Oakland Saves Taxpayers Millions by Contracting Out

The suburban communities of Oakland County are generally known for their remarkable economic growth and prosperity. What sets Oakland, one of the nation's wealthiest counties, apart from its less wealthy but more populous neighbor to the south, Wayne County?

One major difference is the privatization efforts that have saved Oakland County job providers and taxpayers almost $9 million since 1993. Most of the services contracted out by Oakland County Executive L. Brooks Patterson and his staff have been small, so few privatization efforts have been publicized by the media. That does not mean, however, that they are not important. Below is a brief timeline of Oakland County's impressive privatization accomplishments.

  • May 1993. County officials contract with a private firm to serve and process civil papers. The firm is paid through fees generated by the court. Last year the company served 5,851 papers and received fees totaling $480,000. Annual savings: $208,588.

  • August-October, 1993. Oakland County enters into three contracts with private firms for food, janitorial, and medical services through its Medical Care Facility, a 120-bed long-term nursing home that serves Medicaid, Medicare, and Blue Cross/Blue Shield recipients. Annual savings: $376,349.

  • January 1996. Oakland County contracts with an automobile dealer to provide "bump shop" services to county-owned vehicles. A bump shop is responsible for removing the many dents and dings inflicted on automobiles in the normal course of their useful lives. Annual savings: $86,300.

  • July 1996. Oakland County contracts with Staples Inc., for the purchase and delivery of office supplies to all departments. Annual savings: $132,200.

Prior to this contract, county departments ordered supplies directly from the county's Materials Management Division. The division then ordered supplies directly from a vendor, who delivered supplies twice per week. This middle management was reduced by allowing individual departments to order from Staples directly, via the Internet. In addition, the county was able to avoid construction costs for a new Materials Management Division building. Ultimately, however, Oakland County became dissatisfied with the Staples vendor and terminated the contract in favor of a new one with the vendor Boise-Cascade. One of privatization's great virtues is that if a vendor fails to perform it is easy to get a new vendor. A poorly performing county unit is much harder to replace.

  • October 1997. The county contracts with a private dental organization to provide dentistry services to 3,000 low-income adults. Annual savings: $742,988.

For more on this subject, see "Oakland County Fills A Cavity: Privatizing Dental Work" in the winter 1998 issue of Michigan Privatization Report.

  • October 1999. Oakland County contracts with private physicians to conduct breast and cervical cancer screenings for Medicaid patients. Annual savings: $138,675.

  • August 2000. County officials contract with a private firm for purchase and preparation of inmate meals. Annual savings: $1,656,765.

These privatization efforts reduced needless bureaucracy in county departments by 67 full-time positions. Few employees, however, had their jobs terminated. Positions that were vacant at the time of privatization were never filled, some employees retired, and still others were transferred to different positions within the county.

In addition, Oakland County has given its Wixom-based sewerage plant to the city of Wixom. The city then contracted with EarthTech for operations and maintenance of the facility. EarthTech is a Long Beach-based provider of water and wastewater management with offices all over the states, including Grand Rapids.

Looking to the Future

The next big public-private contract under consideration between Oakland County and a private, for-profit firm involves Oakland's "806 Megahertz" system, which is a radio communications system used primarily for the county's emergency personnel. Oakland may outsource the system's operation and maintenance over to a mobile communications company such as Motorola Inc. or ComNet Ericsson. The county would retain the system's towers and issue radio licenses, while all other services would be provided by the private firm.

The Patterson administration in Oakland County has not been a vocal champion of privatization; however, it has worked quietly behind the scenes to ensure that what privatization efforts it took were worthwhile and resulted in better services and lower costs for residents.

Michael LaFaive is managing editor of Michigan Privatization Report.