Riordan Studies Privatization in Indianapolis : Government: As he begins to look at other cities’ ideas, the mayor-elect finds he has much to learn and opposition to face. Union leaders express concerns about job losses.

Mayor-elect Richard Riordan ventured thousands of miles Monday from the city he will be governing to learn the ins and outs of a city operation he hopes to use as a model in Los Angeles.

Riordan met with Indianapolis Mayor Stephen Goldsmith, a fellow Republican, to learn about his city’s effort to replace government bureaucracy with marketplace competition--a concept that is gaining popularity nationwide but that strikes fear in many entrenched bureaucrats.

After huddling with Goldsmith and his aides for much of the day, Riordan emerged as a humble student, acknowledging that there is much more for him to learn. One lesson he did take away, though, is that privatization probably will ruffle feathers along the way.

“Anything that you do, you’re going to have people come forth with absolute, perfect, logical proof that what you did is wrong,” Riordan said. “If you worried about that all the time, you’d make no change whatsoever. So, sometimes you just have the courage to make changes and assume that a high percentage of those changes you make will be correct.”

There is already concern about Riordan’s plans among many Los Angeles union leaders.

“We are very suspicious that all of these are gimmicks with (only) momentary benefits,” said Jim Wood, the new head of the county Federation of Labor, which represents thousands of city workers and will play a major role in the debate.

In Indianapolis, nearly 200 city jobs have been eliminated since Goldsmith began his privatization effort 18 months ago, and some of the displaced employees have gone private as well, transferring to the companies handling city work, officials said.

Indianapolis’ transportation director, Mitchell Roob Jr., said Riordan will have to surround himself with privatization converts to be successful.

“He needs to recruit people who are zealots for his vision of Los Angeles and (who) have the business mechanics and political savvy to make it happen,” Roob said. “They have to know that if that means kicking out employees, then kick them out. He needs to treat it more like a corporation.”

As for employees, Roob said they should understand that they will not necessarily lose their jobs if they are willing to be flexible. “Some believe they can just wait out the Administration,” he said. “That’s the most dangerous thing they can do. They can’t stand in the way of the train.”

During his campaign for mayor, Riordan mentioned leasing Los Angeles International Airport to a private contractor and seeking bids for garbage collection. The meeting Monday seemed to give him other options--such as the privatization of street maintenance, printing and microfilming.

“I’d guess within three to six months you will see some major victories take place,” Riordan said. “But they will take place one by one.”

In Indianapolis, officials say the reforms recommended by the Service, Efficiency and Lower Taxes for Indianapolis Commission have saved the city millions of dollars.

Private companies now handle the city’s sewer billing, microfilm division, Department of Parks and Recreation nursery, public golf courses, disabled transit, private building inspections and animal control.

Instead of the term “privatization,” officials refer to the changes as “moving municipal services into the marketplace.” That, they say, better reflects that the city’s departments are streamlined and more competitive.

The city’s printing shops now compete with the private sector for Indianapolis’ printing and copying needs, and its transportation department sign shop bids for other government business.

Indianapolis is not the only city Riordan will study. He had planned a trip to Chicago on Wednesday to study privatization efforts there but scheduling conflicts with Chicago officials ruled that out. Phoenix and Houston also have unique programs that Riordan said he intends to investigate.

Union officials in Los Angeles say they intend to research more thoroughly the pluses and minuses of the programs in Indianapolis and the other cities.

Wood and other union officials also will cite what they say are the shortcomings of Los Angeles County’s contracting out of government business. The county pioneered the practice in California local government.

In the 1980s, when conservative supervisors pushed privatization, county officials say that private firms handled more than $730 million in services, from parking lot operations and management of small airports to vehicle maintenance and repair.

Chris Goodman, a county management analyst, said the county has saved more than $50 million a year through privatization.

But union leaders note that there has been little detailed, independent research to verify the savings claims. Dan Savage, a researcher for Local 660 of the Service Employees International Union, the largest county employees union, said having private companies handle government work has taken higher-paying jobs and replaced them with lower-paying ones with reduced benefits.

Shryer reported from Indianapolis and Lacey from Los Angeles. Times staff writer Rich Connell contributed to this story.