L.A. debates privatization, again
BUDGET: Some officials see outsourcing services as way to shore up city finances.
Posted: 08/07/2011 10:31:26 PM PDT
It started nearly three years ago as an idea to generate more revenue for Los Angeles' coffers: Lease the city's largest public parking garages to private operators, with a large cash payment upfront.
But the privatization plan ran into political obstacles, with City Council members wanting caps on parking rates, reserved parking spaces and so many other provisions that garage operators were dissuaded from participating.
Despite that failed effort, Los Angeles officials are debating whether to contract with outsiders to provide other basic services - everything from libraries and parks to the zoo and animal care - as a way to shore up the city's sagging finances.
"My experience has been that anything which should be a money-making operation does not do well under the city," said Councilman Bernard Parks, who chairs the council's Budget and Finance Committee. "We are better off having it done privately."
However, Councilman Richard Alarcón has said he is opposed to the proposals that would shift control of operations away from the city.
"The question I have is if they can operate it, why can't we," Alarcón said. "We have made major investments in facilities ... and I don't see how it is different from what our employees are able to do. This is a debate we need to have and not leave to future politicians to decide."
The City Council is now exploring whether a public-private partnership would transform the Los Angeles Zoo into a more profitable operation or whether a nonprofit organization could do a better job of running a municipal animal shelter.
There also are discussions about contracting with private firms to operate the Convention Center and to handle ambulance billing.
Leonard Gilroy, director of government reform for the Reason Foundation, a libertarian think tank, said the city is looking at something his organization has long suggested.
"When you look at the basic functions of government, the question is how you allocate scarce resources," he said. "One of the strategies that makes sense is to look for partnerships for noncore functions, whether it is a zoo or a park or a convention center.
"These are all assets that are nice to have, but they reach a point where the city has to ask if it can afford them. Actually, Los Angeles is catching up with what a lot of other cities have had to do."
In crafting his budgets for the last two years, Mayor Antonio Villaraigosa has tried to streamline public agencies to reduce expenses during tough financial times.
He now is looking to outside entities to help fill the gaps in what the city is able to provide.
"The mayor believes public-private partnerships should be explored when and where they make sense to preserve or enhance services," Villaraigosa spokeswoman Sarah Sheahan said.
"But we need to look carefully at each issue on a case-by-case basis. As city governments across the country are grappling with budget cuts, mayors and city councils are thinking creatively to protect and improve services."
Bob Stern, executive director of the Center for Governmental Studies, said there are a number of issues to consider, including potential conflicts of interest with private firms or nonprofit organizations.
"Privatizing also means you could lose the ability to regulate these agencies," he said. "I am very concerned when it comes to privatizing some of the big things the city does. Could this lead to privatizing the police or fire services? It's a debate over what tax dollars should be used for."
City officials are exploring a partnership with the nonprofit Best Friends Animal Society as a way to staff the Northeast Valley shelter in Mission Hills. Because of personnel shortages, the $19.5 million facility is being used to house severely abused pets or animals involved in criminal cases, but has never been open to the public.
City Administrative Officer Miguel Santana said that a partnership with a nonprofit like Best Friends would allow the city to provide services with no additional cost to taxpayers.
"The council has made it clear we are to avoid layoffs at all costs," Santana said. "We are mandated to a commitment that we have to find other ways to provide services.
"This (shelter) was a perfect example of partnering with a nonprofit to provide the services the public is demanding."
Parks said Animal Services was originally established to provide animal control, but has since expanded to education and pet sterilization - services that the city needs outside help to provide.
"My district is supposed to get a new animal shelter next year," Parks said. "We already have arrangements with a nonprofit to run it, and it makes sense.
"We can't afford to staff it, so the city builds the shelter and brings in someone to provide the service to the public."
Alarcón, however, remains reluctant to surrender city assets to outsiders.
"What concerns me is we are making a massive investment with our animal shelters, and we are just turning them over to somebody who gets a building with free rent and will be providing less in the way of services," Alarcón said.
Partnering with a nonprofit is also being considered at the Los Angeles Zoo - one of the few remaining in the nation that is publicly owned and financed, with assistance from the Greater Los Angeles Zoo Association.
