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AGENDA STAFF REPORT ,
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DATE: April 14, 2014
TO: Honorable Mayor and City Council
FROM: Jill R. Ingram, City Manager and
Quinn M. Barrow, City Attorney
SUBJECT: LETTER OPPOSING HOUSE RESOLUTION NO. 29
REGARDING OUTSOURCING OF PUBLIC SERVICES
SUMMARY OF REQUEST:
That the City Council authorize the Mayor to sign a letter opposing HR 29.
BACKGROUND AND DISCUSSION:
California Assembly Member Gomez has introduced "House Resolution No. 29 —
Relative to Outsourcing Public Services." The proposed resolution resolves,
"The Assembly opposes outsourcing of public services and assets..." and "the
Assembly intends to introduce and advocate for responsible outsourcing
legislation."
On April 3, 2014, the Assembly adopted the resolution by the following vote: 42
Ayes, 22 Noes, with 15 members not voting.
While not binding legislation, the resolution can be viewed as a pledge that the
State Legislature will adopt legislation prohibiting public agencies from
"outsourcing" services. Such potential legislation would be a further example of
usurpation of local control by the Legislature and will undoubtedly degrade the
quality of life in Seal Beach. Such legislation could adversely impact the City's
ability to provide services to the public in the most cost-effective manner.
Primarily as a cost-cutting measure, Seal Beach contracts with a number of
outside sources for services. The Orange County Fire Authority provides fire
fighting services. The City of Long Beach provides animal control services.
West Cities Police Communications (Westcom) provides police dispatch
services. Traw Associates Consulting provides building official services. The
City has also contracted with a number of firms providing professional services.
Seal Beach's recreation program contracts with over 55 instructors and teachers
to provide the community with more than 450 classes each year in programs
such as First Aid, SAT prep, Healthy Cooking, our Junior Lifeguard Program,
dozens of sports, preschool, youth, fitness, and adult programs, and many more.
There is no feasible or economically prudent way to provide such services with
City staff.
Agenda Item G
The League of California Cities and other municipal groups are opposed to the
Resolution and have urged cities to send letters in opposition. The City
Attorney's firm of Richards, Watson & Gershon also submitted a letter of
opposition.
ENVIRONMENTAL IMPACT:
There is no environmental impact related to this item.
LEGAL ANALYSIS
They City Attorney has approved as to form.
FINANCIAL IMPACT:
There is no environmental impact related to this item.
RECOMMENDATION:
That the City Council authorize the Mayor to sign a letter opposing HR 29.
Attachments:
A. HR 29
B. Draft opposition letter
C. March 28, 2014 letter opposing HR 29 from Richards, Watson & Gershon
Page 2
Attachment "A"
CALIFORNIA LEGISLATURE-2013-14 REGULAR SESSION
House Resolution No. 29
Introduced by Assembly Member Gomez
February 4, 2014
House Resolution No. 29—Relative to outsourcing public services.
1 WHEREAS,Public services and assets are the fabric that binds
2 our communities together. They are also a ladder to the middle
3 class; and
4 WHEREAS, Faced with severe budget problems in the wake
5 of the Great Recession,state and local governments across America
6 are handing over control of public services and assets to
7 corporations that promise to operate them better, faster, and
8 cheaper; and
9 WHEREAS, Outsourcing these services and assets often fails
10 to keep these promises, and too often it undermines transparency,
11 accountability, and shared prosperity and competition - the
12 underpinnings of democracy itself; and
13 WHEREAS, Outsourcing means that taxpayers have less say
14 over how future tax dollars are spent and have no ability to vote
15 out executives who make decisions that could harm the public
16 interest; and
17 WHEREAS, Outsourcing means taxpayers are often
18 contractually limited to a single for-profit corporation; and
19 WHEREAS, Outsourcing frequently means that wages and
20 benefits for public service workers fall and the local economy
21 suffers while corporate profits rise. The American Federation of
22 State, County and Municipal Employees (AFSCME) has found
23 that of the 5.4 million people working for federal service
24 contractors in 2008, an estimated 80 percent earned below the
99
HR 29 —2-
1 living wage for their city or region. For-profit corporations are
2 three times more likely than the public sector to employ workers
3 at poverty-threshold wages; and two million private sector
4 employees working for federal contractors earn less than $12 an
5 hour-too little to support a family.That is more low wage workers
6 than are employed by McDonald's and Wa1Mart combined; and
7 WHEREAS, Outsourcing means that taxpayers often no longer
8 know how their tax dollars are being spent. Meetings and records
9 that used to be open to the public can become proprietary
10 information when corporations take over; and
11 WHEREAS,The Taxpayer Empowerment Agenda is one model
12 that may help ensure transparency, accountability, shared
13 prosperity,and competition in the operation of public services and
14 assets; and
15 WHEREAS, Planks in the Taxpayer Empowerment Agenda
16 would require governments to post information about their
17 contracts online and require contractors to open their books to the
18 public, ensure that governments have the capacity to adequately
19 oversee contracts, to cancel contracts that fail to deliver on their
20 promises, prohibit law breaking companies from getting
21 government contracts, require contractors to pay their employees
22 living wages and benefits,require competitive bidding on contracts
23 that guarantee company profits at the expense of taxpayers, and
24 give public service works the opportunity to develop their own
25 plan on how to deliver cost-effective, high-quality services; and
26 WHEREAS, Recent polling shows that taxpayers oppose the
27 outsourcing of public services and assets to for-profit companies
28 and support these common sense controls to ensure that their
29 interests are protected; now, therefore, be it
30 Resolved by the Assembly of the State of California, That the
31 Assembly opposes outsourcing of public services and assets,which
32 harms transparency, accountability, shared prosperity, and
33 competition,and supports processes that give public service works
34 the opportunity to develop their own plan on how to deliver
35 cost-effective, high-quality services; and be it further
36 Resolved, That the Assembly urges local officials to become
37 familiar with the provisions of the Taxpayer Empowerment
38 Agenda; and be it further
39 Resolved, That the Assembly intends to introduce and advocate
40 for responsible outsourcing legislation.
