Outsourcing’s Effect On Government Transparency

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While cities like Costa Mesa and Santa Ana consider outsourcing numerous city services to the private sector, open-government advocates say that unless cities require companies to disclose records related to those services, members of public wouldn’t be entitled to them under state law.

“The public is entitled to have access to relevant information … about a corporation’s performance of these previously governmental functions,” said Peter Scheer, executive director of the First Amendment Coalition.

Not requiring disclosure of the relevant records, he said, “would hinder accountability and transparency. Those companies are not in the business of accountability and transparency to the public.”

The decades-long trend toward outsourcing services at all levels of government has gathered momentum in recent years as the recession has wreaked havoc on traditional sources of government revenue.

Costa Mesa’s Republican-controlled City Council made national headlines last srping when it announced plans to outsource a majority of city services and issued pink slips to more than 200 city employees.

In September, Santa Ana officials announced that the city was facing a $30-million budget deficit for the coming fiscal year and have proposed outsourcing various services, including fire protection and running the city zoo.

Since 1968, the California Public Records Act has required cities to disclose the vast majority of records they keep. The few exceptions relate to such things as personnel matters and attorney-client communications.

The law was used to great effect last year by the Los Angeles Times to obtain documents for its reporting on the city of Bell. Eight Bell officials were charged later with misappropriating $6.7-million in public funds.

Among the most revealing of public records are internal communications among city employees. These emails and memos are often the only way the public can discover what is really taking place in a specific city project or program.

But when a private firms provide city services, members of the public aren’t entitled to internal company records under the Public Records Act.

City leaders can fill this loophole by including a provision in contracts that requires a higher level of disclosure from companies.

But Scheer said requiring disclosure would likely create added costs for cities, which often turn to outsourcing because of financial strain in the first place. “It doesn’t come for free,” he said.

And beyond the cost issue, there has to be political will among city leaders to require the increased transparency. Whether that will exists in Costa Mesa and Santa Ana is unclear.

Before Costa Mesa can outsource large numbers of services it will likely have to become a charter city. City leaders have recently begun drafting a charter, which is essentially a city constitution.

Open-government advocate Terry Francke said charters can include a provision that city contracts must require vendors to disclose certain documentation related to their performance.

“Their challenge there is to describe what kind of communications would be material to evaluating cost and performance,” like emails, notes, and other internal records, said Francke, who is general counsel for Californians Aware.

“That’s just an extension of what the norm would be if the work were done in-house,” he said.

Costa Mesa leaders have said throughout the year that transparency is a top priority as they look into outsourcing. But when asked recently about outsourcing’s effect on public records, Costa Mesa Mayor Pro Tem Jim Righeimer said the city shouldn’t require a high level of records disclosure, such as emails, from companies with city contracts.

“It’s none of our business,” said Righeimer. “Why would I need any emails from them internally” to evaluate their performance, he asked.

Righeimer said the public wouldn’t need access to internal company documents because the city will have contract administrators and auditors to ensure that vendors are performing the services specified in their contracts.

“We need to have a process in place where we can measure that they abide by the contract,” he said. “We shouldn’t have to delve into their company.”

Costa Mesa Councilman Steve Mensinger was more open to the idea.

“I’m 100 percent in support of any transparency initiative that allows the public to see what municipal government provides and how it provides it,” said Mensinger. “Transparency needs to apply to both private entities and public entities, period.”

What information should be disclosed? Mensinger said that “depends on what the information is and the confidential nature of it … what is reasonable and what is not reasonable.”

You can reach Nick Gerda at ngerda@gmail.com, and follow him on Twitter: twitter.com/nicholasgerda.

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