More than 80 percent of the big cost savings projected by the city of San Diego’s financial reform ballot measure comes from two reforms long discussed at City Hall: competitive bidding and retiree health care.
As city Chief Operating Officer Jay Goldstone noted in the city’s official fiscal analysis of the measure, reform conditions would be met if the city squeezed just $1 in savings from both items. That would trigger a five-year, half-cent sales tax increase if the measure, Proposition D, is passed by voters. But Goldstone believes the city can go much further — $69 million annually — without breaking a sweat.
“These are estimates based what I believe is some conservative approaches to this,” Goldstone said.
For competitive bidding, Goldstone said the Mayor’s Office had six to eight city departments ready to go through “managed competition” once the city met the condition outlined in the ballot measure and ratified the process. Those departments include city’s fleet maintenance and print shop. Managed competition allows the city to bid out city functions and outsource them if private sector bids are a certain percentage below those offered by city departments.
Goldstone then took estimates from a widely cited 2007 study that showed the city could save 10 percent to 25 percent per contract using managed competition. Applying 25 percent savings to the departments he selected, Goldstone reached $27 million.
One of the study’s authors, Erik Bruvold, approved Goldstone’s methodology.