The council also closed down the open-ended contract with the Virginia-based consultant, Grant Thornton LLP, a major federal contractor involved in the ill-fated privatization of airports screeners and Walter Reed Army Medical Center.
In a memo and testimony to the council, CPI Research and Policy Director Murtaza Baxamusa denounced the consulting contract because it was open-ended, wasteful, and had already begun without required council approval.
The resulting council vote is a victory for San Diego taxpayers and residents. It means:
Payments to Grant Thornton are capped at $250,000 for the next year. The council also stopped a $400,000 payment to the consultant for the fiscal year ending this week.
More than $1 million is freed up to restore needed community services like swimming pools, parks and libraries and to bolster reserves.
The contract has to be rebid and opened to other companies if the consulting work is to continue. Sanders' staff had proposed a multiyear, "indefinite" amount contract with Grant Thornton.
The city's dealings with Grant Thornton have been brought into the open, encouraging greater scrutiny from now on.
Sanders contracted with and began paying the firm in March 2007, three months after hiring a Grant Thornton employee to oversee his "managed competition" privatization process.
One big question remaining: Does the city really need a high-priced private consultant to help outsource city services to other contractors?
When San Diego voters green-lighted privatization by passing Proposition C in November 2006, they were told the program would save money and not require outside help. At that time, Sanders was advertising for the consultant bids.
On the ballot, Sanders' Prop C fiscal impact statement said:
"No significant new costs are anticipated as a result of the managed competition process. The Mayor would be responsible for oversight and contract utilizing existing City staff."
