Budgets have more North Jersey towns considering sharing serviesSunday March 3, 2013, 11:37 PM
BY ALLISON PRIES
STAFF WRITER
The Record
Faced with stringent budget cuts and rising health care and pension costs, a growing number of towns, including Mahwah and Allendale, are on the verge of turning longtime public services over to the private sector.
ELIZABETH LARA/STAFF PHOTOGRAPHER
Will Remigio picking up garbage in a residential area of Englewood Cliffs. The borough has outsourced trash pickup for several years, allowing the DPW's seven workers to focus on other tasks. Many North Jersey towns have already made the move, with janitorial services, garbage and recycling pickup and snow plowing among the more popular services farmed out to contractors. Discussion of privatization is normally controversial, with critics claiming it puts people out of work and takes the service out of a town’s control.
A Mahwah proposal to outsource recycling was met with resistance last summer, but the Township Council — grappling with a possible 4.9 percent tax increase — will discuss the issue this week. And Allendale, which has used a private garbage hauler for nearly a decade, now plans to privatize the operation of its water utility.
“Years ago it was easy, you raised taxes,” Mahwah Mayor Bill Laforet said. “Today that’s no longer a luxury. People on the council … now are being asked to make choices that affect people’s lives. Not because they want to, because they have to.”
School districts, too, are looking for ways to save. Last summer, the Englewood Board of Education outsourced the jobs of more than 100 secretaries and professional assistants after months of heated protests.
The savings from privatization, officials say, come from eliminating salaries and health care and pension expenses. In some cases, towns can also sell off equipment — or avoid making future capital investments.
But the effort is not always successful, as some towns find private companies submit low bids in the first few years, and then the costs escalate. For instance, downsizing the public works departments that pick up garbage could mean having to contract out for snow removal because there are fewer people to share the seasonal workload.
In March 2010, Governor Christie formed the New Jersey Privatization Task Force to research how the state could save money. The group identified $210 million in potential savings if the state were to contract out golf course management and maintenance, inmate medical services and housing and uniform construction code enforcement and other services.
The New Jersey State League of Municipalities followed suit, offering help for municipalities looking to trim. Officials say there are no statistics on how many towns have gone with private companies.
“In these tight economic times, we have been a proponent of local governments looking at all options available to them in considering cost savings and greater efficiency,” said William Dressel, executive director of the NJSLM.
But, Dressel said, towns need to keep the quality of the service in mind.
“This isn’t just dollars and cents,” he said. “We’re not banging out widgets. We’re trying to provide quality-of-life services. You’ve got to be concerned if you’re going to outsource garbage; you want to make sure the garbage is going to be picked up on time, in a professional manner and in the same manner residents have received.”
Privatization is typically more attractive for smaller municipalities, said Gregory Fehrenbach, a consultant hired by the league.
A smaller town, for example, is more likely to contract out its network support services for information technology. “In larger municipalities, there is a lot to be done and it keeps the staff fully occupied,” he said.
There has been a great deal of dialogue in the past few years about privatization, Fehrenbach said, but the concept has been used for decades.
“In the 1950s, ’60s, ’70s and a little bit into the ’80s, municipalities didn’t have as much pressure because the burden of property taxes wasn’t that strong,” he said. Elected officials’ worry over the cost of government has grown since the first budget appropriation cap in the mid-1970s, he said.
“Then we’ve seen a gradual ratcheting up of sharing services, privatizing services,” Fehrenbach said.
For decades, towns such as Haworth, Oakland and Waldwick have had private solid waste pickup.
“We privatize because it’s cost-effective for the residents and I personally believe we should privatize if it’s effective,” Oakland Mayor Linda Schwager said.
Englewood Cliffs has outsourced garbage pickup for as long as Mayor Joseph C. Parisi Jr. can remember.
And this year, Borough Hall janitorial services were privatized for less than $20,000. No jobs were lost and no money was saved. But officials freed up the DPW’s seven employees to focus on other tasks.
“I’d rather have them fixing the roads or cleaning storm drains,” Parisi said.
Three years ago, Lodi hired a landscaper to handle duties once performed by its DPW, Borough Manager Tony Luna said. The move saved $50,000 a year and cut two employees from the payroll. The borough plans to continue the practice.
Allendale officials say they plan to save $193,000 a year after their water utility operation is privatized.
The borough would retain ownership of the infrastructure and its rate-making structure. But the daily management has become a burden on the small borough.
“All the [Department of Environmental Protection] testing, training, etc., have become very, very onerous,” Mayor Vince Barra said. “We spend an enormous amount of time trying to keep up with it.”
This month the council will make a decision on the plan, which mandates the current supervisor be employed by the high bidder — United Water. A part-time clerk and a temporary position will be dissolved. The move should stabilize water rates for residents who have seen 5 to 7 percent annual increases for a decade, he said.
“Fiscally, it absolutely works,” Barra said.
Montvale has whittled its DPW to five employees, Mayor Roger Fyfe said. And last year, the borough researched completely outsourcing the department — a possible savings of $700,000 in the first year, he said. That plan hasn’t been implemented.
“They don’t mow the lawn, collect garbage. They plow some but we also have contractors,” Fyfe said. “It just happened. One job after another.”
Fyfe said even cutting costs on equipment can be huge.
“Everything they need to do their jobs is expensive. A snowplow is probably $15,000. A big dump truck can run $70,000.”
But not every effort is welcomed with open arms.
In Mahwah, some officials and residents were concerned about losing the personal touch.
DPW workers proved to be invaluable during recent storms, assisting disabled homeowners and performing other tasks. And the employees often back up the borough’s daytime emergency service responders.
“They’re out there all the time,” said Councilwoman Lisa DiGiulio, who opposed the effort. “Leaf season, plowing — they’re always out on the road. I think they’re our road keepers. If they see something wrong, they notify the administration.”
DiGiulio said towns have other options.
“When people retire, combine jobs and pay them a little extra,” she said. “If we eliminate step and grade and longevity, we could come out of this OK.”
Mark McCart, a labor relations representative for the Hackensack-based United Public Service Employees Union, said Montvale and other towns who rely heavily on outsourcing are putting themselves in a vulnerable position.
“I think what people need to understand is that the private sector is a wonderful thing,” he said. “But they’re here for profit. … Eventually, if we keep going on this path, government is not going to be there when they need them,” McCart said.
It was “all hands on deck” during superstorm Sandy, he said. “Nobody has titles. It doesn’t matter if you usually work in the water department or are doing lawn cutting. People are moving barricades or blocking roads. You can hand a guy a chain saw and say, 'Go cut up that tree and get the road clear.' ”
Paramus had growing pains when it outsourced janitorial duties two years ago.
“We were accustomed to a certain level of service and with the new contractor it wasn’t always up to our expectations,” Mayor Richard LaBarbiera said.
Paramus still outsources the maintenance work, saving about $200,000 annually, he said. But it hasn’t done any other privatizing.
Not outsourcing the management of Paramus’ golf course “is probably the best thing we never did,” the mayor said.
Email: priesa@northjersey.com