2009 News Releases
February 25, 2009
Zita Allen, Communications
37 White Paper charges city's $9 billion in
outside contracts "Unregulated
Says City Can Save Millions Not By Axing 23,000 Workers, But By Slashing Deals
With Over-Paid Consultants And Over-Priced Contractors
Council 37, the city's largest municipal employee union, today issued a White
Paper, "Massive Waste at a Time of Need," at a news conference at City
Hall. The news conference was followed by a City Council hearing, called by City
Council General Welfare Committee Chair Bill de Blasio. The hearing examined one
aspect of the study's finding that the city hands over some $9 billion of its
$60 billion budget to an unelected, unaccountable "shadow government"
of private contractors and outside consultants.
The DC 37 study showed
that work done by the private sector often costs a lot more than that done by
public employees. While the "shadow government" uses a parallel workforce
of more than 100,000 employees-hired without the "merit and fitness"
examinations and background checks required of civil service workers-city employees
are better trained, more responsible and more cost-effective. The study identifies
about $130 million in savings the city could realize by cutting spending on outside
contracts with over-paid consultants and over-priced contractors.
this study points to specific areas where decisive action can provide immediate
savings," said DC 37 Executive Director Lillian Roberts, "I hope that
in this era of change, it will also spur public officials and the media to shine
light on the "shadow government," work with us to identify and cut the
waste, and save the taxpayers hundreds of millions of dollars.
July 2005, funding for the city's contract budget has increased rapidly, climbing
to a record high of $9.2 billion for more than 18,000 contracts. The amount the
city pays for these contracts is equivalent to 15% of the city's tax-levy budget
and more than 46% of the city's controllable spending," Roberts added.
report focuses on only ten contracts spread across eight city agencies to illustrate
the potential savings that could be realized if the work were performed by city
workers, for example:
- The City can save $21.6 million
by ending contracts with computer consultants doing non-specialized technical
work that can be done by computer professionals employed by the Department of
Information Technology and Telecommunications (DoITT) and other agencies.
City can save $14.5 million by ending contracts with custodial services and using
Job Training Participants in the Transitional Jobs Program. This would also provide
these workers a path towards stability while adding to the City's tax base.
City can save well over $51 million if it ended the practice of the Department
of Homeless Services utilizing "per diem" hotels and motels to house
an increasing homeless population without a legal contractual relationship as
required by the city's procurement rules. We recommend the city ending this practice
and instead refer homeless families to the New York City Housing Authority at
the "per diem" rate for privately owned shelters.
members have an expertise and a knowledge base no outsider can match," Roberts
said. "Our White Paper shows dollar-for-dollar just how valuable our members
are compared with the inefficiency of consultants and management. There are also
the issues of transparency and accountability that are byproducts of this type
"Six years ago, when we brought this type of waste to
light in a White Paper, "We Can Do the Work," the Bloomberg administration
cut back on outside contracts and saved the city $175 million. But, since fiscal
year 2005, the contract spending has soared by 36% from $6.7 billion to $9.2 billion.
In the computer field we have seen an explosion of 147% in contracting costs.
responsible government can in good conscience cut vital services and lay off hard-working
public employees while real savings are within reach," Roberts concluded.
District Council 37 is New
York City's largest public employee union, with 125,000 members and 50,000 retirees.