The city is working to develop a request for proposals that would provide parameters for private operators interested in bidding to manage the zoo. A hearing on the issue is scheduled for Wednesday by the Arts, Parks, Health and Aging Committee.
"When people go to the zoo, they don't really think about who owns or operates it," Santana said. "They want to see the animals in a clean and safety environment."
Richard Lichtenstein, who represents GLAZA as the ex-officio member of the Zoo Commission, said a discussion needs to take place - regardless of whether the city ultimately decides to bring in a private operator.
"It ought to come out in a conversation with all the stakeholders in deciding whether to make change in the institution," Lichtenstein said. "At the end of the day, the conversation has to be what is needed to make sure the zoo is self-sustaining.
"For the city, it should be having an overall discussion of what it wants to do with the zoo, with animal shelters, with all of its services," Lichtenstein said.
"But, it also needs to have an incremental discussion on each piece of their policy to determine what it considers a core service and what it believes can be better handled in other ways."
The Coalition of City Unions is fighting the zoo proposal because of concerns that it will result in layoffs of municipal workers.
"Privatizing the zoo has little to do with money," the group said in a letter. "Rather, it is part of a motivated agenda by CAO Santana to outsource city services to lower wages and eliminate health care and retirement benefits."
Animal shelter partnership Zoo proposal Stadium privatization
Perhaps the biggest privatization issue facing the city comes from Anschutz Entertainment Group, the Denver-based developer that built Staples Center and LA Live and now wants to erect a $1.2 billion NFL stadium downtown.
Its plan includes razing the West Hall of the publicly owned Convention Center and rebuilding it on a different site. AEG has asked the city to issue some $275 million in bonds to help finance the project, with promises to repay the debt in full.
AEG officials maintain an enlarged and updated Convention Center would make Los Angeles more attractive to major industries and groups looking for meeting destinations.
Gregg Caren, a senior vice president at SMG Worldwide, which operates the Long Beach Convention Center and several other publicly owned venues, said it would be interested in adding an upgraded Los Angeles center to its portfolio.
"We would certainly be interested in applying for it," Caren said. "For us, it would be like adding a major city for a hotel chain. Having the L.A. Convention Center would be a boon for us."
AEG Spokesman Michael Roth said there has been no discussion with SMG about taking over the convention business.
"But, it is not something we are unfamiliar with," Roth said. "That is something to discuss in the future."
But the privatization plan ran into political obstacles, with City Council members wanting caps on parking rates, reserved parking spaces and so many other provisions that garage operators were dissuaded from participating.
Despite that failed effort, Los Angeles officials are debating whether to contract with outsiders to provide other basic services - everything from libraries and parks to the zoo and animal care - as a way to shore up the city's sagging finances.
"My experience has been that anything which should be a money-making operation does not do well under the city," said Councilman Bernard Parks, who chairs the council's Budget and Finance Committee. "We are better off having it done privately."
However, Councilman Richard Alarcón has said he is opposed to the proposals that would shift control of operations away from the city.
"The question I have is if they can operate it, why can't we," Alarcón said. "We have made major investments in facilities ... and I don't see how it is different from what our employees are able to do. This is a debate we need to have and not leave to future politicians to decide."
The City Council is now exploring whether a public-private partnership would transform the Los Angeles Zoo into a more profitable operation or whether a nonprofit organization could do a better job of running a municipal animal shelter.
There also are discussions about contracting with private firms to operate the Convention Center and to handle ambulance billing.
Leonard Gilroy, director of government reform for the Reason Foundation, a libertarian think tank, said the city is looking at something his organization has long suggested.
"When you look at the basic functions of government, the question is how you allocate scarce resources," he said. "One of the strategies that makes sense is to look for partnerships for noncore functions, whether it is a zoo or a park or a convention center.
"These are all assets that are nice to have, but they reach a point where the city has to ask if it can afford them. Actually, Los Angeles is catching up with what a lot of other cities have had to do."
In crafting his budgets for the last two years, Mayor Antonio Villaraigosa has tried to streamline public agencies to reduce expenses during tough financial times.
He now is looking to outside entities to help fill the gaps in what the city is able to provide.
"The mayor believes public-private partnerships should be explored when and where they make sense to preserve or enhance services," Villaraigosa spokeswoman Sarah Sheahan said.
