Pest Unit’s Private Jobs Test Limits

At a time when government is being asked to do more with less money, one obscure public agency believes it has found the answer.

The Orange County Vector Control District, charged with controlling mosquitoes and other disease-transmitting pests, sells extra services to other government agencies and even one business, Disney’s California Adventure theme park. This lets the district not only stay on budget, but also turn a profit.

To help motivate employees, the district shares some of the excess cash with its 60-plus workers, who received an average bonus of $2,500 last year.

But the district’s biggest outside client, the state Department of Food and Agriculture, is demanding that the agency cancel the bonuses. And private pest control companies question why they are being forced to compete with a public agency whose trucks and equipment are funded in part with their tax dollars.

Until 1999, the Vector Control District operated like most others. Workers were responsible for monitoring Orange County for mosquitoes, rats and other disease-bearing pests and controlling those threats in public areas by setting traps and spraying chemicals. Their work was supported exclusively by an annual assessment -- now $1.92 -- levied on every home and business property in Orange County.

Robert Sjogren, the district’s manager, traces the bonus idea to a financial crisis in 1999. At a planning workshop that year, the district’s board of directors instructed staff to find creative ways to increase revenue -- or face layoffs.

With the board’s approval, the district decided to sell extra services -- including the kind of work pest control companies do -- on the open market. It now has contracts for mosquito control with UC Irvine and the U.S. Naval Weapons Station and for rat and mosquito control with the state Department of Transportation. Disney pays the district $3,000 per year to kill flies that breed in a pond at California Adventure.

Some of the work is performed by district employees during regular business hours and some is done after hours, for which the moonlighting workers are paid overtime.

In 2000, the district acquired another outside contract, this time with the state agriculture department, to control red imported fire ants in south Orange County. The state has paid an average of $2.6 million a year for that work, and the money goes into a fund designated for the district’s earnings for extra services.

Sjogren said he suggested sharing the profits out of that fund as a way to compensate his staff for the additional work. In 2001, the board of directors adopted the plan. Two-thirds of the profit from outside work goes back into the district’s general fund, where it helps reduce the need for increased assessments on property owners. One-third is distributed in bonuses. The district gave out about $150,000 last year and has set aside $200,000 that was to be paid last month.

Those bonuses are now on hold, however, after the state learned about the bonuses during an audit and fired off an angry letter to Vector Control District officials in June, questioning why a share of the money it paid to eradicate a dangerous pest is instead being divided among government employees.

“We do not dispute the fact that the district is entitled to reasonable overhead costs. However, we do have questions as to whether the disbursements [to employees] are allowable,” state agriculture official Pat Minyard wrote.

Sjogren said he doesn’t think the state has a right to question how his district spends its money. The state agreed to pay a flat fee for fire ant eradication and the district is performing the work, he said. Besides, he noted, the state is benefiting because his work force is motivated and efficient.

“I have people coming to me one time every week or two identifying how we can save $5,000 here or be more efficient in another area,” Sjogren said. “I believe in the free-enterprise system. I think incentives work.”

Some observers think the district’s strategy might be a good one. “It actually sounds like a pretty innovative way to motivate a work force,” said Mark Petracca, a political science professor at UC Irvine and chairman of the Irvine Planning Commission. “And it’s a way to maintain an important service function without having to go to the taxpayers and ask for a tax increase.”

But at least one district board member says the state’s objections may have merit.

“I would question the taxpayers’ money being given in bonus forms like that,” said the member, Carolyn Cavecche. “That’s something the board needs to look into, especially if we’re going against what the state money was targeted for: to take care of the red ants.”

The bonuses also do not sit well with pest control companies, who in 2000 argued unsuccessfully that they, not a government agency, should handle fire ant control.

“I’m very disappointed to hear this. They took the position they were out to help the people and wipe out the red imported fire ant,” said Brian Olson, owner of the Bugman, a pest control company in Fullerton.

“If that money is for eradication, that money is for eradication.”

Harvey Logan of Pest Control Operators of California, an industry association, said he has heard of no other public vector control agency that is bidding on government and private contracts and splitting the proceeds with employees.

“Given the current budget mess the whole state is involved in, I feel that it’s totally inappropriate,” he said.

Orange County pest control companies have been frustrated over not being allowed to bid on the work that state agriculture officials gave to the Orange County agency. The state gave the money to Orange County, and the Board of Supervisors voted in 2000 to give the contract to the Orange County agency without putting it out to bid, said Rick Le Feuvre, the county’s agricultural commissioner.

“A lot of the work they’re doing should be confined to the private sector,” Logan said. “You’re taking business away from private enterprise, and private enterprise is helping support the very agency that is taking those jobs away.”

Sjogren offers no apologies to his competitors. “If you’re not going to raise taxes, it’s necessary to bring in revenues,” he said. Sjogren noted that only Orange County voters could approve a rate hike.

And if you’re going to compete in the private sector, you might be wise to learn from the private sector, he said. That’s where the bonuses come into play.

“I think it makes sense, whether it’s private or public,” said Michael Hearst, the district’s spokesman. “You compensate people for a job well-done. I came from the private sector, and I don’t know why they don’t do this more in the public sector.”

There’s evidence that the agency knew the bonuses might be controversial even before the state intervened. In April, acting on the advice of its attorney, the district board voted to eliminate the word “bonus” from its policy and replace it with “distribution.”

Asked to explain the change, Sjogren said, “It was recommended by the attorney. It’s a choice of words, I guess.”

Also acting on advice of the agency attorney, Sjogren has thus far refused The Times’ request to review a list of employee bonuses, although records of payments to government employees are generally open to the public.

This is not the first time the district’s finances have come under scrutiny. Last month, Sjogren refunded $163,000 to the state after discovering that his agency had overbilled the state Department of Food and Agriculture for the fire ant program.

Sjogren, who is paid $103,000 per year, said he has not accepted a bonus to avoid the appearance of a conflict of interest.

He did accept unrelated bonuses of $15,000 and $10,000 the last two years, with the board’s approval.