County Administrator Response to 1995-96 Grand Jury Report Entiltled: Privatization Issue in County Government

July 31, 1996

Honorable William L. Gordon, Presiding Judge
Santa Barbara County Superior Court
1100 Anacapa Street, Second Floor
Santa Barbara, California 931121-1107

County Administrator's Response to certain Findings and Recommendations in the 1995-96 Grand Jury Report on Privatization Issues

Dear Judge Gordon:

The following is the County Administrator's response to Grand Jury Foreman Spencer Boyce's June 4, 1996 letter requesting comments on specific Findings and Recommendations in the 1995-96 Interim Final Report entitled Privatization Issues in County Government.

Summary

The issue of Privatization is both timely and pertinent to the County. The Board's Strategic Plan adopted in April 1996 speaks to the concept of privatization in the Mission Statement (Attachment A) and again as part of the Organizational Value regarding Collaboration and Partnering (Attachment B). Moreover, Goal I, Action Item 2 (Attachment C) specifically directs the County Administrator to develop options regarding "policies and criteria for privatizing services including performance measures of cost effectiveness" and to report to the Board in June 1997.

The County currently privatizes many of its services. We have literally hundreds of contracts with private providers, totaling in $10's of millionsannually. Examples of such private sector contracts are listed in Attachment D.

Specific Responses

The response format restates the Grand Jury's findings and recommendations as well as our response. Additionally we have restated Recommendations 2a and 2b, and have responded to them because we think they are directly related to the Findings and Recommendations to which we are required to respond.

Finding 1: There are no broad county-wide policies and procedures for privatization. In this void some departments have developed their own guidelines.

County Administrator Response: We agree, but would point out that there are restrictions in State law that constrict what programs and services the County can privatize. In this respect, there are State guidelines.

Recommendation 1a: Policies and procedures for privatization need to be developed and adopted by the Board of Supervisors.

County Administrator Response: The Board of Supervisor's Strategic Plan for the County adopted in April 1996 directly addresses the development of policies and criteria for privatizing services (Attachment C is a copy of Goal 1 Action, Item 2.)

Recommendation 1b: The Board of Supervisors and County Administrator should organize a County Privatization Task Force. The Task Force would develop countywide short and long term policies for consideration and approval by the Board of Supervisors. The Task Force could be comprised of from five to ten department heads who have experience in privatizing services.

County Administrator Response: We agree that effective short and long term privatization policies should be developed. However, a formal Privatization Task Force comprised of up to 10 department heads is not considered necessary to the development of such policies.

Goal I, Action Item 2 (copy attached) of the Board's Strategic Plan directs the County Administrator to develop options for policies and criteria for privatizing services including performance measures by June 1997. Previous Grand Jury reports have strongly advocated that the County Administrator be given more authority and discretion in the performance of his/her responsibilities. More recently, the Board of Supervisors adopted an ordinance increasing the authority of the County Administrator. To pre-determine that a Privatization Task Force of up to 10 department heads is necessary to carry out the action item assumes the County Administrator will need such assistance in carrying out the Board's policy direction. We don't believe this is the case. The Board could always form such a Task Force at a later date.

Recommendation 1c: The County Privatization Task Force should seek advice from representatives of community groups, business people, and third party experts.

County Administrator Response: We agree that the County Administrator would do well to seek and consider input from knowledgeable parties about the subject of privatization when developing his/her report to the Board. However, as indicated in our response to

Grand Jury Recommendation 1b, the formation of a formal Privatization Task Force is not considered necessary.

Recommendation 1d: The proposed policies and procedures from the Task Force should be submitted to the Board of Supervisors by March 1997 for adoption in June in order to meet the Strategic Plan timetable.

County Administrator Response: We agree that the Strategic Plan timetable should be met. Goal 1, Action Item 2 (copy attached) of the Board's Strategic Plan directs the County Administrator to develop options for policies and criteria regarding privatizing and then report to the Board by June 1997 not March 1997 as recommended by the Grand Jury. However, as indicated earlier, to require at this time that a formal task force be involved in this effort is premature. Moreover, changing the timetable by 3 months without considering the impact of that change on other Strategic Plan items is not considered appropriate.

Finding 2: The role of county government is to govern and to take responsibility for services that are required.

County Administrator Response: We believe that the basic role of the Board of Supervisors is to govern. County government is comprised of many departments, agencies and districts whose roles and functions vary according to law and/or policies established by the Board. As such, county government is responsible both for services required (by law) and for services authorized by law which are determined appropriate by the Board.

Recommendation 2a: The Board of Supervisors should direct the County Administrator to require that every department inventory the work it does and divide that work into two categories:

1) Work that is governing, accompanied by a statement of the authority for each task that requires the work to be performed by county government.

2) Services and programs that could be provided by the private sector. A personnel count and annual cost for each line item should accompany the inventory.

County Administrator Response: The Board of Supervisors' Strategic Plan directly addresses the identification and review of departmental work which could be reduced or eliminated. (Goal I, Action Item 1 - Attachment E) The Plan also addresses policies for privatizing county services (Goal I, Action Item 2 - Attachment C).

To require the County Administrator to use a pre-determined methodology to complete these action items would unduly restrict him/her. Moreover, to inventory all county departmental work at one time would be an enormous time consuming undertaking, the value of which is unclear. Finally, to then divide all of that complex inventory into "work that is governing" and services and programs that could be privatized would be equally time consuming. (We assume "work that is governing" means services and programs that must be done by County employees.)

We think a superior approach is to first develop the policies and criteria referenced earlier; then, utilizing the talents of our department heads, focus on opportunities that are permissible under State law and have the potential for the greatest savings and/or service improvement.

Recommendation 2b: The Board of Supervisors should review these inventories by March 1997 to confirm the requirement for each line item reported. For those items not passing the Board of Supervisors' review, the service should be discontinued.

County Administrator Response. As indicated above, the issue of reviewing County work currently being performed to identify areas for potential reduction is adequately addressed in Goal I, Action Items 1 and 2 of the Board of Supervisor's Strategic Plan. To confine the Board to either "passing" or "discontinuing" all such work is considered too restrictive. For example, the Board may determine that some work should be altered, some downsized, and that some would be better performed by another public agency, etc.

Finding 3: Privatization encompasses multiple and complex issues, such as differing sizes of enterprises, varying classification of jobs, Civil Service Rules, union requirements, government regulations and laws, political turf battles, transition of county employees, management control, and budget impacts.

County Administrator Response: We agree.

Recommendation 3a: The Board of Supervisors should direct the County Administrator to analyze the issues and to determine which areas of county government could benefit most through privatization. The County Administrator should then present a priority list to the Board of Supervisors by June 1997.

County Administrator Response: This recommendation is in direct alignment with the Board of Supervisor's Strategic Plan (Goal I, Action Item 2 - copy attached)). However, we want to emphasize the importance of including department head input in this process as opposed to unilateral decision making by the County Administrator.

Sincerely,

Kent M. Taylor
County Administrator

Attachments

cc: 1996-97 Grand Jury Foreman
Each Department Head CA #96-53


COUNTY MISSION STATEMENT

COUNTY MISSION STATEMENT

Santa Barbara County's elected representatives and employees are committed to providing excellent and cost effective public services utilizing public and private means to promote a life of quality for all County residents.

ORGANIZATIONAL VALUES

Collaboration and Partnering

GOAL I: RE-ANALYZE, REFORM, AND RESPOND TO THE CHANGING NATURE OF COUNTY RESOURCES AND RESPONSIBILITIES OBJECTIVE: RIGHTSIZE THE COST AND SCOPE OF COUNTY GOVERNMENT