County Debate Swirls Over Privatization : Bankruptcy: Proposal to put Environmental Management Agency in private hands disturbs environmentalists and county employees. Money savings isn’t always guaranteed, some say.

Looking serious in blue and gray suits, the overflow crowd milled purposefully about the meeting room in a nondescript county government building, exchanging handshakes and business cards at an unprecedented gathering earlier this month.

“We’re looking for opportunities,” said K.C. Chaudhary, president of an engineering and public works firm in Napa, Calif. “We want to be part of the process.”

In fact, attending the conference already had made Chaudhary part of a process that is disturbing environmentalists and government employees countywide.

The gathering marked the start of the Board of Supervisors’ proposed privatization of the county’s Environmental Management Agency, a sweeping and unprecedented plan that, if put into effect, could mark the first time an entire county department is placed in private hands.

While county officials have so far been vague on exactly what privatization might mean, the options include turning over the entire agency--including its administrative functions--to a single private company or group of companies.

Or the county could contract out more of the services the EMA now provides, EMA officials said. Currently, about 70% of the agency’s responsibilities are performed by private companies under contract to the government.

One possibility that is definitely under consideration, they say, is leasing county parkland for management by private concerns.

The effort is being closely watched by government officials and private contractors throughout the state, who are seeking alternatives in a time of public sector cash shortages.

“This represents the cutting edge,” Chaudhary said. “All these government officials are strapped for cash and looking for a model.”

“It sounds very promising,” added Robert W. Poole, president of the Reason Foundation, a private think tank based in Los Angeles.

But Dennis Aigner, dean of UC Irvine’s Graduate School of Management, isn’t nearly as certain. “It’s not a panacea,” he said, noting that privatizing government agencies doesn’t always save money.

Proposals for operating one of the county government’s largest agencies--which builds and maintains roads, reviews development plans, issues grading permits, manages flood-control channels and oversees county harbors, beaches and parks--are due June 5.

A panel will select the three top bidders, whose names will be submitted to the supervisors. They are expected to make the final selection June 20.

Officials are not yet seeking cost estimates. Instead, they are asking bidders to address how they would handle public funds, the agency’s existing private contracts, employee relations, potential conflicts of interest and state laws that currently restrict certain contracts.

The move toward privatization is staunchly opposed by labor leaders and some members of the county-appointed privatization task force, who believe it could violate state law and question whether it would save money. It is also opposed by environmentalists and county employees alarmed by the specter of privatized parklands coupled with unbridled development overseen by private companies.

“It’s not the fox guarding the henhouse,” said one EMA supervising inspector shortly after the proposal was unveiled, “it’s a pack of wolves running rampant.”

Founded in 1974, the agency’s original purpose was to streamline land-use decisions then handled by existing county agencies with overlapping jurisdictions. All went well until 1992, when, faced with a dramatic building slump in Orange County, the Board of Supervisors voted to shrink the agency’s staff by 20%, consolidate a range of its services and put many of them out to bid.

Since then, agency officials said, the EMA’s annual budget has shrunk from $860 million to $745 million, its staff has been reduced from 1,600 to 1,279 and nearly 70% of its functions--about $500 million worth of work--has been awarded to private sector contractors.

In the face of the county’s bankruptcy, however, Supervisor Roger R. Stanton recently decided more could be done.

“We are in a crisis situation,” he said, “and everything is being looked at. The idea is to determine whether these functions can be better performed in the private sector or on the government side. The answer is not predetermined.”

EMA officials say they are open to the process.

“We are not afraid of asking the question of whether or not we should be privatized,” deputy director John Sibley said .

Privately, however, agency employees at many levels say they are nervous.

“You’ll have the private sector regulating the private sector, and that sounds questionable,” said an employee whose job includes inspecting private property for environmental contamination and who asked not to be identified.

Some environmentalists maintain that putting public parks into private hands would constitute a gross violation of the public interest.

“Privatization of parks will deprive people of utilizing what is rightfully theirs,” said Ilse Byrnes, president of the California Trails and Greenway Foundation, and a founding member of Friends of Caspers Park.

Opinion is more divided over the EMA’s building-review function. While few environmentalists trust private enterprise to be sensitive to environmental issues, some who have dealt with the agency on development projects are critical of its ability to safeguard the environment.

“What we’ve got is a tremendous crisis where people don’t think that government is responding to them,” said Flossie Horgan, a founding member of the Bolsa Chica Land Trust, which recently filed a lawsuit challenging the EMA’s environmental impact report on a major housing development proposed for the Bolsa Chica wetlands.

But the idea of turning the entire process over to private enterprise is frightening, Horgan said.

“It takes it out of the public and into the private sector,” she said. “And God knows what they would do.”

It is precisely the fear of what private park operators might do, in fact, that has caused most alarm in the environmental community. One thing is certain, they say: Volunteers who now help the county maintain its public park system are not likely to perform the same service for private operators.

“The public has a different feeling about private recreational areas than they do about land that is public,” said Elisabeth Brown, president of Laguna Greenbelt, a grass-roots environmental organization concerned with open space. “What kind of loyalty will people have to a privately run park?”

As an example of what can happen under privatization, many critics point to Featherly Regional Park, a 700-acre, county-owned wilderness camping area along the Riverside Freeway in Yorba Linda, 60 acres of which was turned over to a private management company in 1993.

As a result of the move, officials say, the county has saved about $450,000 a year in operating expenses.

But campgrounds that previously cost $10 a night now are priced at $12.50 to $22.50. Attendance has taken a nose-dive. And some would-be users complain that park conditions have deteriorated significantly since the county bowed out.

“The place is in a state of disrepair,” said Don Carr, who recently inspected the park as a member of Equestrian Trails, a group of riding enthusiasts, which ultimately decided against holding a weekend camp-out there.

County inspection records tend to confirm such impressions, citing a variety of maintenance concerns over the past two years, including overgrown grass, excess trash and restrooms in need of repair, said Robert G. Fisher, the county’s director of harbors, beaches and parks.

The park manager denies that conditions at Featherly have seriously declined under his stewardship, attributing negative inspection reports to the “sour grapes” of county employees whose jobs once included park maintenance. But maintaining the park, he admits, is more challenging under a system in which profits must be earned.

“We’re no longer subsidized by the taxpayers,” said Vernon St. Clair, a partner in St. Clair Investments and Mobile Modular Development Corp., which now operates the park as Canyon RV Park. The company’s maintenance staff numbers six, instead of the county’s 15, St. Clair said.

“We may have weeds occasionally,” he said, “but we work very hard at keeping them down.”

Besides the potential conflicts of interest in development issues and the private operation of parklands, critics of privatization say they fear its effect on environmental safety inspections, road maintenance and overall land-use planning.

At the recent bidders conference, however, the business executives in search of profit-making opportunities seemed to have made up their minds on the issue.

“This isn’t just about bankruptcy,” said Hardam S. Azad, representing a large engineering firm based in Atlanta. “We see it as a national trend that we want to be part of.”