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Phoenix's solid waste field services division hired the most skilled employees it could find when it took over new service areas. Training and regular meetings helped keep the team competitive and efficient. Photo: City of Phoenix
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City park operations crews handle mowing and general maintenance throughout the 38-square-mile community. Photo: City of Carrollton
THE WINNING BID

Phoenix has six municipal solid waste service areas serving 1.3 million residents. The city has used managed competition to handle solid waste for 20 years, bidding out one of the six areas every other year.

When two six-year contracts ended last year, the city took back these service areas—an expected challenge. The city also won one service area over its private competitors, which was unexpected.

Suddenly holding five of the city's six service areas had a big impact, says Mike Lopker, the city's deputy public works director, solid waste field services. The city always plans to oversee three service areas, and had prepared for four—but wasn't quite ready for all five. “We had three major issues: personnel, trucks, and routing,” says Lopker.

The city had 800 applicants for 55 driving positions. Reviewing each candidate, testing their driving skills, and then interviewing the top ones was time-consuming. Then Lopker had to buy 55 garbage trucks at $250,000 each—an extraordinary order. Finally, the city had no good geographic information system in place and no electronic routing system. Each area's routes would have to be created manually because the city had grown since the last time public works had responsibility for these routes.

“We learned some lessons from this experience: plan ahead, start early, and engage the staff,” says Lopker.

Managed competition can be a double-edged sword. “It motivates everyone to do their best every day,” he says. Some people find this stimulating and some find it threatening. And it forces you to look at costs, operations, and how competitive the department is. He's confident that the department is doing well; municipal solid waste ranked third highest of all city departments in a recent customer poll.

SERVICE FEES

Like Phoenix, Carrollton, Texas, realizes that managed competition is just one way to lower costs—both to residents and internally. Tom Guilfoy, Carrollton's director of competition, oversees the three- and five-year contracts won by either the city or external vendors for traffic operations, parks maintenance, water and wastewater, utility billing and collections, facility maintenance and services, and—down the road—for human resources and fleet services.

Guilfoy's duties are varied. Though his No. 1 job is to handle managed competition, he also works closely with the city to ensure that its bid for services is competitive when pitted against private vendors. He has no involvement in the bid preparation itself; he ensures that the city is prepared to compete head-to-head with private companies when a contract comes due.

“We save several million dollars each year through managed competition,” says Guilfoy. This money goes back into general and enterprise funds to help pay for improvements, like upgrading streets and information technology.