April 19, 2019

Privatization options

For different reasons, Bangor and Brewer have been on similar tracks, examining their options for privatization. Both communities are learning that the simple concept of contracting out municipal services often is complicated in execution, and the savings sometimes are elusive.

While Bangor’s interests are far-ranging, covering the whole of city government in the report of a special commission empaneled by the City Council, Brewer is focused on a single objective: finding a private operator for its sewage-treatment facility, the first time the city has attempted to privatize an entire department.

Brewer’s goal is to save money on the operating costs of the plant in order to lower the rates for users. As the council realized when it discussed the process with a consultant early in December, non-monetary considerations are as important as cash: competence, delivery of services and accountability to the public.

During Brewer’s deliberations, one councilor was concerned that the city might relinquish too much authority to a private entity. Not so, said the city’s consultant, who pointed out that Brewer, as holder of state and federal permits, would continue to be responsible for monitoring and compliance with environmental laws, and for adherence to agreements between the municipality and Eastern Fine Paper Co.

Similarly, in recommending that Bangor evaluate contract management of its expanded sewage-treatment plant after two or three years of experience with the new facility, the privatization commission urged that the process recognize “that the City will remain liable for any waste-water discharge permit violations and that the City’s significant investment in its plant must be protected.”

Neither community can unburden itself of its legal obligations through privatization. Beyond that, each city bargains away only as much authority as it chooses.

Brewer City Manager Harold Parks remarked last month on the complexity of privatization. It also incurs costs. When the council studies management alternatives for Bangor’s treatment plant, the commission urged that the financial analysis include the cost of a full-time contract compliance officer — potentially a busy position that could have oversight of a range of what are now strictly municipal services, including garbage collection and management and maintenance of city-owned housing.

The fact that the privatization process is more complicated and demanding than expected should not deter either community from signing a management contract, when that makes economic sense and vital municipal interests will be protected.

The dialogue over contracting out city services is doing what it should do: help Bangor and Brewer identify potential problems and avoid mistakes. Privatization of municipal services makes good sense in some instances, but in all cases, it must be done right.

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