Introducing competition to the public sector is an essential part of delivering cost-effective services to taxpayers. What happened earlier this year in Placer County is just one example of how millions of savings can be realized by privatizing a public service. By replacing county employees with a private firm to provide inmate food services to county inmates and juvenile offenders, starting in 2018 Placer County will save over $600,000 per year. Here is how these savings can be realized:
1 – Give Agency Authority to Outsource: Ensure that your agency has the authority to contract for government services. The Placer County Charter has a provision under “general powers” that states as follows: “The Board may contract with an independent contractor to provide any services required of, or performed by, the county if it is more economical to do so.”
2 – Conduct Cost Analysis: Placer County engaged in a comprehensive analysis of the cost and benefit of continuing to use county employees to provide inmate food services vs. using outside private contractors. This process was conducted concurrently with taking bids from qualified contractors.
3 – Enact Resolution and Award Contract: On March 7, 2017 the Placer County Board of Supervisors awarded a five-year, $13.2 million contract with Aramark Correctional Services.
Making changes like this impact existing county employees, but to mitigate this, Placer County obtained an assurance from Aramark that all county employees interested in working with the contractor will be interviewed. In addition, arrangements were made for staff who do not transition to Aramark to receive assistance from the county’s Human Resources department and Business Advantage Network, to provide job training and assist county employees in identifying other job opportunities.
What Placer County has done with inmate food service they can do elsewhere. In early 2016, the county issued a request for proposals to evaluate other service delivery options. By making judicious use of the option to outsource public services to private contractors, public agencies can realize significant direct savings. But merely the deterrence value of the outsourcing option can be valuable for a public agency. When public employee unions know that their employers have the option of turning to a private contractor, they will be more reasonable in their negotiations.
Charter of the County of Placer
Article III General Powers, Sec. 302 Duties, Part (h) Contracting for Services:
“The Board may contract with an independent contractor to provide any services required of, or performed by, the county if it is more economical to do so.”
Press Release – Placer County
“Placer opts to shift inmate food service to private contractor”
Meeting Agenda – Placer County Board of Supervisors
Agenda for March 7th, 2017 Board Meeting including resolution to privatize correctional food services
Memorandum – Placer County Board of Supervisors
Cost analysis of privatizing correctional food services – March 7th
California is not just any “blue state.” By many measures, California is a blue nation. It boasts the world’s sixth largest economy, isolated from the rest of the nation by mountains and deserts that were virtually impassable before modern times. It is blessed with diverse industries, abundant natural resources, and the most attractive weather in North America. California is nearly a nation unto itself.
And it is an occupied nation. California is ruled by a coalition of monopolistic businesses, public sector unions, and the environmentalist lobby. These Occupiers control a Democratic super-majority in the state legislature, as well as nearly all of California’s major cities, counties and school boards. To enrich and empower themselves, the Occupiers have oppressed California’s dwindling middle class and small business sectors, and condemned millions more to poverty and dependence.
For the average working family, no state in America is harder to live in than California. It has the highest cost-of-living, the highest taxes, the most onerous regulations, one of the worst systems of public education, congested freeways and failing infrastructure. It will take heroic efforts to turn this around. And heroic efforts require heroes.
In the face of this overwhelming power, this alliance of oligarchs and government bureaucrats that has conned voters into embracing their servitude, where do you begin? What steps can you take? How do you rescue education, cut taxes, encourage new homes and new infrastructure, and save small businesses from crippling regulations?
As it turns out, a lot has been done in select locales, where heroes stepped up and successfully fought for reforms. And if those reforms could be replicated in other cities and counties, things would begin to change. To borrow a quote from Winston Churchill, if small local reforms began to spread across this great state, it would “not be the beginning of the end, but it would be the end of the beginning.” Here are some examples:
(1) Turning failing schools into charter schools:
As recently reported by CPC general counsel Craig Alexander, in 2015 parents at the Palm Lane Elementary School of the Anaheim City School District turned in far more signatures than needed under the Parent Trigger Law. The goal of the law and the parents at Palm Lane was to convert a public school that had failed their children for over a decade into a charter school. But the district, as a pretext to denying the Parent’s Petitions, improperly disallowed many signatures. It took a few years for parent volunteers and pro-bono attorneys, all of them heroically volunteering their time, to fight in court. But on Friday, April 28, 2017, the Court of Appeals issued a 34-page opinion that upheld in full the trial court’s ruling in favor of the parents and against the Anaheim Elementary School District. The Appeals Court found the trial court’s initial ruling, including the court’s findings of the bad faith tactics of the district, was correct in all aspects. Palm Lane Elementary school will start the 2017-2018 school year as a charter school.
(2) Stopping secret negotiations between cities and counties and public sector unions:
It wasn’t easy, but a few years ago, heroic progress was made. Orange County, Costa Mesa, and Fullerton all adopted so called “COIN” ordinances. COIN stands for “civic openness in negotiations.” This prevented elected officials from approving sweetheart deals with the government unions whose campaign contributions got them elected, all behind closed doors with minimal opportunities for public review. And to explain what happened next, one may borrow a quote from Tolkien: “Sauron’s [the Occupiers] wrath will be terrible, his retribution swift.” California’s union-controlled legislature passed a law they termed “CRONEY” (Civic Reporting Openness in Negotiations Efficiency Act), which mandates government agencies with COIN ordinances make public all negotiations with private vendors involving contracts over $250,000. There’s no comparison, of course. Private vendors disclose proprietary cost information in negotiations, and public entities are already required to take multiple bids in a competitive process. By contrast, public sector compensation, benefits and work rules are by definition not proprietary, they are public. And public sector unions, regrettably, have no competitors.
(3) Reforming financially unsustainable pension benefits:
If someone told you that they were going to invest their money, but if that money didn’t earn enough interest, they were going to take your money to make up the difference, would you think that was fair? Of course not. But that’s how a couple of million unionized public sector workers are treating the rest of us. California’s annual pension costs have risen from 3% of all state and local government revenue (i.e., “taxes”) to nearly 10% today, and there is no end in sight. But heroes are out there. In June 2012 voters in San Diego and San Jose passed pension reform initiatives. In both cases, to borrow some Star Wars terminology, “The Empire [The Occupiers] Strikes Back.” After relentless attacks in court, San Diego’s reforms were left largely intact, and San Jose’s were severely undermined, although some important provisions were preserved.
The people who fought for these reforms are too numerous to mention. They are all heroes. Some of them, like San Jose mayor Chuck Reed, San Diego councilmember Carl DeMaio, Costa Mesa mayor Jim Righeimer, and California state senator Gloria Romero, were elected officials whose courage has earned them the permanent enmity of the Occupiers. Other heroes, far more numerous, were the citizens, parents, and activists who dedicated countless hours to these causes.
Turning California back into a place where ordinary citizens can afford homes and get quality public education is not going to be easy. But there is no chance unless heroic individuals band together and fight the Occupiers, one issue at a time, one city at a time, one school district at a time.
Over the next several months, the California Policy Center intends to find more examples of heroic local reforms. It is our intention to not only compile these stories, but for each of them, distill them to the essential steps that were taken, so that these winning formulas can serve as an example to others.
We are in search of heroes. Contact us. Tell us your story.
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Ed Ring can be reached at email@example.com.