'No' votes take lead on measure to privatize trash service in Fresno, California

SAN FRANCISCO, June 7 Fri Jun 7, 2013 8:04pm EDT

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SAN FRANCISCO, June 7 (Reuters) - Votes against a measure that would privatize garbage service in Fresno to raise revenue for the cash-strapped California city took a slim lead on Friday as election officials continued counting ballots.

With about 2,700 ballots left to review, those voting against outsourcing trash service held a 193-vote lead. Initial results after Tuesday's special election showed Measure G passing by 262 votes. The next vote update is scheduled for June 12.

Local governments in the most populous U.S. state have had to contend with slumping and weak revenue in recent years, requiring deep spending cuts and appeals to voters for more revenue to keep budgets balanced. Contracting some services to the private sector or other public agencies has also been used to help bolster budgets.

In Fresno, Mayor Ashley Swearengin pressed the ballot measure as a way to raise fees from a local trash collector that would take on residential garbage service for the city of 500,000 residents in the state's Central Valley.

Municipal finances in the region are under scrutiny in the U.S. municipal debt market following the bankruptcy filing last year by Stockton, another large city in the farming region.

Fresno currently bills households to pick up and dispose of garbage. Privatizing the service would raise at least $14 million over several years for Fresno from the company taking on the work from the city.

But the shift would cost about 120 city workers their jobs, which prompted city employees' unions to contest privatizing the service.

Separately this week, city leaders in Costa Mesa in Southern California approved contracting with a security services company to manage the jail for the city of roughly 110,000 residents.

"It would save us about $3 million over five years," said Bill Lobdell, a spokesman for Costa Mesa, which last year saw its more aggressive cost-savings plan to contract out 19 services blocked in court by a union for city employees.

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