SB 1322 -- A Very Bad Deal for Phoenix Taxpayers Senate Bill 1322: Cities;Towns; Managed Competition (Sen. Frank Antenori, R-Tucson) would mandate that the cities of Phoenix and Tucson put out most city services for competitive bidding, and award contracts to the lowest bidder who can do the work, even if they're out of state or out of the United States. What would be the cost to the City of Phoenix to comply with the mandated competitive bidding requirements of SB 1322? The city's Finance Department estimates that the average cost for a typical, simple procurement is somewhere between $22,000 and $42,000. A complex procurement, such as Phoenix already conducts for services like solid waste, towing, and banking, costs considerably more -- in the $100,000 to $150,000 range -- because consultants with expertise are needed to help structure the scope of work, monitoring requirements, etc. The most complex procurements, like a water treatment plant or airport, would cost the city millions of dollars because of the very detailed contract provisions requiring input from engineers and other specialists in these highly regulated operations. How many of these procurements would the City would be required to do should SB 1322 be enacted? It is safe to say that it would be in the thousands. Phoenix's total operating budget in fiscal year 2010-2011 including enterprises such as Aviation and Water Services was over $3.5 billion -- $432 million of that is already outsourced to private sector firms. To bid out and manage contracts for the other $3.1 billion in operations would cost Phoenix taxpayers hundreds of millions of dollars. For the upcoming fiscal year 2011-2012, Phoenix projects an estimated General Fund deficit of about $59 million. Clearly Phoenix does not have the money or other resources needed to comply with the unfunded mandates of SB 1322. Please call or email your legislator today -- why is the State even considering this? Source: P.L.A.N.
Sunday, March 27, 2011
P.L.A.N. Update - We Just Can't Afford It
SB 1322 -- A Very Bad Deal for Phoenix Taxpayers Senate Bill 1322: Cities;Towns; Managed Competition (Sen. Frank Antenori, R-Tucson) would mandate that the cities of Phoenix and Tucson put out most city services for competitive bidding, and award contracts to the lowest bidder who can do the work, even if they're out of state or out of the United States. What would be the cost to the City of Phoenix to comply with the mandated competitive bidding requirements of SB 1322? The city's Finance Department estimates that the average cost for a typical, simple procurement is somewhere between $22,000 and $42,000. A complex procurement, such as Phoenix already conducts for services like solid waste, towing, and banking, costs considerably more -- in the $100,000 to $150,000 range -- because consultants with expertise are needed to help structure the scope of work, monitoring requirements, etc. The most complex procurements, like a water treatment plant or airport, would cost the city millions of dollars because of the very detailed contract provisions requiring input from engineers and other specialists in these highly regulated operations. How many of these procurements would the City would be required to do should SB 1322 be enacted? It is safe to say that it would be in the thousands. Phoenix's total operating budget in fiscal year 2010-2011 including enterprises such as Aviation and Water Services was over $3.5 billion -- $432 million of that is already outsourced to private sector firms. To bid out and manage contracts for the other $3.1 billion in operations would cost Phoenix taxpayers hundreds of millions of dollars. For the upcoming fiscal year 2011-2012, Phoenix projects an estimated General Fund deficit of about $59 million. Clearly Phoenix does not have the money or other resources needed to comply with the unfunded mandates of SB 1322. Please call or email your legislator today -- why is the State even considering this? Source: P.L.A.N.
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