by Governor Lawton Chiles, criminal charges alleging backroom politics are pending, and former Fire Chief Jimmie Wright and his administrative assistant face charges for stealing picketer's signs. Additionally, accusations of financial mismanagement abound.

Wackenhut, the company who accepted the pr