By HOWARD FINE
Staff Reporter
The Los Angeles City Council has ordered the city’s Harbor, Airport and Water and Power departments to review the $100 million-plus worth of contracts they award annually to the private sector to see if the work could be done by city employees.
While the move has been touted as a potential cost-saving measure by sponsor Councilman Rudy Svorinich and city employee unions, it has drawn criticism from privatization advocates.
The Svorinich motion passed the council by a unanimous vote. The three city departments must report back to a council committee by the end of next week with their recommendations.
The Department of Airports, the Harbor Department and the DWP are known as proprietary departments because they have some independent budget authority, unlike other city departments, whose budgets are entirely controlled by the council. Of the three, the DWP is by far the largest source of private-sector contracts, awarding $96 million worth in fiscal 1997. The Harbor Department awarded $12 million worth, and the Airports Department could not readily determine its figure.
Svorinich, whose district includes the Los Angeles harbor area, introduced the bill two weeks ago after the concept emerged during discussions with his staff, said Svorinich spokesman Barry Glickman.
Glickman said that some work now being done by the private sector for the three departments could end up being performed by city employees; other work could simply end up being transferred from one city contractor to another.
“A lot will depend on what the departments will come back with,” he said.
As a hypothetical example, Glickman said that if the Harbor Department contracts out its street-paving work to the private sector, it might decide that responsibility could be shifted to the city’s Bureau of Street Maintenance, which paves streets throughout the city. The bureau would then decide whether it could do the paving itself, using city employees, or fold the paving work into a larger contract it already has with a private-sector firm.
The proposal was greeted enthusiastically by the heads of two unions with about 10,000 city employee members between them: the Architects and Engineers Association Union and the Service Employees International Union, Local 347.
“We didn’t know that Rudy (Svorinich) was doing this, but it’s a great idea,” said Julie Butcher, general manager of SEIR Local 347. “It will allow city departments to compete for contracts that now almost automatically go to the private sector.”
Butcher said there have been several instances in which contractors have charged higher prices for work that is similar or identical to what other city departments do. She said one contractor charged the Department of Airports more than $600 per tree on a tree-trimming contract, while the Bureau of Street Maintenance trims trees for $60 to $70 each.
But Adrian Moore of the Reason Foundation, a Santa Monica-based think tank that pushes for privatization, said that if the work now done by the private sector were transferred to the public payroll, city taxpayers would be stuck with a higher tab.
“The biggest advantage to privatization is that it gives city department heads flexibility to contract out excess work,” Moore said. “Once you take it back into the public sector, that means you have to hire more public employees, and they tend to stay on for 30 years or more, even if the specific job they were brought on to do is long finished.”
Moore added that there could be a built-in disincentive for managers at the Harbor, Airport and Water and Power departments to cede control over contracts.
