City Hall Privatization Clash Heightens

Walter Prince thinks the fix was in.

What other explanation could there be, figures the owner of a Northridge janitorial services firm, for the fate of his contract bid at City Hall? How was it that city workers were allowed to use information from winning competitive bids, including his own, to develop their own proposal for keeping in-house some work purportedly intended for private contractors?

And why, Prince wants to know, did a key City Council committee give its blessing last week to the workers’ proposal as a good deal for the city when, he and others are contending, it does not deliver the savings it promises?

Prince, who is protesting actions taken last week by the City Council’s Personnel Committee, has suddenly found himself in the middle of an escalating tug of war between the liberal, pro-labor council majority and the economy-minded, pro-business Riordan administration.

The issue is private contracting, and it basically comes down to this: When is it better to have city employees do taxpayer-funded work and when is it better to go outside?

Both sides say this is not a fight about ideology and that their goal is good, efficient service at a reasonable price. But council liberals and union leaders have long suspected that Mayor Richard Riordan is too much motivated by the bottom line, too determined to cut the city payroll. And the mayor’s office suspects that pro-worker forces are really most interested in saving city jobs, salaries and benefits and are trying to manipulate the system and sneak through worker protection measures any way they can.

“I guess it’s a political deal, but who the hell knew it at the time?” Prince said this week. “We just thought it was about a bunch of toilets that needed cleaning.”

A year and a half ago, his company submitted the winning bid for custodial services at the Los Angeles Police Department’s new training academy in Westchester.

Not long after being notified by the Department of General Services that his firm was the lowest qualified bidder, Prince said, he was told that the contracts for his and other firms that had successfully bid for various services at the Westchester facility were being delayed by budget constraints.

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But the delay was for an entirely different reason. Jackie Goldberg, chairwoman of the council’s Personnel Committee, said it was because she and leaders of the city’s biggest employee union, representing about 8,000 blue-collar workers, had discovered that the union had not been notified before work for the Westchester facility--including custodial, security, supervisory and groundskeeping and landscaping services--went out to bid. So the Personnel Committee invited the Los Angeles City Employees Union, Local 347 of the Service Employees International Union, to submit its own proposal after the fact.

Goldberg has been trying to develop a policy that gives city service workers first crack at work that is being considered for outside contracting, as the union’s contract has required since 1994.

Last week, the committee hailed the union’s alternative proposal for doing the work at the Westchester facility as a pioneering example of the common good that can be achieved when city employees work together to come up with new ways of approaching a job.

In consulting with the “customer”--the Police Department--and other city departments, Goldberg said, the union found a better and probably cheaper way to take care of the training center.

Local 347 said it could do the job for $546,322 a year, compared to an outside bid of $579,025. But it also wanted a contingency fund of $100,000 to cover unforeseen costs. That is no different from changing the private contractor’s terms to add more money if new circumstances arise, union representative Julie Butcher said.

“This is true innovation, true teamwork,” Butcher said. “It’s an honest effort to propose an alternative that will serve the taxpayers better, and give our workers a chance to develop new skills” while saving their jobs, she added.

The mayor’s office, sensing an end run, hit the ceiling. Michael Keeley, the mayor’s chief operating officer, demanded that General Services and the chief administrative officer go over the union’s figures. Prince contends that the union’s proposal did not address the same requirements that he and other private bidders had to cover; union officials said they came up with a different proposal custom-designed to the Police Department’s needs.

“All the mayor wants is a fair fight; he’s not into these behind-the-scenes, contract-stalling practices,” said Noelia Rodriguez, Riordan’s press secretary. Riordan has said repeatedly that he is “not an ideologue” on contracting and has publicly acknowledged instances in which city workers were a better choice than a private firm, most notably in the vast debris-removal program launched after the 1994 Northridge earthquake, Rodriguez added.

Goldberg said it was not her intention to tilt the scales in favor of the union. If the system had worked as intended, she said, the union should have had its chance to work up a proposal before the bids were ever sought.

“If employees can find a better, cost-effective--though not necessarily cheaper--way to do the work, then everybody benefits. If they don’t want to try or if they can’t get close to a contractor’s price, then we go out to bid.”

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Goldberg defended what happened with the Westchester bids as a fluke. Because it was a new facility and there was no existing contract or budget record to use as a guideline for evaluating the union’s bid, the winning bids, along with other financial data, were used instead.

“We were trying to make it up to [the union] for overlooking them in the first place, for not following our own rules,” she said. “I really don’t believe the public wants cheaper services if it means more people are not going to be able to make a living wage, have health insurance, or [have to] go without other basic needs that will cause them to end up relying on public services. . . . It’s all interconnected.”