311 Outsourcing in Chicago: Parking Meters 2.0 or a Plan With Potential?

 /  Nov. 4, 2015, 2:06 p.m.


Slipped unobtrusively between talk of health care and vehicle sticker sale reform in Chicago mayor Rahm Emanuel’s 2016 budget address was the mayor’s announcement of his plan to outsource Chicago’s 311 call center system. Although this change constituted no more than a sentence in the address, aldermen, labor unions, and call center workers leapt to criticize the plan. While this response is understandable given Chicago’s past experience with public-private partnerships, the city government has taken steps to ensure the success of future public-private initiatives. In the case of the 311 call centers, the public-private collaboration that would produce the new call center system would increase Chicago’s e-government presence and strengthen the relationship between the city government and its citizens.

In 1997, Chicago recognized that the system residents used to request city services was outdated. Most of the 311 system’s software did not comply with Y2K software protocols, could not create work orders, and required residents to dial different numbers for difference services. In 1999, after a year of researching the most efficient way to improve the city’s 311 call system, City Hall replaced it with an updated PC system that improved communication between government departments and Chicago’s citizens. In its first year of operation, the call center received 2.8 million calls. Sixteen years later, the 311 call center receives over 4 million calls a year. 20% of these are requests for city services, 13% are police non-emergency matters, and 67% are requests for information on city events. The center has seventy-eight full-time employees, and operators accept phone calls twenty-four hours a day. As of 2011, the budget for 311 call centers was $4,889,460.

Emanuel claims that privatizing the call center would save the city $1 million. Despite this promise, Chicago’s history of failed public-private partnerships remains etched in the minds of its citizens after the infamous parking meter deal of 2008, when Mayor Richard Daley sold 36,000 parking meters to a Morgan Stanley consortium in a seventy-five year lease for $1.2 billion. The deal resulted in parking fee increases of as much as $8 for two hours and jammed meters, prompting  threats of boycotts and protests. Even worse, a subsequent investigation revealed that the deal would yield $974 million less in revenue for the city than maintaining the parking meters would have over a seventy-five-year period. The investigation committee determined that a lack of public oversight and the city’s haste in approving the deal were the main causes of the partnership’s failure.

This lack of oversight is only one means by which a public-private partnership can fail. Financing can pose additional problems. While contracting may initially ease financing problems for the government, the cost of contracting with a private entity still falls on taxpayers. Inevitably, if the project fails, the public will then hold the government rather than the private corporation liable for entering the deal with taxpayer dollars.

Despite the potential drawbacks of public-private partnerships, the government can ensure that future programs succeed and taxpayers are protected by increasing oversight and by precisely defining the private entity’s role in the project. Several months ago, Mayor Emanuel and Alderman Roderick Sawyer introduced an ordinance to guide future public-private proposals. It would require the City’s Chief Financial Officer to issue a request for qualifications, require that an independent advisor to determine the risks of the transaction, and inform the chairmen of the city council committees on Budget and Finance of the proposed partnership ninety days prior to a vote. The ordinance would also incorporate public input on future deals by requiring public meetings prior to the committee hearing. The increased security provided by Sawyer and Emanuel’s ordinance significantly lowers the risk of public-private partnerships by adding more oversight, making it more likely that projects destined to fail won’t be approved.

In addition to increased public oversight, setting realistic expectations for the project and providing the private firm with a fixed budget can prevent the unexpected costs that have previously been associated with these relationships from appearing down the line. If governments can maintain these high standards for public-private partnerships, the benefits of these relationships, such as decreased bureaucracy and savings for taxpayers, will outweigh the costs.

Chicago’s new private 311 system demonstrates that, in addition to saving costs, public-private partnerships can improve the quality of government services. It will bring with it an increased digital government presence, and therefore improve government-citizen contact and decrease frustration due to impenetrable bureaucracy. This is not to say the system will be perfect. Many objections to the change revolve around citizens’ decreased access to government offices, as their calls may be processed by an out-of-state entity should the proposal be approved.

