County Already Has an Appetite for Privatization : Government: It contracts for $2 billion worth of work, and is looking for more that private sector can do for it.

Hundreds of county government services--from custodial work to drug rehabilitation clinics and paper-shredding centers--are successfully being managed by private companies, according to an internal review conducted by the county and obtained last week.

The county’s 48-page inventory turned up more than $2 billion in contracts that the county has with private companies, most for onetime construction or engineering projects but some for services provided yearly.

They range from minuscule--$910 a year for typewriter servicing in the public defender’s office--to the enormous--$80 million for a private contractor to build the Seven Oaks Dam, part of the Santa Ana River flood control project.

And they include services in nearly every county department, though a few show far more private sector contracting than others.

“I was amazed,” said Vicki Stewart, the analyst in the county administrative office who compiled the report. “Everyone talks about L.A. (County) and their success with private contracting, but this is something that’s being much more widely practiced here than people are aware of.”

Board of Supervisors Chairman Gaddi H. Vasquez, who has reviewed the inventory, agreed.

“As that list shows, Orange County has been engaged in various forms of privatization for a long time, and with great success,” he said. “Notwithstanding that, these are trying financial times, and we need to expand on what we’re already doing.”

The county inventory is one of several documents helping to guide the workings of a recently formed study panel with a controversial mandate. The panel, made up of top county officials and local business leaders, is trying to ferret out ways that the county can save money by turning some operations over to the private sector.

It has drawn guarded criticism from leaders of county employee unions and others who worry that private-sector contracting could jeopardize jobs and leave county residents with less control over the services they receive from government.

The panel’s mission is to recommend areas ripe for private contracting. Though the inventory reveals that a huge number of operations are already handled that way, panel members said many more possibilities remain.

“In some areas,” said Larry Seigel, a partner with Ernst & Young and a member of the panel, “the county has aggressively moved forward, and in others there are a lot of people, inside the county government and outside it, who believe that there is more to be done.

“There’s still roughly 17,000 positions with the county,” he said. “That’s a lot of jobs that are being done in house.”

Kevin Teasley, spokesman for the Santa Monica-based Reason Foundation, a nonprofit group that advocates private-sector contracting by local governments, agreed.

“Generally speaking, we tout Los Angeles County as the leader, not Orange County,” he said.

In Los Angeles, for instance, private companies manage some welfare programs, as well as run all of the county’s parking lots and one of its mental health clinics. They also supply temporary staff for its libraries, provide much of its building security and oversee its records storage, street resurfacing and golf course management, among other things.

Chris Goodman, Los Angeles County’s contracting coordinator, said the county estimates that it has saved $731 million since it began contracting government operations in 1979.

In the fiscal year that ended last month, the county saved about $53 million, he added.

“That allows us to take that money and spend it somewhere else,” he said. “In these times, most people don’t have an extra $53 million lying around.”

That is certainly the case in Orange County, where budget officers are struggling to make up a huge shortfall. Estimates fluctuate almost daily, but officials say the government could be facing a deficit of more than $65 million this fiscal year, which began July 1.

Private contracting has been widely suggested as a way to narrow that gap, if not in the coming year then at least in subsequent ones. Advocates say the government might save 10% to 40% on most services that it turns over to private companies.

The study panel has tried to target areas that could produce significant savings with little controversy; so far, it has winnowed a list of 144 suggestions down to about 30.

Landfill operations, security services, custodial work, park maintenance and varied construction and inspection services all remain on the panel’s list, which will be reduced to 10 or 12 before being submitted to the Board of Supervisors.

Each of those suggestions has been tried by other large governments, and some have even been contracted out by county government agencies, the inventory indicates.

Still, panel members say the county could save large sums by expanding current efforts.

“There are still some big-ticket items out there that we haven’t tried yet,” said one panel member who asked not to be identified. “Landfills, for instance; there’s an operation where we could really save.”

But that suggestion threatens to spark opposition from both employee groups and environmentalists, several of whom said last week that they would want assurances that landfill operators could be trusted to run safe sites.

“I would hate to see the county lose control over the landfills,” said Pete DeSimone, manager of the National Audubon Society’s Starr Ranch Sanctuary. “If the contractor comes in and does a state-of-the art job, that’s great, but they’ve got nobody to answer to.”

Security services also rank high on the study panel’s list, panel members said. Security at John Wayne Airport alone costs the county about $3.2 million a year, panel documents indicate.

Other governments have tested the idea of contracting security, panel members say.

“One area that the committee has spent some time on that I think is especially interesting is safety officers, whether it’s the Sheriff’s Department or the marshal’s office or security services,” said Todd Nicholson, executive director of the Orange County Industrial League and a member of the panel. “That’s an area where we might be able to really make a difference.”

Winning support from county employee unions will be tough, however. They are unlikely to accept proposals that involve laying off their members, and several union spokesmen have already expressed reservations about broader private contracting by the county.

However, Goodman of Los Angeles County may have lessons to suggest for Orange County as it heads down the road toward divesting itself of government operations.

That county requires private contractors who take over county services to offer jobs to the county workers they displace.

That, Goodman said, has helped smooth the transition in Los Angeles and has buffered the county from labor opposition.

“It’s a sensitive and also a pragmatic approach,” Goodman said. “If you had massive layoffs as a part of this process, I doubt you’d get much support for it. And it helps to get support wherever you can find it.”

What’s Already Private

A recently completed Orange County government inventory found that hundreds of government services and projects are being done by private businesses under contract. Here is a sampling: Service: Annual Cost Serving legal documents on people owing money to the county: $25,000 Legislative advocacy In Sacramento: $225,636 In Washington: $192,000 Representing and defending the county in some lawsuits: $450,000 Methadone detoxification and maintenance clinics: $458,592 Ambulance and medical van services: $307,500 Home-delivered meals to AIDS patients: $14,581 Maintenance of boarding bridges, baggage system at John Wayne Airport: * $848,004 Document destruction for Marshal’s office: $2,500 * Plus costs Source: County Administrative Office privatization study, contract inventory.