State Should Let County Decide on Privatization : Because of an archaic legal barrier, O.C. is prohibited from tailoring most employment practices to local situations and using the private sector.
The Orange County Board of Supervisors’ Privatization Task Force is on the right track. When it compiled a list of 56 government functions to contract out to private sector companies, the task force forced county department heads to look at government through a business person’s lens. Compiling the list was not easy; letting the contracts will be even harder.
For despite the county’s laudable actions, the state imposes unnecessary legal barriers to increased county privatization.
Few argue that privatization works under all situations. It works best for services that have a high level of private sector competition, like legal assistance or computer software maintenance. Counties save significant sums when they contract out projects requiring periodic technical knowledge and management expertise. My 1988 legislation that required Caltrans to contract out its engineering and design services works on the same principle.
Privatization is less effective in limited service markets with few qualified competitors and in operations limited by judicial constraints. Too often a county may save money during the first year of a contract only to find that contractors raise their rates the following year. With limited outside competition, counties must either agree to the costly new contract or restart a defunct county-run program. Other programs like Aid to Families With Dependent Children (AFDC) case management require too much legal and judicial oversight to contract out; counties may waste any short-term cost savings on long-term supervision expenses.
But whether or not a service justifies privatization, the Orange County task force will run into a state-imposed roadblock before it can contract out. The California Constitution lets counties that base their governance on a charter (like Los Angeles, San Bernardino and San Diego) privatize almost any county service, but counties that follow the general law (like Orange) can only contract out to the extent authorized by state law.
It’s more than a little ironic. State legislators complain about federal and court mandates that limit their ability to judge the merits and cost-effectiveness of a program, but we keep laws on the books that prohibit counties like Orange from exercising the same flexibility. Under state law, Orange County is prohibited from tailoring most county employment practices to local situations.
The employment distinction between general law and charter counties has no particular merit. Why should Tehama County be able to contract for a full range of services while Orange cannot? We have not anchored the limits applied to general law counties in any policy base. Instead, opposition from government employees’ unions in Sacramento blocks attempts to level the county employment playing field.
This year when the Orange County Board sponsored a bill to let it contract for food services at the Theo Lacy Branch Jail, a myriad of employee unions fought the change and helped stall the bill in the Assembly.
But their opposition must not tie the hands of the privatization movement. It’s time to buck the unions and let the county decide which services to contract out and which to provide via the county work force. This flexibility is a fundamental business right. We already grant the Board of Supervisors the authority to make thousands of policy decisions each year. Shouldn’t we give it the same ability to manage its own employees too?