99
-3— HR 29
1 Resolved, That the Chief Clerk of the Assembly transmit copies
2 of this resolution to the author for appropriate distribution.
O
99
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CITY1 ALL 211 LIGHTH STREET
SFAL BLACI 1.CALIFORNIA 90740
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April 14, 2014
Hon. Jimmy Gomez
Member of the California State Assembly
State Capitol, Room 2176
Sacramento, California 95814
Honorable Assembly Member Gomez:
I write to you on behalf of the City of Seal Beach in opposition to House Resolution 29.
Next year, the City of Seal Beach will celebrate its Centennial and with it, our success over the
last 100 years at maintaining a small-town atmosphere and community values. Our success is
in part the result of the City's ability to provide a wide range of services to the public through the
creative and fiscally responsible decisions made at the local level. In many cases, those
decisions were to contract with outside service providers to provide services that a City of our
size simply could not provide otherwise.
Thus, the Orange County Fire Authority provides our fire fighting services. The City of Long
Beach provides our animal control services. West Cities Police Communications (Westcom)
provides our police dispatch services. Traw Associates Consulting provides our building official
services. We are also able to maintain a recreation program that provides more than 450
classes and programs each year through contracts with more than 55 instructors who lead
classes and programs in First Aid, SAT prep, Healthy Cooking, our Junior Lifeguard Program,
dozens of sports programs, and many more. It would be impossible for our City to provide such
a diverse array of high-quality services if the City were not able to contract with outside
providers.
House Resolution 29 fails to recognize our City's success and the need and desirability for cities
like ours to contract with outside service providers. Instead, HR 29 appears to make Assembly
Members pledge to adopt legislation prohibiting public agencies from "outsourcing" services.
Such potential legislation would be yet another unnecessary intrusion on local control and would
undoubtedly degrade our quality of life in Seal Beach by denying the City the ability to provide
the broadest range of public services in the most cost-effective manner.
For the reasons stated above, the City of Seal Beach respectfully opposes this resolution, and
urges legislators to preserve their flexibility to make informed decisions on specific legislation.
Sincerely,
Ellery Deaton
Mayor
S7296-0001\1702136v2.doc
Attachment "C"
1 ►Vi RICHARDS I WATSON I GERSHON
,R C! ATTORNEYS AT LAW A PROFESSIONAL CORPORATION
355 South Grand Avenue,4oth Floor,Los Angeles,California 90071-3101
Telephone 213,626.8484 Facsimile 213.626.0078
Laurence S.wiener March 28, 2014
Iwiener@rwglaw.com
VIA FACSIMILE (916) 319-2151& U.S. MAIL
Hon. Jimmy Gomez
Member of the California State Assembly
State Capitol, Room 2176
Sacramento, CA 95814
Re: Opposition to Proposed HR 29
Honorable Assembly Member Gomez:
Richards, Watson & Gershon, one of California's oldest and largest law firms
representing public entities, respectfully opposes proposed HR 29. This measure has
the potential to severely degrade local public agencies' ability to deliver services to
residents in a high quality, cost-effective manner. Further, if the pledged votes set
forth in HR 29 actually come to pass, this usurpation of local control by the
Legislature will undoubtedly degrade the quality of life in many local communities.
California's cities and other local governments are engaged in a constant struggle to.
find ways to deliver important services to the public in the face of growing need and
shrinking revenues. As life in our state becomes ever more complex, local
government must turn to the private sector to provide specialized services such as
environmental and water quality consulting, legal and accounting services, building
and housing inspections, and engineering services. The vast majority of California's
local public entities do not need full time employees to provide these types of
services, and cannot afford to do so. Indeed, in some communities, all or nearly all
local services are provided under contract. If the Legislature prohibits local agencies
from contracting out for services, Californians will suffer as local entities will have
no choice but to simply stop providing crucial services that are now performed,
efficiently and economically, by contracted personnel.
HR 29's restriction on Legislators' ability to consider the merits of future individual
legislative proposals is counter-democratic. If, in a given situation, there is a
meritorious case to be made that in every community across the State a certain service
is not appropriate to be contracted out, Legislators should look at the merits and
details of that specific legislative proposal and vote accordingly. We urge the
members of the Legislature to oppose HR 29 and preserve for themselves the
flexibility to make informed decisions on specific pieces of legislation in the future.
RICHARDS I WATSON I GERSHON
ATTORNEYS AT LAW-A PROFESSIONAL CORPORATION
Hon. Jimmy Gomez
March 28, 2014
Page 2
We join the League of California Cities and other elements of local government in
opposition to this irreparably flawed proposal.
7 V ly yo s,
Laurence P*ene President
cc: Ho mbers of the Assembly
Karon Green, Chief Consultant, Assembly Public Employees, Retirement and
Social Security; FAX: 916-319-2956
Kristine Guerrero, League of California Cities; kuerrero @cacities.org
99999-9999\1699681 v l.doc