MOORLACH UPDATE — Missed Outsourcing — July 24. 2014

Although I am currently winding down my public career, it would have been fun to run one more substantive ballot measure campaign to provide better governance for the County of Orange. Participating in the successful Measure J campaign in 2008 was a fun experience (see MOORLACH UPDATE — Clerk-Recorder — October 15, 2013). Having a ballot measure that permitted outsourcing would have been a wonderful leadership opportunity. After all, this is Orange County, where the voters have a good grasp of prudent fiscal policies. The OC Register provides its observations in an editorial, which is the first piece below.

The OC Register also printed a rare correction in the second piece below, for erroneously not attributing a quote to me (I’m sure Joel Zlotnick, an employee for OCTA, would not want to have a positive reference to outsourcing attributed to him – I write with a smirk). I thought the correction should have been about the understatement of the amount of savings that would be available from outsourcing (see MOORLACH UPDATE — Questioning Outsourcing — July 23, 2014). Oh, well.

Editorial: A missed opportunity to save money

O.C. Board of Supervisors opts not to ask voters to OK more contracting of services.

A proposal by Orange County Supervisor John Moorlach that would have amended the county charter to allow more opportunities for contracting out county services won’t be making it on the November ballot after three supervisors abstained from voting on the issue.

Supervisor Todd Spitzer, the only abstaining supervisor to speak up during discussion, said that while he found the topic “exciting,” putting it forward on the last day to qualify for the ballot didn’t allow enough time to vet the measure.

While perhaps that is true, as even Supervisor Shawn Nelson, while giving a courtesy second to Mr. Moorlach’s motion, didn’t seem to think the proposal had legs. The topic should certainly be revisited by future boards.

As unfunded pension liabilities surpass the $5 billion mark, any proposal that could potentially save money on that front is worthy of detailed discussion, and Mr. Moorlach’s proposal would have likely done that.

It’s simple: By allowing the county to reduce government employees through contracting out nonessential services or by hiring contract employees, there would be fewer people eventually collecting on those far-above-private-sector level benefits.

However, contracting services isn’t without its issues, as well, and has led to complaints of cronyism and so-called “evergreen” contracts that give one company the sole rights to provide certain services for decades.

Those arguments are certainly valid, and no monopolies on services are acceptable, although a private monopoly is likely preferable to a public one because the private monopoly, at least, is susceptible to the forces of competition. But a private monopoly created and perpetuated by the power of government, as almost all are, presents the worst of both worlds. That sort of contracting must be avoided at all costs.

The best way to avoid the pitfalls of contracting, while still maintaining cost savings that only the market provides, would simply be to privatize county functions that are unnecessary for providing the core functions of government.

As municipal governments across the country continue to creep more and more into areas that are outside their proper purview, giving rise to ballooning budgets and overstretched pension liabilities, the necessity of reining in those governmental excesses is becoming all the more obvious. The county of Orange is no exception.

Short of that solution, which is likely a long way off when even the topic of managed outsourcing of some services is met with calls of moderation, Mr. Moorlach’s plan would have been a worthy start. Far more remains to be done to return government to its rightful parameters, however, and the topic of privatization must be addressed by the board in the future.

CORRECTION

Orange County Supervisor John ‍Moorlach described outsourcing as an excellent way for the county and unions to reduce costs. Due to a reporting error, ‍Moorlach‍’‍s statement was mistakenly attributed to Joel Zlotnick, spokesman for the Orange County Transportation Authority. The statement appeared in a story on Page 1of the Local section in the July 23 edition of the Register.

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