Al DelBello: a 'pioneer' of privatization
By Michael Kitch
New Hampshire Business Review, May 1-15 1986
Reprinted with permission of the New Hampshire Business Review
When many corporate executives are leaving the board room for a stint in government service, Al DelBello has moved in the opposite direction.
A little more than a year ago, DelBello became president and chief executive officer of Hampton-based Signal Environmental Systems Inc. after a political career in New York that carried him from Yonkers councilman and mayor to lieutenant governor under Mario Cuomo, with a stint as Westchester County executive in-between. Delbello downplays the switch, explaining that during his two decades in government he forged the partnerships between the public and private sectors that mark Signal Environmental System's corporate identity.
"The reason I got into this business was because I pioneered the privatization of public services in Westchester County," DelBello said. "When the federal government began cutting back programs, we had to choose between giving up the services or providing the services differently." Under his leadership, Westchester fashioned partnerships to develop resource-recovery projects, mass production systems and municipally owned airports. At the same time, The Signal Companies Inc., corporate parent of Signal Environmental Systems, was working the other side of the same street to become the nation's leading developer of refuse-to-energy systems. That's why DelBello described his move to Signal Environmental Systems as "a natural progression."
DelBello is convinced that private enterprises, working in partnership with local, state and federal government, can provide a wide range of services traditionally performed by public agencies and both turn a profit and serve the public. "The question is not whether to privatize," he said, "but how to privatize. There are opportunities in almost every field of government."
Privatization, DelBello said, was driven by paradoxical policies of the federal government. "The Federal government has trimmed its budget and reduced its subsidies in the area of environmental protection, but the feds haven't reduced their standards, they've strengthened them," he said.
"The federal government never had any money for refuse-to-energy plants," said DelBello, adding that private enterprises, including Signal Environmental Systems, pioneered waste disposal systems. By 1987, Signal Environmental Systems will operate refuse-to-energy plants serving nearly 5 million people, disposing of 4 million tons of garbage and generating 2 billion kilowatt-hours of electricity -- enough to power 240,000 homes.
Recent federal budget cuts have drawn Signal Environmental Systems into wastewater treatment and water purification. "About half the business is water," DelBello said, stressing that the blend of reduced subsidies and higher standards have created new opportunities for the private sector.
"We take the primary responsibility from the government," he said. "In the past, a municipality might build a water treatment plant with state and federal money. The plant would be operated by municipal employees. But whenever there was a problem or crisis, the municipality called on the private sector to solve it. Now we design, build, own and operate the plants. And we guarantee their performance and assume all responsibility. If we contract to provide so many gallons of drinking water and something goes wrong, then we haul in bottled water until the problem is resolved."
The key, said DelBello, "is to know how to bring the private in. Government has a responsibility to assure the health and safety of its citizens. So government must set the policy and the parameters. The private sector should run the services and assume the responsibility."
And the present political and fiscal climate has created myriad opportunities for privatization, DelBello said, and, "we can't keep up with the market-place."
Signal Environmental Systems is among the companies spun off last year by Allied-Signal Group, to the Henley Group, an investment venture. DelBello indicated that the company would be strengthened and expanded by acquisitions of perhaps eight or 10 subsidiaries in order to bolster its position in existing markets and gain a foothold in new ones.
"There is a lot of potential for privatization of other services," DelBello said, "like fire protection, correctional facilities, airports, transportation and so on." Acquisitions, he added, would enable Signal Environmental Systems to enter emerging markets quickly.
Later this month, DelBello will preach the virtues of privatization in the People's Republic of China, where he will spend three weeks at the invitation of the government.
A staunch Democrat, DelBello has yet to pursue political interests in New Hampshire, though he delivers speeches and raises funds for party candidates around the country. "I've got a farm in Nottingham," he said, adding that he was considering a number of agricultural undertakings to fill his spare time.
But DelBello has continued to serve as the president of the National Council on Teenage suicide, which he founded three years ago. And he was named chairman of the capital fund drive for Odyssey House in Hampton, a residential center for youth troubled by drug and alcohol abuse.
"As mayor of Yonkers I was involved in the Renaissance program in the 1970's, which is similar to the program at Odyssey House," he said. When the people at Odyssey House asked me to serve I was a little surprised since I had just come to New Hampshire. But I am please to do what I can."
Despite the switch from government to business, DelBello seems to have remained on a course charted some time ago.