In theory, nothing is preventing a much larger city from outsourcing its public works functions, Norment says. “The only impediment is developing the public consensus,” he says.

NCPPP has developed keys for successful private-public partnerships, and the list includes establishing the laws to allow such an operation, developing a receptive political environment and strong political leadership. “Cities are in a declining revenue stream,” because of falling tax revenues, he says. “This allows them to maximize their revenue and maintain control.”

Comparing apples

Maximizing revenue and maintaining control were among the key objectives of Centennial, Colo., leaders as they debated whether to build their own public works department or hire an outside company to perform and manage the city's daily operations. Zelenok, the city's public works director and the key staffer behind the ultimate decision, came to the position from a unique perspective. Previously, as public works director for Colorado Springs, a city with about 375,000 residents, he had managed a department that performed everything from paving streets to operating a local toll road.

When Zelenok joined the city staff, Centennial had about eight months to figure out how to deliver public works services to the community. “I compared a fully burdened in-source model with an outsource model,” he says, “and outsource won, but not by a huge amount.” In comparing the two formats, Zelenok considered costs such as training, retirement plans and insurance. “Apples to apples,” he says.

In the end, other considerations entered into the decision to use the private sector alternative. Zelenok points out that there is now a call center that will respond to residents' questions around the clock, seven days a week.

The final five-year contract, which includes a number of built-in penalties and performance incentives, is worth about $4 million for the second half of 2008 and about $8.6 million in 2009. The city will review the contract annually.

Most importantly, the outsourcing model gives the city more control, Zelenok says. “I don't have to worry about the budget for the next five years,” he says.

For Zelenok, the outsource model allows him to spend less time on personnel issues, like hiring and firing, and more time crafting a strategic vision for the city. “It's what I really want to do,” he says, “charting a way ahead for the community.”
— Robert Barkin is a Bethesda, Md.-based freelance writer.