Study Urges L.A. to Privatize More Services : Government: Conservative think tank calls on Riordan to follow up on campaign pledge to turn city work over to outside firms. Such moves could save $120 million annually, report says.

The city of Los Angeles could save at least $120 million a year by turning many government services over to private firms, but instead is falling out of step with a privatization trend that is sweeping the country, according to a report to be released today by a conservative think tank.

The Reason Foundation study recommends that the city’s trash collection, paramedic service, workers’ compensation claims administration and golf course operations be turned over to private companies.

The authors of the report said they hope that it will re-energize privatization proposals that have languished at City Hall, despite the election last year of Republican Mayor Richard Riordan.

Riordan had said he wanted companies to compete with city employees to provide city services. But 16 months after campaigning on a plan to put Los Angeles International Airport in private hands to pay for more police, Riordan now shies away even from a plan to privatize one of the city’s golf courses. He also has backed away from a plan to hire a private firm to issue parking tickets on the Westside.

Formidable roadblocks to private contracting have been erected by city employee unions and some City Council members, and Riordan has chosen to save his political muscle for other fights.

“The mayor has a number of priorities,” said David Cobb, a mayoral assistant who has investigated privatization. “The first one is public safety, then economic development, and third is government efficiency. As we work our way through the agenda, we might find time for these other things.”

Riordan has said many times that he will not support privatization proposals that lay off city workers or rely on paying substandard wages. He also prefers to call contracting efforts “competitive benchmarking,” saying that the practice will allow the city to see how efficiently its departments are run.

The authors of the report argue, however, that they need the popular mayor to lead the charge for the proposals more aggressively. The money saved could be used to hire as many as 1,600 police officers, furthering Riordan’s top goal of public safety, said Reason Foundation President Robert W. Poole Jr.

“The mayor needs to do more in the bully pulpit,” Poole said. “There are structural problems in the city’s finances nobody seems to notice. The City Council is just going along fat, dumb and happy, as if none of these problems are there. We are on a financial precipice and we are saying, ‘Wake up, guys!’ ”

But council members and city union representatives have argued that despite the mayor’s reassurances, the proposals could cost public workers their jobs or force them to do the same work for private firms that pay less and provide substandard benefits. They said the contracting efforts would be particularly unsettling for minority communities such as South-Central Los Angeles.

The report by the Los Angeles-based Reason Foundation rejects those claims, saying that private firms can take over with minimal job loss and offer competitive pay and benefits.

The greatest savings potential in the city is in garbage collection, the study says. Los Angeles spends $21 per housing unit each month to collect trash, compared to a range of $9 to $15 for 14 other cities surveyed. As much as $42 million could be saved if the whole city shifted to private collection, the report says.

Much of the high cost of the current system comes from poor maintenance, which leaves trash trucks out of service and drivers waiting to start their routes. The Reason Foundation report also claims that with as few as 450 households on their routes, city refuse workers are less productive than private sector workers, who serve 700 homes or more.

The report suggests the trash haulers should work longer routes or a regular eight-hour day, rather than the current system that permits them to go home whenever their route is completed.

The report concedes that some benefits are less generous in the private sector, but it says wages are about the same. And it claims that city workers would not have to lose their jobs, if contracts required that the private firms hire displaced city employees.

But political opposition to trash contracting became clear last January, when a majority of the City Council joined rallying workers to say they would block any privatization attempts by Riordan. Said Councilman Mark Ridley-Thomas at that Martin Luther King Day event: “Don’t balance the budget on the backs of working people in the city of Los Angeles!”

Paramedic service is also targeted for private sector intervention in the report, which claims the net savings could be $30 million a year. The primary savings would be realized by concentrating private paramedics on shifts when they are most needed, rather than the 24-hour shifts that Fire Department paramedics work, the report says. The study also suggests that a private firm would more aggressively collect bills from people who use emergency medical services.

By having the private ambulance crews respond to calls that are life-threatening, Fire Department paramedics would be freed for more pressing calls, the report contends.

Los Angeles Fire Department officials essentially agreed with that position earlier this year, following a pilot program that used private ambulances for non-emergency calls. But some private ambulance operators raised questions about whether they would bid to provide the service in high-crime areas of the city, where calls might be more dangerous and bill collections more problematic.

A more receptive political climate might await a proposal--also advanced in the Reason Foundation report--to have an outside firm administer the city’s troubled workers’ compensation system.

Last summer, a high-ranking city official was fired after being accused of heading a ring that bilked the workers’ compensation system out of about $1 million. And audits have found that the city pays more than twice the national average for claims.

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Those revelations provided the incentive for Councilman Joel Wachs this fall to advocate a private takeover of the system. The plan is pending in committee, although the city bureaucrats who run the system have advocated a more cautious approach that would leave many claims in the hands of city workers.

The Reason report suggests that $22 million a year could be saved.

Two other proposals advocated in the report--and once fervently pushed by Riordan--now are on the back burner.

A plan to have a private company issue parking tickets on the Westside has given way to talks to “increase the productivity of the city’s parking enforcement program,” said Cobb, the mayoral aide. Union opponents had suggested that the private takeover, estimated to increase revenues by $19 million, would inevitably be expanded and cost city workers their jobs.

Plans to turn at least one of the city’s 12 golf courses over to a private firm has also run into a political obstacle, according to the mayor’s office. “Unless we can find a council person who will support a golf privatization program at one of the courses in their district, we are not going to proceed,” Cobb said.

Privately run golf and other suggestions in the Reason report total about $7 million more in savings for the city.

The lack of competition in Los Angeles is in contrast to a number of other cities that also elected mayors promising greater efficiency, the report contends. Chicago Mayor Richard M. Daley has placed about 40 services under contract, from water customer billing to drug treatment. Indianapolis Mayor Stephen Goldsmith has saved his city $28 million a year by opening nearly 60 programs to private contracting.

And New York Mayor Rudolph Giuliani has waged an aggressive campaign to hire school custodians from private firms to replace public employees who make up to $80,000 a year.

But Poole acknowledged that the Los Angeles City Charter gives Riordan less power than his counterparts in those cities.