Chicago's City Council approved an ordinance Wednesday aimed at making future privatization agreements more transparent following the controversial parking meter deal that skyrocketed costs after the meters were privatized.
The ordinance will require the city to outline the benefits of privatization and provide time for public discussion and debate before a decision is made. The new rules were drafted based on the process the city used when it evaluated and rejected the privatization of Midway International Airport, according to a statement from the mayor's office.
"This new ordinance establishes commonsense rules of the road for privatizing city assets or services," Mayor Rahm Emanuel said in a statement. "It shines a spotlight on the process and ensures that the right questions are asked. That way we will only approve privatization agreements that are good deals for Chicago's taxpayers."
The ordinance applies to any future proposals to privatize either city-owned assets or government services. For asset privatizations, the ordinance only applies when the potential agreements have terms of at least 20 years and provide at least $400 million in value to the city. These new regulations would have applied to deals such as the ones involving the city's parking meters and the Skyway.
The new rules also apply to the privatization of service contracts with a value of $3 million or more, including the city's 311 call center that Emanuel initially planned to privatize as part of his budget plan. After push back from aldermen and union members, the mayor put a hold on his proposal to privatize the service in order to gain enough votes in the City Council to pass his budget.
AFSCME, which worked with the mayor and Ald. Roderick Sawyer to establish the new rules, released a statement following their passage praising the new ordinance. The union also played a role in putting a stop to Emanuel's plan to privatize 311 last month.
"Public services are best left in public hands, accountable to the people and not contracted out for private profit," said AFSCME Council 31 Executive Director Roberta Lynch. "This ordinance provides basic safeguards to protect the public interest and prevent reckless privatization in the future. Too often, privatization diminishes service quality while driving down workers' wages and benefits."
