Plan OKd for City Workers to Oversee Quake-Related Demolition Projects

Los Angeles Mayor Richard Riordan on Friday won approval of a plan to have the demolition of hundreds of earthquake-damaged buildings managed by city workers instead of by private contractors who he said would charge twice as much.

The mayor’s victory in a vote before the City Council represented a change in attitude for Riordan, the Republican who campaigned on a pledge to turn many government jobs over to private firms and called city bureaucrats “brain-dead.”

At the same time, three liberal Democratic council members, who have been champions of municipal employees, criticized the city’s Bureau of Engineering and said private contractors could do the job for less. They lost in a 10-3 vote.

“This demonstrates my commitment to support the most cost-effective way to accomplish the public’s work, whether we use public employees or private contractors, when appropriate,” Riordan said in a statement.

The City Council voted to place 79 workers from the city’s Bureau of Engineering into a new Earthquake Recovery Division, which will oversee demolition of up to 1,000 buildings. The public employees will award contracts to private firms that will raze the buildings and haul away debris.

The Bureau of Engineering estimated that city workers can do the job for $5.8 million, compared to $12.3 million that three private partnerships would have charged.

City Engineer Robert Horii said the city can do the work for less because it has lower overhead costs and will not factor in a 10% profit margin like the private firms.

Horii said the shift to city oversight became possible when the estimated number of buildings to be demolished dropped from 10,000 to a maximum of 1,000. Officials said they expect at least half to be demolished by owners or insurance companies, leaving 500 for the city to destroy.

With the scope of the work greatly reduced, Riordan Administration officials said the final stumbling block to public oversight was whether the Federal Emergency Management Agency would reimburse the city for its costs. Regulations had limited such payments to prevent cities from propping up city personnel costs with emergency funds.

But Riordan called federal budget Director Leon E. Panetta and wrote FEMA Director James L. Witt this week to ask for a waiver of regulations. Witt agreed to the waiver Thursday because of the projected savings of $6.5 million.

But Councilman Richard Alatorre noted that city officials had estimated what the private contractors would charge instead of allowing the companies to submit bids. “Everything depends on us being able to do it cheaper and better,” he said. “Let’s test it. Let’s see.”

But his request to give the firms more time to present a counterproposal was defeated.

George Pla, owner of one of the companies considered for the work, said the private firms would have presented lower bids if they had been given a chance. “Since when, in the history of the world, does government do something cheaper than the private sector?” Pla asked in an interview. “I’d like to know if anyone can cite an example.”

Riordan had said earlier in the week in an appearance before the League of Women Voters that a proposal to have three private partnerships handle the oversight work was “a pork barrel” that would benefit “a lot of friends of politicians.”

Riordan declined to identify the politicians or elaborate.

Alatorre has ties to four firms that were among about a dozen initially recommended for the lucrative contracts. Pla is a political ally and he once employed Alatorre’s son. Another firm is headed by a former campaign manager and a third by a former Alatorre chief of staff. The fourth company supported the councilman politically.

Alatorre said his connections to the firms had nothing to do with his support of private contracting. He said he simply believed that the private companies could oversee the work more efficiently.

Only council members Richard Alarcon and Mike Hernandez voted with Alatorre against the public oversight proposal.

Alarcon and Hernandez said they wanted to ensure that the work was done for the lowest cost. They also said private contractors would be more effective at recruiting minority-owned firms to do the demolition.