The League joined the New Jersey Association of Counties and the New Jersey School Boards Association in opposing S-1518. The requirements of S-1518, as amended, would apply to any privatization contractor valued over $500,000 that results in the loss of employment for regular employees. It would not apply to legal, management consulting, planning, engineering or design services, any public work contract subject to prevailing wage, services principally provided by persons with disabilities employed by the “Rehabilitation Facilities Set-Aside Act”, any contract with a vendor providing software or other information technology or equipment for the purpose of enhancing or increasing the productivity, efficiency, or effectiveness of the regular employees providing the services, or any contract under which a vendor provides services during an emergency or other unpredictable situation which creates a need for more services than the current regular employees are able to provide during the emergency or situation, provided that there is no loss of employment for regular employees who normally provide the services.
Prior to soliciting bids, the municipality would have to prepare a written comprehensive estimate of the quality and quantity of the services to be privatized, any fees, fares or other charges to the public, the current costs of providing those services, the qualifications, compensation and benefits of agency personnel currently performing those services, a comprehensive description of the information the prospective contractor is required to provide as part of the bid as required for the evaluation of the bid.If the bidder is awarded the contract, the municipality must provide a comprehensive description of the information that the contractor is required to provide, including the quarterly reports required by this legislation for ongoing oversight and the post-audits. This statement is a public record and must be sent to the Office of State Comptroller for review.
Under this legislation, a privatization contract could not include fees, fares or other charges to the public than those currently charged. The quantity and quality of the services performed under the contract must be equal to or exceed the quantity and quality of services currently performed by public employees.
Employees performing the services under contract will be required to have the same certification, licensing and level of job proficiency equal to or exceeding those of the public employees. In addition, the rate of wages and benefits for each position cannot be less than the rate of wages and benefits for comparable agency employees. The contractor will be required to submit quarterly payroll records listing the names, hours worked, the hourly wage and employee benefits paid to each employee. Such records must be made available upon request to any labor organization representing the employees of the contract or displayed public employees.
The written comprehensive statement must include the salary wages and benefits of regular employees providing the services subject to the contract. Prior to soliciting the bid, the municipality would have to provide such a cost estimate to the employees and their union providing the services. The employees and their union will have 30 days to review and submit an alternative cost estimate and a proposal to reduce costs and increase efficiency. The municipality must review any proposal submitted and revised estimates after bidding and decide whether or how much to reduce the municipalities’ estimate when making the comparison between the bid and employee’s proposal. The employee’s alternative estimate or proposal cannot be disclosed until bidding is complete.
Any contract award must include an offer of available employee positions to qualified regular employees displaced or dismissed from the municipality due to the privatization contract. Prior to the start of the contract, the municipality must, in consultation with the affected employees and their union, prepare an assistance plan, including any training, for each employee displayed because of the contract.
The municipality must make its determination public within 60 days of completing the bidding process. If the municipality chooses to designate a contractor it must issue a comprehensive written analysis of the total contract cost, including the cost to transition from public to private, additional unemployment and retirement benefits and costs to monitor and administer the contract. Such written analysis must be submitted to the State Auditor and State Comptroller. The State Comptroller has 30 business days to review and prohibit the municipality from entering into the contract if they determine that the bid does not provide cost savings or the municipality failed to comply with the provisions of this bill.
Making the decision to move from an in-house operation to a private contractor is never made lightly. Municipalities will often conduct a thorough analysis of the benefits and pitfalls of such a change. When developing their analysis, municipalities will involve the affected department and will examine alternatives to delivering the services. As local units struggle with raising costs while subject to a 2% levy cap, officials are forced to re-examine their budget and delivery of their services. To deliver the services that residents expect and want, local officials have been making structural changes not only to their budget but to their services. S-1518 would create such a burden on both the municipality and potential contractors that there would be limited privatization of services.
This bill adds many layers of review and oversight, rendering the process burdensome and lengthy. If the municipality passes all the hurdles to bid, we are concerned that there will be limited bidders willing to bid for the project that can potentially result in a loss of any savings. Municipalities must continue to have the flexibility to meet the current fiscal demands, and not have their hands tied further by legislation.
S-1518 has been referenced to the Senate Budget and Appropriations Committee. The Assembly companion A-919 awaits consideration by the full Assembly. Please contact your Assembly Representatives and Senator and urge them to vote no on S-1518/A-919.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.