Slow Road Is Best for Privatizing EMA : County Agency Already Contracts Out Many Services

One of the arguments used by opponents of the proposed half-cent increase in the Orange County’s sales tax, which was trounced at the polls June 27, was that there has been too little effort to sell county assets and privatize its operations.

Privatizing and selling off county buildings and land has been a favorite theme since the county declared bankruptcy last December. In fact, county officials have tried driving down those roads; while some hold promise, others are found to have potholes. For example, an auction of county land a week and a half ago brought in far less money than expected. Another example comes from the discussion of the future of the Environmental Management Agency, which shows how difficult privatization can be.

EMA has more than 1,000 employees who handle a host of jobs from operating low-cost housing programs to running county parks and harbors. One of its most important responsibilities is planning how land in the county will be used.

Given the size of the agency and the multitude of its tasks, it should have been clear from the start that turning more of EMA over to private companies would be a long process if it happened at all. Several weeks ago, before the sales tax vote, the Board of Supervisors saw the light, and agreed with an advisory panel that recommended that the county take a longer look before leaping ahead with the sale of this agency. There is no need for haste.

More than 100 people were interested enough in taking over some of EMA’s business to attend an initial meeting; but in the end, there were only four serious bids. And even those four were tentative and hedged with caveats. Even the Reason Foundation, a think tank which advocates privatization, said EMA was one of the county departments most receptive already to having outside firms perform work under contract. Other outsiders agree the agency has little, if any, fat to cut.

The agency was founded 20 years ago to streamline land-use decisions. Aided by good management, EMA tried over the years to be helpful to builders, developers and other private citizens. Justifiably worried about the slump in county building activity three years ago, the Board of Supervisors ordered cuts in the agency’s staff and a bidding procedure to save money.

Agency officials said the annual budget has been cut from $860 million to $745 million since 1992, staff cut from 1,600 to 1,279 and nearly 70% of its functions turned over to private-sector contractors. That is an impressive record and shows that county officials were intent on economizing even before the bankruptcy. It is also worth noting that the agency receives most of its funds from state and federal money and fees for service, not from the county’s general fund.

As they consider what to do with EMA, the supervisors should also think about another topic of discussion among members of the privatization committee that recommended going slow on EMA: lobbyists.

Unfortunately, the committee ducked the issue of lobbying, despite the wishes of some members to include it in the report to the supervisors. The supervisors need to reduce the role of lobbyists, especially if they eventually privatize more of EMA. In that case, just about every firm wanting a piece of the action could be expected to hire a lobbyist trying to get the ear of at least one supervisor.

There is no reason when it comes to awarding contracts why the supervisors can’t take the recommendation of county staff, whose job it is to interview applicants and decide which is best.