LAGUNA NIGUEL : Street-Work Pact Saves City Money

An experiment in hiring a private company to maintain streets has proven more successful than anticipated, saving the city an estimated $360,000 in the first year and providing more efficient service, officials told the City Council this week.

Like many new South County cities, Laguna Niguel previously contracted with the county to provide street maintenance services. Last June, the city became the county’s first to contract the services with a private firm.

“Here, we have a living laboratory on how (privatization) is working,” said Councilwoman Patricia C. Bates.

Ken Montgomery, the city’s public works director, said that based on the performance so far of Charles Abbott Associates Inc., the city expects to spend $360,000, or 32%, less in this fiscal year than it paid the county in fiscal 1993.

City Manager Tim Casey said that when the city decided to contract with a private company, it was told to expect annual savings of up to 15%.

In the previous year with the county, the city spent $1.13 million for street maintenance. Under the private contract, the city expects to spend about $770,000 from July, 1993, through June, 1994.

In addition, Montgomery said, the number of street-related complaints and requests has been reduced, and response times for repairs are shorter.

And the company’s patrols to remove debris, illegal signs and weeds have improved the aesthetics of city streets, Montgomery said.

According to an Abbot Associates report, the city spent an average of $47,963 a month on street maintenance from July through December, compared to $80,760 a month it would have spent with the county.

The same report showed that county crews took an average of 56 days to respond to complaints or requests in the first six months of 1993. Abbott crews responded in an average of 6.5 days.

The results have been so dramatic that Councilman Mark Goodman, who had opposed the move toward privatizing street maintenance last year, gave it his full support Tuesday.

“It’s always nice to be proven wrong when you end up with an extra $300,000 in your budget,” Goodman said.

Casey said privatization makes sense, especially for new cities like 5-year-old Laguna Niguel, which has a population of about 50,000 and whose fiscal 1994 budget is $13.8 million. The city saves money because it is not paying for full-time equipment and personnel that are used part time.

“All you’re buying is production,” Casey said. “You’re not buying excess capacity anymore.”