Monday, November 30, 2009

Lucas County to 'governmentize' private sector jobs

Lucas County Sheriff James Telb has decided to move in house the job of appraising foreclosed properties, effectively having government take over private sector jobs.

I'm not a fan of how Telb has doled out this task, making sure that politically connected individuals get the lucrative contracts. But that concern is for how the Sheriff selects the individuals - not in the fact that the private sector is employed for the task.

You see, in Ohio, each foreclosed property must have three independent appraisals prior to auction. All three appraisers must agree on the value which is then set as the minimum amount in the auction. When the property is sold, $35 is collected from the buyer to pay for the cost of the appraisal.

The best 'political' part of the process is that state law doesn't require any special expertise in order to do the appraisal and the county sheriff gets to decide who gets the job.

Bringing the appraisals in house means that sheriff deputies will perform the appraisals. Some might say this is a good thing because the patronage will end. I'm not one of them.

If there is the potential for bias in the selection of appraisers, then revise the selection process. But it's wrong for government to take over private sector jobs just to bring in revenue.

And that's what this is all about - more money into the county coffers.

From The Blade report on the issue:

Last year, the nine appraisers were paid a total of $459,148 by buyers at auction - money the county would like to have for its own. Moving the work in-house could preserve the jobs of some deputies and it would make the money available for the county's general fund.

In March, Commissioner Pete Gerken said he'd rather pay UAW members to do the work. The UAW represents the Sheriff deputies:

"...I'd rather be paying UAW-represented county employees to keep their jobs ... than to pay sub-contractors," Gerken said.

So this all about finding work for government/union employees and bringing nearly half a million dollars into the general fund.

But having that revenue in the public coffers means that the individuals who were performing the work (and for some of them it's their ONLY income) will no longer have a job. Perhaps the commissioners have decided the only jobs they want to 'preserve' in the county are government ones?

And this may not actually save any money. The news stories report that a deputy, with benefits, costs around $65-70,000/year. Let's use the $65,000 figure for our comparison.

In 2008, nine appraisers were paid $$459,148. That means the average yearly payment is about $51,016. That's less than we'd pay the deputies. Now, some of the appraisers did more work than the others, resulting in higher payments, but that doesn't change the fact that the work needed to be done. And with foreclosures expecting to remain high (maybe even higher than in 2008), the amount of work isn't going to decrease - at least for a while.

So what happens when the appraisal work does decline - as it surely will? Will those deputies who kept their job still remain on the payroll? Knowing the county operations and the desire for law enforcement over other expenditures, they probably will. The costs of the deputies will remain, while the 'revenue' funding them will decrease. And that's an excellent argument for using private contractors for the work.

Except in Lucas County - where the focus is on government revenue.

Is this really what government priorities should be? To get as much money as possible even if it means 'governmentizing' what the private sector is both capable of and willing to do?

Some in this area think so. It's why government has taken over the towing tasks and ambulance transportation services in the city of Toledo. And why Toledo politicians are constantly talking about 'revenue enhancements' - which translates into 'higher taxation' in one way or another for citizens.

If the Lucas County Commissioners really want to 'save' money, they should look at privatizing tasks - not governmentizing them. There is no need or logic for government to take over jobs, functions or activities that the private sector can and will do - and usually at a lower cost.


DeeDee Liedel said...

Is there precedence for this? Seems to me that three people who all draw their paycheck from the same entity can not meet the requirement of "independent".

Maggie said...

DeeDee - it's state law...technically, they're sub-contractors with no formal affiliation to each other.

For example, 'independent' can refer to the fact that the three cannot be employed by a single real estate company.

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