As well it should, and the benefits are obvious, as this article from the Sacramento Bee reports.
A related article from Governing Magazine looks at the issues involved in ensuring diversity in contracting out.
An excerpt from the Bee article.
“For 23 years Frank Acosta has tended the grass on Sacramento's public golf courses. He earns about $60,000 a year, plus a city pension and health benefits.
“It's a good living, but it's one that officials say the city can no longer afford. As part of their effort to cut costs and plug a $39 million budget deficit, the Sacramento City Council voted last month to outsource maintenance jobs at city-owned golf courses.
“If finalized this fall, the move will result in 38 city workers losing their jobs, but will save the city an estimated $500,000 a year, according to city budget officials.
"I sit at home and think, 'Man, I have to look for another job after 23 years,' " Acosta said. "I never thought of that, but I guess I should have."
“The agreement would mark the first time the city has laid off workers to hire a private contractor, according to labor union officials.
“It was a decision watched closely by many.
“There was a sense among city officials that golf maintenance would serve as a good barometer of the City Council's appetite for contracting out jobs historically held by public employees. If the council wouldn't outsource a service for a so-called elite sport, there was no sense trying to expand the concept.
“But now that the council has approved the move, city officials say privately that it could open the door to other contract proposals. Solid waste collection and park maintenance could be next.
“That has the city's labor unions concerned.
"We're all nervous, and we should be," said Marcia Mooney, a business representative with Local 39, City Hall's largest labor union. "Private contractors are not in it to be nonprofits. Eventually they will have to raise their fees, and the city is at the mercy of that contract."
“With budget deficits dogging cities across California and the nation, more are trying to save money by hiring private companies to perform work traditionally done by public employees. While many local governments already outsource garbage collection and water treatment, more are looking at expanding the concept.
“Budget officials argue that contracting with private firms greatly reduces labor costs and, in some cases, can increase the quality of services by using expert firms.”