"But we need to look carefully at each issue on a case-by-case basis. As city governments across the country are grappling with budget cuts, mayors and city councils are thinking creatively to protect and improve services."
Bob Stern, executive director of the Center for Governmental Studies, said there are a number of issues to consider, including potential conflicts of interest with private firms or nonprofit organizations.
"Privatizing also means you could lose the ability to regulate these agencies," he said. "I am very concerned when it comes to privatizing some of the big things the city does. Could this lead to privatizing the police or fire services? It's a debate over what tax dollars should be used for."
City officials are exploring a partnership with the nonprofit Best Friends Animal Society as a way to staff the Northeast Valley shelter in Mission Hills. Because of personnel shortages, the $19.5 million facility is being used to house severely abused pets or animals involved in criminal cases, but has never been open to the public.
City Administrative Officer Miguel Santana said that a partnership with a nonprofit like Best Friends would allow the city to provide services with no additional cost to taxpayers.
"The council has made it clear we are to avoid layoffs at all costs," Santana said. "We are mandated to a commitment that we have to find other ways to provide services.
"This (shelter) was a perfect example of partnering with a nonprofit to provide the services the public is demanding."
Parks said Animal Services was originally established to provide animal control, but has since expanded to education and pet sterilization - services that the city needs outside help to provide.
"My district is supposed to get a new animal shelter next year," Parks said. "We already have arrangements with a nonprofit to run it, and it makes sense.
"We can't afford to staff it, so the city builds the shelter and brings in someone to provide the service to the public."
Alarcón, however, remains reluctant to surrender city assets to outsiders.
"What concerns me is we are making a massive investment with our animal shelters, and we are just turning them over to somebody who gets a building with free rent and will be providing less in the way of services," Alarcón said.
Partnering with a nonprofit is also being considered at the Los Angeles Zoo - one of the few remaining in the nation that is publicly owned and financed, with assistance from the Greater Los Angeles Zoo Association.
The city is working to develop a request for proposals that would provide parameters for private operators interested in bidding to manage the zoo. A hearing on the issue is scheduled for Wednesday by the Arts, Parks, Health and Aging Committee.
"When people go to the zoo, they don't really think about who owns or operates it," Santana said. "They want to see the animals in a clean and safety environment."
Richard Lichtenstein, who represents GLAZA as the ex-officio member of the Zoo Commission, said a discussion needs to take place - regardless of whether the city ultimately decides to bring in a private operator.
"It ought to come out in a conversation with all the stakeholders in deciding whether to make change in the institution," Lichtenstein said. "At the end of the day, the conversation has to be what is needed to make sure the zoo is self-sustaining.
"For the city, it should be having an overall discussion of what it wants to do with the zoo, with animal shelters, with all of its services," Lichtenstein said.
"But, it also needs to have an incremental discussion on each piece of their policy to determine what it considers a core service and what it believes can be better handled in other ways."
The Coalition of City Unions is fighting the zoo proposal because of concerns that it will result in layoffs of municipal workers.
"Privatizing the zoo has little to do with money," the group said in a letter. "Rather, it is part of a motivated agenda by CAO Santana to outsource city services to lower wages and eliminate health care and retirement benefits."
Animal shelter partnership Zoo proposal Stadium privatization
Perhaps the biggest privatization issue facing the city comes from Anschutz Entertainment Group, the Denver-based developer that built Staples Center and LA Live and now wants to erect a $1.2 billion NFL stadium downtown.
Its plan includes razing the West Hall of the publicly owned Convention Center and rebuilding it on a different site. AEG has asked the city to issue some $275 million in bonds to help finance the project, with promises to repay the debt in full.
AEG officials maintain an enlarged and updated Convention Center would make Los Angeles more attractive to major industries and groups looking for meeting destinations.
Gregg Caren, a senior vice president at SMG Worldwide, which operates the Long Beach Convention Center and several other publicly owned venues, said it would be interested in adding an upgraded Los Angeles center to its portfolio.
"We would certainly be interested in applying for it," Caren said. "For us, it would be like adding a major city for a hotel chain. Having the L.A. Convention Center would be a boon for us."
AEG Spokesman Michael Roth said there has been no discussion with SMG about taking over the convention business.
"But, it is not something we are unfamiliar with," Roth said. "That is something to discuss in the future."
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