Costa Mesa Outsourcing Debate: Privatization plan only part of solution
Editor’s note: The Daily Pilot has decided to publish opposing commentaries on Costa Mesa’s outsourcing plans. Wednesday’s print edition features arguments against the proposal from Geoff West, publisher of A Bubbling Cauldron, a local blog. Thursday’s print edition will feature arguments in favor of the plan from Councilman Steve Mensinger. Both pieces can be read together on DailyPilot.com.
Question: Which Costa Mesa official made this statement:
“Having already reduced non-personnel operating expenditures to a minimum level from prior years, management was faced with the necessity of significant reductions in personnel costs …
"[T]here has been a substantial reliance on the use of reserves [$35 million over the past three fiscal years] to avoid more significant cuts in [city] programs, services and personnel. Reserve levels now stand at a point where they can no longer be safely accessed for on-going operating expenses.”
Answer: Then-City Manager Allan Roeder painted this stark financial picture in the introduction of the city of Costa Mesa’s 2010-11 budget.
Unfortunately, the city’s financial health has only gotten worse.
Because revenues for this fiscal year, which ends June 30, have been less than projected, the city is facing a $1.4-million shortfall. And next year, another budget deficit projected to be at least $5 million looms.
The $5 million does not include necessary new technology, new capital improvements or new services. It also does not include deferred maintenance spending that was set aside the past few years and can no longer be ignored. The city has even stopped paying for fertilizer and weed abatement products for the grass in its parks and sports fields.
In other words, we could be looking at an estimated $15-million budget shortfall.
All of this means Costa Mesa will be forced to make even more cuts.
For this reason, the City Council voted March 1 to send notices to 213 employees — nearly half the city staff — that their jobs would be outsourced in six months.
Contracts with employee associations require a six-month warning period, and the council felt that the six-month clock needed to start ticking because of expected budget shortfalls for the next fiscal year.
During the six-month period, the council — with a lot of help from city staff — will determine which positions would make sense to outsource and also work hard to make sure as many affected workers as possible find jobs with the contracted companies or government agencies. We will put into the Reports for Proposals (RFPs) provisions that give city employees hiring preferences if that company or agency is awarded a city contract.
For instance, the Orange County Fire Authority, which already has submitted an outsourcing proposal to the city at the request of the firefighters’ association, has promised to hire every Costa Mesa firefighter (more than 90 employees) if given the contract.
We will spend as much time as needed to determine which city services would be a good fit for outsourcing. From our own experience and from other cities, we know that it’s possible to privatize parts of local government and still deliver quality services to residents and visitors. For instance, in the early 1990s, we hired a contractor to run the Costa Mesa Country Club, two 18-hole municipal golf courses that had been managed by city employees. To date, the arrangement has worked well for all parties.
Costa Mesa has also successfully outsourced its tree-trimming operations, along with grass cutting, elements of street maintenance and other services. Neighboring Newport Beach has had little complaints from its outsourcing efforts, as has Irvine, which has a private company operating its jail.
Easy fixes to temporary budget woes are a thing of the past. We now face difficult choices to make sure Costa Mesa lives within its means. Outsourcing will be part of the solution — we just won’t know its scope until we receive bids back from companies and government agencies and compare their costs and services to the city’s. This will happen within the next four months or so.
In the meantime, Chief Executive Officer Tom Hatch reached out to employee associations last week and started to talk informally about how we can work together to solve this problem, which is at least a start. And we are looking hard at other ways to reduce the budget gap — can we share resources within neighboring cities, for instance — and we willing to listen to any other ideas put forth.
If we are staring at anywhere close to a $15-million budget shortfall, outsourcing alone won’t come close to bridging the gap. We’ll be forced to endure more layoffs and further cuts.
In the end, outsourcing isn’t the solution to our budget problems. But if done right, it can be a step toward fiscal health.
STEVE MENSINGER is a Costa Mesa councilman.