I'm just about as small-government-loving as you can get in Canada and not live in the middle of nowhere (like my wife's Uncle... seriously, he has a place 100% off the grid down a dirt (not gravel) "road" an hour-ish from the highway ), and one of those tenets of small-government and more private ownership is well... ownership. That it's a good thing. And thus the government would run (and own) its own resources if reasonable to do so. This example of leasing the buildings... is just pretty stupid. Similar to whenever I see "Public-Private Partnerships" I hear "pay less today, but pay way MORE in the long run." It's just not financially sound. Thus buildings and such should almost-certainly be owned by the government. Contract for cleaning/upkeep/maintenance? Ya, probably, but the land/buildings themselves? Definitely should be publicly owned.
There's other areas that are grey IMO. One example would be snow removal (a big deal in most cities in Canada). Should the city have enough snowploughs for the snowstorm of the century always on-hand, along with enough people on-call for such an event? No, they shouldn't IMO, as most winters that would be a complete waste. Should they have enough for the typical once-a-week dump of snow? Ya, probably. But when you get beyond that (dump of the season let's say), have contractors available to pick up the slack. You pay them for days needed, but not beyond. A small "core" force of workers (and equipment) is owned and operated by the city (county, or whatever), but your reserve is private on-demand. Contracted ahead-of-time sure (to get competitive bids) and so you're not screaming day-of and they can charge whatever they want, but not costing money when not used either.
Btw, on the whole "Public-Private Partnerships" thing (called "PPPs" sometimes), they're usually to get some type of expensive infrastructure (bridges, hospitals, whatever) up in places that need them, but they don't have the money for right now. So they use the PPP concept to say that they're not deficit-spending, when they really are. They essentially still are (the private corp they're contracting with is almost-certainly getting a loan), but not SAYING they are, and neither is it on the government's books. And c'mon, what government in relatively good standing couldn't get a better loan rate than the average construction company? Of course they could, so PPPs are just a big scam to not SAY they're running a deficit, when they really are, and paying a worse rate at the same time.