Some of the most egregious examples of waste concern the use of public dollars to pay private contractors to perform services that public institutions could perform more efficiently and cheaper. We call these “Outsource Outrages,” and you’ll be sure to find them posted in this section of our site.
LA City Insources Golf Cart Concessions
Los Angeles’ municipal golf courses are a green getaway for golfers. Now they may be a source of a different green — cash for city operations.
A new plan to put city employees in charge of golf cart operation at five city-run courses will contribute to $1,824,133 a year in golf revenue that supports LA parks and playgrounds.
“As a recreation and parks gardener, I’m always held accountable for what happens in the parks. Outside contracting costs more in the long run,” said Andrew Ortiz, a gardener-caretaker at Rio de Los Angeles. “We need to bring it in-house.”
After a pilot project with city employees that saw revenue increase 11% this year, the City of Los Angeles proposed to end an outside contract for electric golf carts at five city-run golf courses. A report found that the contractor had underpaid rent to the city and profited from the work of city employees.
An audit of the current contractor, J.H. Kishi Company, “found that Kishi had a poor internal control environment and underreported revenue resulting in underpayment of rent to
the City. Kishi still receives 53% of the cart rental revenues, despite not having to perform a key function of the contract.”
“We should maintain our own courses, our own equipment,” said Ortiz. “The answer isn’t layoffs and furloughs, but keeping our own people and equipment in the city. We’ve been around 100 years, we’re not new at this. We know what we’re doing.”
City employees will take over the maintenance and rental of golf carts that has been operated privately for 35 years.
Santa Clarita Council’s Library Privatization Scheme Passes
On August 24, the Santa Clarita City Council voted to approve a hackneyed, poorly presented proposal to wrest control of the city’s libraries from LA County and turn them over to a Maryland corporation.
The four council members who voted to approve the deal have made some big promises to Santa Clarita’s citizenry: more library hours, more materials kept in local branches and a new library branch in Newhall.
But those and other promises are vague and not backed up by evidence or feasibility studies. Alan Ferdman of the independent Canyon Country Advisory Committee laments the city council’s rush to judgment. “They’re not telling us what they’re going to do,” Ferdman says.
Here’s what we do know: the city council will hand the libraries over to Maryland-based Library Systems & Services LLC, or LSSI. And we know that LSSI has promised the city council that it can run the city’s libraries at a significant discount. Which might also be true.
One current LSSI worker, who is on the staff of a West Coast library and who previously worked in the public library system, says LSSI keeps costs down by paying employees low wages. The librarian adds “benefits are sub-par.” The LSSI librarian laments LSSI’s low-rent approach to public services, saying it leads to a “deprofessionalization” of the library system, adding, “I wish [my colleagues] could be paid what they’re worth.”
No wonder Santa Clarita resident Elaine Braddock, who works as an LA County librarian in Valencia, says LSSI’s management threatens to erode the quality of service offered at Santa Clarita’s libraries. “Open doors do not mean service,” says Braddock. “LSSI will give you someone who knows how to search for a book. But you’re not going to get the help you need.”
You also may not get the book you need. As a part of the LA County library system, Santa Clarita residents have free access to the County’s vast collection of more than seven million titles. Last month patrons at Valencia branch alone checked out more than 13,000 items from outside their branch’s collections.
And yet none of these arguments, made by over fifty people who spoke in opposition to the plan at the August 24 meeting, swayed the council. It seems the temptation of cheap, sweatshop labor provided by a for-profit company was just too great for them.
–Lowell Goodman
Lowell Goodman is the Communications Specialist for the Center for Public Accountability
Can You Put a Price on Literacy?
Santa Clarita City Council thinks it can.
The five-member city council wants to sell library services to a for profit corporation called Library Systems & Services.
LSSI makes its money by providing the fewest services possible with the least qualified staff possible. LSSI has failed other communities, why would we want them to fail ours?
Legislators Expose Outsourcing Outrages at the Courts
$175 to empty an ashtray. $2,166 to fix five smoke detectors. $8,000 to scrape gum off four feet of sidewalk. Those are some of the maintenance charges from companies on contract with California’s court system — and all were approved by the Administrative Office of the Courts, which oversees court budgets.
Legislators exposed the inflated costs at a hearing about government accountability in Sacramento on August 11.
LA court reporter Rose Nava was there, and she said the committee took its watchdog role seriously.
“The maintenance companies have taken advantage of the rubber-stamping of the AOC,” she said. “Nobody has been watching them.”
“Hopefully now that they are being watched, we will either switch to new maintenance companies or they will stop super-inflating their costs.”
Slipshod Contracting Strikes Again: LADOT Wastes $855K
According to an audit by Controller Wendy Greuel, the City Department of Transportation (LADOT) “wasted at least $855,000 of taxpayer dollars” on GPS devices for parking enforcement vehicles. (The devices are known as Automated Vehicle Locator Systems, or AVLS.)
The details of the report are pretty scary. Some highlights:
• LADOT had the option in May 2006, to purchase the devices for $1, but inexplicably decided to continue leasing the equipment – at an additional cost of $577,584 to taxpayers over the past four years.
• LADOT has continued to pay for the monthly equipment lease and air service for 178 AVLS units which have been in storage since 2008. At a monthly cost of $7,462, this is a total of $141,773 in wasted City funds.
• LADOT lacks an adequate inventory control to properly account for AVLS equipment and cannot account for 44 units.
• When LADOT was notified that its existing AVLS air carrier was leaving the industry and that it would need to change providers, it amended its contract requesting $213,110 in new hardware and software to accommodate the change in service. Yet the contract’s warranty explicitly stated that ISR would cover these costs.
• The department’s original contract for $1.57 million has been amended seven times, which has resulted in the City spending more than $4 million to date.
This last point illustrates a severe problem with the City’s contracting policies. Often, rather than submit expiring contracts for bids, City departments simply amend and extend the original contracts, in essence extending their lives without bothering to check if someone else–including City departments–could do the work for less or more efficiently.
As Azar Nejad, an engineer with the LADOT explains, “Extending contracts without putting them out for re-bidding flies in the face of the very notion of accountability. Public sector departments should review contracts with the utmost care before renewing or extending them.”
We here at Accountable California are curious: do you know of other contracts that have been extended rather than submitted for re-bidding? Go to our tipline and tell us about them. After all, it was an anonymous tipster that led the Controller to perform her valuable audit. Let’s see what else we can discover together.
–Lowell Goodman
Lowell Goodman is the Communications Specialist for the Center for Public Accountability.