Commissioners Establish Public-private Partnership Committee

(2/17) The Frederick Board of County Commissioners today voted unanimously to establish a two-year Frederick County Public-Private Partnership Committee that will examine and recommend to the board what functions, tasks and services in county government may be considered and appropriate for transitioning to the private sector. The committee will start looking at options after the board presents a balanced budget with no tax increases at the March 8 public meeting.

The county commissioners are committed to exploring opportunities for achieving cost savings in the delivery of county services. This effort is of strategic importance due to current economic conditions, in which the county has experienced decreased revenues while the demand for services has continued to increase.

Privatization, the outsourcing of selected services to private companies, has been one method successfully utilized by local governments to reduce costs and to accomplish other desirable goals. The success of privatization efforts encompasses the ability to provide the required and desired service levels at a lower cost than could be achieved utilizing the services of government (public) employees.

Board President Blaine Young commented, "With the current budget crisis we face this year and beyond, we need to explore every opportunity to reduce our deficit and correct the structural problem where we’re spending more money than we’re taking in. We look forward to the suggestions this new Public-Private Partnership Committee will bring back to the board to help with our long-range financial planning.

"Commissioners Billy Shreve, David Gray, Kirby Delauter and I, along with County Manager Barry Stanton and Purchasing Director Hal Good, visited The City of Sandy Springs, Georgia, this past weekend to see first-hand how they successfully privatized many public services. We thank their officials for hosting our visit and inspiring us to further explore how Frederick County could follow their example in some areas of county government."

The Public-Private Partnership Committee includes members who are able to identify and analyze relevant comparative costs. The commissioners appointed the following to serve on the committee: County Manager Barry Stanton, Sheriff Chuck Jenkins, Assistant County Manager David Dunn, Finance Division Director John Kroll, Human Resources Division Director Mitch Hose, Assistant County Attorney Richard McCain, Purchasing Department Director Hal Good and Health Services Division Health Officer Barbara Brookmyer, M.D.

The objectives of the committee are to identify and evaluate privatization opportunities within county government; develop an appropriate implementation plan for consideration by the county commissioners if a privatization opportunity is identified; address internal and external obstacles to privatization, and evaluate cost savings and operational efficiencies.

Reasons for considering privatization include:

• Rising costs of operating a service -- the costs of operating a particular service may be rising at unacceptable rates;
• Profit motive -- financial attractions could induce a private company to want to operate a service;
• Capital expenses -- a private company may offer to provide both the funds and the expertise to renovate facilities or upgrade equipment;
• Expertise -- A private company may offer expertise and technology to government that it does not have;
• Efficiency -- A privately contracted company may be able to operate a service more efficiently, avoiding procedural requirements that some governments must follow;
• Human resource management -- A private company may have more leeway in dealing with human resource and personnel issues compared with many government entities;
• Core focus -- In some situations, a government may feel it should concentrate on its core mission and let others perform the non-core tasks associated with operating a government organization;
• Situations change -- Local government may have begun operating a service because there was no one else available to do it at the time. This situation may be very different today in that there may be other entities available to operate the service and the governmental entity no longer needs to be providing the service itself;
• Flexibility in adjusting program size -- Private businesses are often quicker to note needs to adjust the level of a service or size of a program and may have more flexibility to make adjustments, and
• Yardstick for comparison -- Having competition gives local government something often missing from local government services – a source of comparison, or a yardstick.

For additional information about the committee, contact County Manager Barry Stanton at 301-600-1028 or via e-mail at bstanton@FrederickCountyMD.gov.