Currently, the Chicago city government only operates two websites. Given that 84% of Americans now have access to the Internet, and that constituents increasingly use the Internet to engage with City Hall, the City of Chicago must expand its online presence. According to the PEW Research Center, Internet users prefer to engage with their government online rather than in person, over the phone, or by traditional mail. “People like the convenience of online access to government service and are used to it in the private sector,” said Darrell West, vice president and director of Governance Studies at the Brookings Institution.

Because City Hall cannot afford the upgrades to the 311 call system necessary to keep pace with new technologies and means of interacting with the government, Chicago’s only option is to privatize the 311 call system. Although City Hall has not specified what changes must be made to the call system, Chicago’s lack of resources for adapting to new technologies will eventually, if not immediately, limit residents’ access to their government. An expansion of the 311 call system to include more digital communications would provide Chicago residents with the type of access to their government that is becoming standard in the Internet Age.

Increasing the breadth of Chicago’s 311 call service through the use of outsourcing and a private vendor would also sidestep the bureaucracy that often hinders government services. Because private entities need to offer high-quality service to maintain and gain business, they’re often better motivated than government to provide high-quality service. If the contracted private entity does not perform well, the government will not renew the firm’s contract. Therefore, the private entity has a greater incentive to perform efficiently and effectively. A public-private relationship can offer both expanded services and greater quality assurance, which Chicago’s government cannot offer due to budget constraints.

If the Chicago city government attempted to expand and improve its 311 services using a government agency, it would run the risk of falling into the same bureaucratic trap as the Affordable Care Act website Healthcare.gov. One of the reasons often cited for the various glitches associated with the implementation of Healthcare.gov was that the federal government did not hire an independent contractor to oversee the implementation of the website. “We like to discourage [a] disorganized web presence as it leads to confusion,” said West. A public-private partnership can be helpful in these scenarios because private firms are often more familiar with how to build these softwares efficiently, or at least have an easier time hiring specialists.

Although Chicago would be the first city to implement a public-private partnership for a 311 call center, other municipalities have privatized their 911 call centers, with considerable success. In 2008, Sandy Springs, Georgia, established the Chattahoochee River 911 Authority, better known as ChatComm. The town government outsourced design, implementation, management, and staffing to iXP, a telecommunications company based in Cranbury, New Jersey. Since its inception, the ChatComm system has spread to other cities such as Dunwoody, Georgia, which conducted a survey to determine that 99.8% of calls were answered in ten seconds or less and 88.5% of calls were processed in less than sixty seconds. John Kachmar, the city manager of Johns Creek, another ChattComm participant, estimated that the city has saved $300,000 in addition to this improved efficiency. Sandy Springs and Dunwoody are merely two of a growing number of municipalities to recognize the economic and social benefits of outsourcing government projects. “The rollover was pretty seamless,” said Officer Trey Nelson of the Dunwoody Police Department of the transfer to the ChattComm 911 system. Despite the planning required to develop the system, the more efficient system has yielded what Officer Nelson describes as a “tight-knit bond” among the “big family” of the counties that use ChattComm and the workers at the ChattComm system, which he says practically “runs itself.” While Chicago is much larger than Dunwoody, given specific parameters and a well-laid plan, Chicago could similarly achieve an increased online presence and better communication with Chicago residents.

The transition to a privately operated 311 system will require not only extensive planning on the part of both the government and the private firm that it contracts, but also the public’s trust. Years of mixed results from previous public-private partnerships have made Chicago residents wary of government efforts to privatize parts of its operations. However, through careful planning and regulation, Chicago’s government can not only maintain its relationship with its citizens, but also strengthen it by making its 311 system more efficient and accessible.

The image featured in this article was taken by Daniel X. O'Neil. The original image can be found here

Lauren Futter


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