NEW YORK (Reuters) - New York City wants to hire investment banks to improve management of its assets — from parking meters to buildings — but the mayor flatly rejects selling any of the city’s valuable properties.
“We are not going to sell assets in return for money we spend balancing our budget,” Mayor Michael Bloomberg said on his weekly Friday WOR radio show. “It’s a short-term fix that leaves you much worse off down the road.”
With pro-union and anti-union rallies competing over whether Wisconsin public workers should retain the right to negotiate contracts, Bloomberg took a cautious approach.
His Request for Proposals for public private partnerships says the bank or financial company must “Remain sensitive to ways that might incorporate existing work forces and/or increase their productivity.”
Although investment banks and hedge funds have raised hundreds of millions of dollars to invest in publicly owned infrastructure, Bloomberg offered examples such as installing and maintaining equipment. Other assets whose management could be privatized include environmental and transportation systems.
The city would not give up control of parking meter rates or any other services that are the government’s responsibility, such as fighting crime or fires, he said.
Bloomberg’s views mirror those of fiscal monitors, who fault many of the early U.S. public-private partnerships, saying they benefited banks at taxpayers’ expense because leases typically were much too long and the properties often undervalued.
Chicago was a leader in public private partnerships. In 2005, it received $1.83 billion for leasing its Skyway commuter toll bridge and then signed similar deals for garages and parking meters. The meter deal has been faulted as mismanaged.
Several states also privatized highways, but voter backlash stymied the former governors of New Jersey and Pennsylvania’s attempts to privatize roads and Texas’ current governor was forced to drop the biggest such program in the country.
One of the controversial aspects of public private partnerships is the question of how unionized public workers are treated. Some deals, including one in Massachusetts, forced them to accept reduced benefits.
Bloomberg defended the role of unions in maintaining infrastructure, saying they help with training and managing resources. “It would be very hard to manage a city of this size without unions,” he said.
The mayor said his own comparison of whether private
companies or city workers did a better job collecting garbage found “neither side was doing dramatically better than the other.”
Reporting by Joan Gralla; Editing by Dan Grebler