It was a cost-cutting move right in line with Mayor Richard Riordan's belief that many jobs now done by city workers can be handled more efficiently by private firms: Two years ago, the city turned over protection of the Barnsdall Art Park in Hollywood, including the Frank Lloyd Wright-designed Hollyhock House, to a private security company.
The park's security was assigned to Alhambra-based Inter-Con Security Systems, which also handles several well-known city sites, including the Watts Towers and some Downtown city offices.
The company is a highly regarded firm that also guards county and state buildings as well as U.S. embassies abroad. It is also politically connected: Its president, Enrique Hernandez Jr., was until recently the president of the Los Angeles Police Commission.
But by many accounts, this attempt to let business run a piece of government failed. To critics of privatization, it stands as another example of how replacing government workers with lower-paid private employees carries a dangerous cost.
For example, when a local gang harassed park staffers and visitors, the contract guards neither confronted them nor called the police, according to the park's director. Last month, an employee returning to work in the afternoon was chased out of the park by the armed gang, who shot out his car's rear window as he fled.
Property was also put at risk. The Hollyhock House, which is filled with valuable furniture, artworks and Lloyd Wright architectural models, was repeatedly left unlocked at night by the contract guards, according to city memos.
As a result of privatizing security, City Councilman Mark Ridley-Thomas complains, "the city's cultural treasures and other assets are at risk."
The problems at Barnsdall Park were among more than 100 complaints reported to the city since July, 1994, concerning the work of Inter-Con.
The complaints include those of guards being several hours late for shifts, sleeping on the job, not being able to understand directions in English and one case of reporting for work drunk.
As a result, the city controller is reviewing Inter-Con's record in carrying out its nearly $1 million-a-year contract with the city General Services Department, part of $3.6 million worth of city contracts held by the firm.
The audit was ordered by Ridley-Thomas as chairman of the City Council's administrative services committee.
Weeks before, the same committee recommended that the Inter-Con guards at Barnsdall Park be replaced by city guards; the full council has yet to vote on the recommendation.
Ridley-Thomas said the controller's audit will be used to "clarify the extent of Inter-Con's noncompliance" with the city contract, and help the council to decide whether to renew Inter-Con's contract.
The scrutiny of Inter-Con comes at a time of heightened anxiety over security at public buildings, after two fatal Downtown shootings this summer. One of the shootings, in which a disgruntled city worker shot his supervisors, took place in July at Piper Technical Center, a city facility that is guarded at night by Inter-Con.
The Piper Tech shooting occurred during the day, when Inter-Con guards were not responsible for the site's security. However, 19 of the 104 complaints recorded by the General Services Department concern the night guards at Piper Tech. They include repeated charges of guards coming to work late, sometimes by as much as two hours, and one complaint of a guard asleep at his post.
City workers in Downtown office buildings have also complained about Inter-Con's service. In a December, 1994, memo asking for the return of city security officers, City Engineer Robert Horii wrote that "deterioration of security" caused by the shift from city guards to Inter-Con guards presented "a real hazard to employee safety."
The previous month, Horii said, a Bureau of Engineering employee at 650 S. Spring Street reported two drug dealers working in the employee parking lot to the police. The dealers were arrested, but when the employee returned to the building he was threatened at gunpoint by a "lookout" for the dealers. The lookout had used the building lobby as his base, unnoticed by the contract security guard, according to the memo.
Without the return of city guards, Horii warned, "all we will be doing is providing a fresh and lucrative supply of victims."
Although privatization is central to Mayor Riordan's agenda, contracting city security began before he took office in 1993. Through increased use of contract guards, the General Services Department, which oversees security for most city departments, has cut its security force from 80 officers in 1980 to 51 officers this year.
Inter-Con was founded in 1975 by former Police Commissioner Hernandez's father, Enrique (Hank) Hernandez Sr., an ex-Los Angeles policeman. The firm was first hired by the city to provide security in 1989.
Inter-Con Vice President Robert Riley said that the company "is more than willing to participate" in the audit. He contended that until this summer, "our feedback was that the city was very pleased with our service" and that "the gap between what is stated and what is fact is horrendous." The firm has received several letters from city officials praising its guards.
Riley said few of the 100 complaints that the General Services Department reported last year were forwarded to Inter-Con. A General Services memo listing the complaints indicates that they were faxed to Inter-Con, but Riley said the company did not receive most of the faxes, and that the correct procedure for reporting complaints was to send them through certified mail. He said his firm has no record of guards failing to report gang members in the park to the police.
Riley said his company was hurt in 1994 when the city cut the hourly rate it pays for security to $7.74 from $10.15, forcing the company to scale back its supervision of guards. Supervision "could have been better," Riley said. In July, when Inter-Con's contract expired, the city continued it on a month-to-month basis and raised the hourly rate to $10.15 because of a higher anticipated turnover of guards and the need for more supervision.
Gonzalo Cureton, the General Services Department's director of security, declined to comment on Inter-Con's performance. However, Hernandez angrily complained at a City Council meeting in July that Cureton had said in a meeting with him: "Inter-Con sucks." The next month, Dennis R. Luna, an attorney for Inter-Con, wrote a letter to Cureton accusing him of slander.
An August report on Inter-Con by Randall C. Bacon, general manager of the General Services Department, was kinder.
It maintained that "the best security service is provided by city staff," since the General Services Department has a say in the recruitment, selection and training of the officers. Because city pay and benefits are better than private security companies, Bacon wrote, "higher-quality candidates who see city service as a career rather than a job" become city guards.
Nevertheless, the report said, "the ideal security staffing is a mix of core city staff supplemented by contract security" because contract guards are cheaper and--unlike city guards--are authorized to carry guns.
Critics of contracting government services have seized upon the Inter-Con contract as an example of the failure of privatization.
"You definitely get what you pay for," said Julie Butcher, spokeswoman for Service Employees International Union, Local 347, which represents city security guards. "Unfortunately, contractors often get the cheapest workers money can buy, who are highly transient and minimally trained."
City guards receive a minimum of 40 hours of training, compared with 16 hours that Inter-Con requires. Starting pay for city guards is $29,000 annually. Inter-Con's Riley would not say what his company's guards are paid, but city documents list the cost to the city for contract guards as starting at $18,000 a year.
The City Council-ordered controller's audit of the Inter-Con contract coincides with a flurry of audits of city departments ordered by the mayor. Since Riordan took office, six management audits of city departments have been completed, with 10 more in progress.
Those audits have scrutinized government agencies, with some calling for the contracting of services.