Public and Private, Head to Head

Aiming to improve the efficiency of Chicago’s recycling pickups, Mayor Rahm Emanuel is turning to a competition marked by fairness.
by , | November 8, 2011 AT 11:00 AM

Rahm Emanuel has never been known for being shy. But since taking over as Chicago's mayor last spring and inheriting a budget shortfall of more than $600 million, his boldness has been breathtaking.

First, he risked a city council rebellion to save $60 million by switching to a grid system for trash pickup rather than sticking with the traditional ward-based system. Then he took on teachers' unions to fight for a longer school day. Now he is pitting city workers against private companies to see who can pick up recycling more efficiently. Word is that Emanuel will next solicit bids for sewer repairs, concrete work and tree trimming.

Emanuel's actions demonstrate that he understands an important point: From taxpayers' perspective, whether a service is ultimately delivered by public or private workers is less important; the competition is what is likely to deliver the best value.

It's a lesson Florida lawmakers could stand to learn. A state judge there recently struck down budget language that mandated the privatization of prisons in 18 south Florida counties. The judge found that it was unconstitutional to use the "hidden recesses of the General Appropriations Act" to mandate privatization and that the state Department of Corrections violated state law by failing to conduct a business case study of the pros and cons of privatization before putting the service out to bid.

Compare that to Emanuel's approach. The city selected two private companies to collect household recycling. Beginning in October, public sanitation workers and each of the private companies were assigned different neighborhoods. To give all sides a chance to adapt to the new reality, the city didn't start to measure the results until this month. It will decide who gets the contract by next June.

Going in, the mayor estimates it costs city workers $5 and private companies $2.75 to empty each recycling cart. Labor costs are the biggest reason for the difference. One of the private companies bidding for the contract pays its drivers, who are members of the Teamsters, $25.56 an hour to drive and to roll the recycling bins to the automated "tipper" at the back of the truck.

City drivers, who are also Teamsters, are paid $33.85/hour just to drive. A Laborers Union member is paid $34.37 an hour to dump the bins.

For years, city workers were largely intransigent in negotiations over work rules, but all that is changing now. A longstanding practice of one employee being paid to go pick up his or her co-worker will become history. Now they will meet near the start of their route.

Each recycling crew has been cut from 90 people to 45 and may go down to 30 by the time competition begins in earnest in late November. And union leaders just agreed to cut the number of crews from 45 to 15.

Emanuel is following a trail blazed by leaders such as former Indianapolis Mayor Stephen Goldsmith. By opening city services to competition and providing public employees with the resources to bid against private companies, Indianapolis trimmed its budget by 7 percent and cut the non-public-safety workforce by one-third during Goldsmith's 1990s tenure.

Mayor Emanuel says the recycling-pickup competition represents a "paradigm shift." Perhaps that shift is most apparent in the words of Lou Phillips, business manager for the Laborers Union's Chicago local. "This is a business," he said. "We have to be competitive."