“Public, Private Sector Wage Gap Heavily Favors Many LA Workers,” a front page article in Sunday’s Los Angeles Times, marks the beginning of the conversation involving the efficiency of the City’s operations and whether the City should “outsource” a portion of its operations, including the repair and maintenance of our deteriorating streets and broken sidewalks.

In their 1,300 word article, Peter Jamison and Catherine Saillant detailed how many city workers earn considerably more than their private sector counterparts, with premiums ranging from 40% to over 100%.

City workers are also entitled to very hefty benefits that far exceed those in the private sector, including a Cadillac healthcare plan, a generous defined benefit pension plan, ample vacation time, 13 paid holidays, and 12 sick days at full pay.   

The City’s operations also appear to be poorly managed, hindered by the lack of management information systems as was detailed in Controller Ron Galperin’s audit of the Bureau of Street Services.  As a result, the Bureau does not have a very good grasp of its performance metrics and overall operation.

Galperin also revealed that the Bureau has very low direct labor utilization rates (57%) which results in the overstaffing of its work crews.

The City’s cost structure is also burdened by a bloated, paper pushing bureaucracy which results in excessive department overheads.  This is compounded by unsupported allocations for centralized services and City Hall administrative expenses that are needed, in part, to handle the disruptive interference from members of the City Council, their staffs, and their favor seeking cronies.

Our cash strapped City can no longer support these inefficient operations that are crowding out the City’s ability to provide basic core services such as the repair and maintenance of streets and sidewalks and the enforcement of traffic laws, planning and zoning rules, building and safety regulations, and local zoning ordinances, all of which impact our quality of life.

As a first step, the City needs to determine the efficiency of its departments by benchmarking their operations against other governmental entities and private enterprise. While this may be a novel experience for the City, it is standard operating procedure in the private sector.

The City should also implement a policy of “managed competition” where the City contracts with private contractors for a portion of the work and compares the results with those of City work crews.

The Department of Water and Power had such a policy to replace selected water mains.  This resulted in a DWP construction work crew incurring 100% cost overruns while at the same time blowing its deadlines.  The private contractors were, for the most part, on time and on budget.

The City should also consider implementing performance based evaluations of its employees while lessening the importance of seniority.  This would provide the City with considerably more operational flexibility to lower its costs and deliver a finished product on time and on budget.

Together, these three reforms, benchmarking, managed competition, and performance based personnel evaluations, would result in significant savings, freeing up to $200 million (less than 10% of the civilian personnel costs) that would be devoted to eliminating the Structural Deficit, repairing and maintaining our streets and sidewalks, and restoring vital city services that are essential to our quality of life.

Unfortunately, the Herb Wesson led City Council will reject these reforms because it does not have the courage to stand up to the campaign funding City unions.  Its solution is to continue to play games with the budget by raiding the Reserve Fund and deferring needed expenditures.  At the same time, they are concocting a plan to persuade the City’s skeptical voters to approve a massive increase in our taxes.

But this rope-a-dope strategy of prioritizing their own personal political goals at our expense is not going to fly as the voters will demand work place and budget reform.  Maybe it is time that City Hall took the advice of former New York Governor Mario Cuomo:

“It is not government’s obligation to provide services, but to see that they are provided.”

Cross-posted at City Watch LA.