DiCiccio takes aim at city bureaucracy: Phoenix councilman’s plan would privatize services, shrink public payroll - Ahwatukee Foothills News: News

DiCiccio takes aim at city bureaucracy: Phoenix councilman’s plan would privatize services, shrink public payroll

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Posted: Monday, July 5, 2010 8:00 am | Updated: 8:16 am, Thu Dec 2, 2010.

City Councilman Sal DiCiccio says Phoenix should apply the "Yellow Pages test" to trimming its cash-strapped budget.

"If you find the function in the yellow pages, you ought to be looking at having the private sector doing it instead of the government," said DiCiccio, whose central Phoenix district stretches from Ahwatukee Foothills to north of the Biltmore area.

The proposal is part of his recently revealed four-point reform plan, which he says will reduce the tax burden on residents and stimulate the economy by reducing the city's largest expense: Hundreds of millions of dollars for public employees' salaries and benefits.

"We are in a financial crisis. You deal with the largest expense you have," DiCiccio said. "You can only put so much pressure on the public before they can't handle it anymore, and we're at that point."

Essentially, the plan calls for spinning off many government services - with the exception of police and fire - to the private sector, cutting back on employee compensation and eliminating pensions for new hires, and balancing the growth in city government with population growth.

Another proposal calls for rescheduling local elections to coincide with larger general elections to boost voter turnout in a bid to reduce the influence of employees' unions.

So far, DiCiccio said, the plan has fallen on deaf ears because there is no appetite among officials to take on the unions. Instead, city leaders have taken the easier route of raising taxes and fees on residents, he said.

"Civilian unions run City Hall," he said. "If we can't get it done at City Hall, we may have to go to the voters with an initiative."

Representatives of the Service Employees International Union's Phoenix chapter were not available for comment Thursday.

Ed Zuercher, an assistant Phoenix city manager, said officials already are working on reducing the budget. About 90 percent of Phoenix's $950 million general fund operating budget goes to paying the city's roughly 14,300 employees. More than 70 percent of those personnel costs are attributable to the police and fire departments, he said.

"We're a service business," Zuercher said.

DiCiccio said he does not propose cutting compensation for police officers or firefighters, or eliminating emergency response positions. But he said support roles like vehicle maintenance could be outsourced to the private sector to be done more cheaply.

On average, each city of Phoenix employee receives about $100,000 a year in total compensation, he said. That's much higher than in the private sector, where workers compensation is a little more than half as much, DiCiccio said.

"The high labor cost is unsupportable," he said. "There is no plan to deal with the big expense."

Zuercher said DiCiccio's estimate of city workers' compensation is misleading because it includes not only salary, but the cost of benefits and things like payroll taxes and Social Security. If the salaries of police officers and firefighters are excluded, the average city employee nets about $50,000 a year, a "middle class salary," he said.

As for eliminating pensions for new hires, Zuercher said it may not be possible without a public vote to amend the city's charter.

"We have fewer employees per capita than we had 40 years ago," he said. "We are reducing the size of our government footprint."

He said outsourcing some services to the private sector might make financial sense, but in some cases it's cheaper for city employees to do the work in-house.

"We're in the process of reviewing that. We're going service by service to see what makes the most sense," Zuercher said. "What (DiCiccio) is really talking about is getting more efficient. By lots of measures we are shrinking city government. They're doing a lot more with a lot fewer people."

DiCiccio said he expects a tough fight over the proposals. He said some people have told him that by taking on the unions he was committing "political suicide." But he said he plans to take his case to business groups and the public.

"We're going to pound away on these points over and over again," DiCiccio said. "The public will either support what I do or they won't."

 

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