Shasta Voices study on privatization recommends more should be done

In a 23-page report, released to the media on Monday, Aug. 24, Shasta Voices’ Executive Director Mary Machado urged city and county leaders to prepare themselves for more privatization of public services.

“The pressure to privatize government services is increasing,” Machado’s study concludes. “Governments need to be prepared for this movement and take steps to deal with it as it approaches . . . instead of allowing it to be forced upon them by outside pressures.”

The study was jointly funded by the Greater Redding Chamber of Commerce, the Shasta Association of Realtors and the Shasta Builders Exchange.

Governments that properly manage the privatization process and carefully monitor the implemented projects can better hold spending in check while still achieving high quality results, Machado found, citing as an example the City of Rancho Cordova (population 65,000) located just outside of Sacramento that contracted out is fire, garbage, public transportation, utilities and library services, among others, when hit with a 19 percent drop in sales and property tax revenue in 2008.

“Comprehensive privatization programs offer city and county governments a way to maximize revenue, cut costs, have greater flexibility in solving each problem, and make greater use of private capital for public services and facilities,” Machado’s study states.

During a period of nearly four months, Machado and her research team interviewed top elected officials and appointed administrators with the City of Redding as well as Shasta County to reach its conclusions, published Aug. 10, 2009, as a research project titled “Privatization of Public Services: Taking a look at the pros and cons of privatizing Public Agency Services in the Shasta County area.”

“This inclusive study defines the various types of privatization, explains how the process works, and addresses the pros and cons of privatizing public services locally through the words of our city and county managers and elected officials, the public employee union leaders, and the business and community at large,” Machado writes in the August (Volume III, Issue III) of The Voice, a newsletter published each month by the organization.

“One thing you learn quickly when involved in the research and information gathering process is that there is no shortage of information to gather,” Machado wrote in the July (Volume III, Issue II) edition of The Voice.

“Just to give you a taste of what we’ve learned, the City of Redding, for instance, has awarded private contracts on city projects from just about every department that total $202,794,424.08 since January 1, 2004,” the same edition states.

Those contracts included such services as street maintenance and repair, airport improvements, recreational facility operations as well as water and wastewater operational services.

And that number, as large as it is, does not include such things as janitorial services, landscape maintenance and animal control that Redding contracts for on a regular basis, the newsletter also noted.

During interviews with Shasta County Administrative Officer Larry Lees, Machado notes that Shasta County currently oversees more than 1,000 private contracts for services each year in virtually every area of county government. For example, during the final two months of June, the county’s board of supervisors approved private contracts totaling nearly $19.7 million.

The largest single contract -- $5,014,637 -- was with the California Department of Forestry and Fire Protection (CAL-Fire) to administer and operate the Shasta County Fire Department. In close second place, the county spent $4,215,132 with attorney Jeffrey L. Jens to provide conflict indigent defense services. In third place was a $3,794,801 contract with Lakmann Construction, Inc., to refurbish the District Attorney’s offices.

However, since 80 percent of all services provided by the county are mandated by either state or federal funding streams, the county has little control in obtaining those funds during a period of recession such as now.

“We won’t spend money that we don’t have,” Machado quotes Lees in the report.

Lees also offered examples of privatization efforts that were tried in the past but failed to control costs or improve services.

The public defender’s office was privatized at one time, with outside attorneys hired to provide legal counsel for those charged with crimes but who couldn’t afford their own attorney, Lees told Machado.

Although the county initially believed that such a program would save money, the opposite happened when there was little or no incentive for attorneys to control their fees and expenses. Also, the constant revolving door of attorneys representing clients proved inefficient, resulted in additional attorneys being hired, increased costs, the quality of services provided declined and judges had to more frequently schedule retrials, Lees said.

When asked what opportunities Shasta County has for increasing privatization in the months or years ahead, Lees suggested that a single animal shelter for all of Shasta County would be a worthwhile goal as currently Haven Humane Society contracts with the City of Redding while the county operates its own animal shelter on Breslauer Way.

“There isn’t a ‘reason in the world,’ according to Larry Lees, why the shelters cannot be combined into one,” Machado states in her report.

Les Baugh, the county’s District 5 supervisor representing Anderson, is quoted in the report as being in favorable at looking at further privatization projects without holding on to any sacred cows.

“What we are doing is a good thing . . . (but) you cannot privatize everything,” Baugh told Machado.

Shasta County Board of Supervisors chair Glenn Hawes, a long-time South County farmer and rancher, told Machado that even though the county already contracts for a huge amount of public works business, contracting for additional services would provide the county with “way more bang for the buck.”

However, ethics still must play a critical role in what the county allows outside of its direct control. He is particularly concerned about greed, and wants a good bidding process that includes some requirements for ethics.

“These days, we must think outside the box,” Hawes told Machado.

Shasta Voices, also known as Citizens for a Sustainable Future, has 805 members according to its Web site. It’s governing board of directors includes Trish Clarke and Ron Largent, both of Anderson, Maureen Gaynor, Steve Gaines, Ryan Denham and Jerry Wagar.

Individuals pay dues of $150 per year to the organization while businesses and associations pay between $250 to $2,500, depending upon the number of employees or association members.