By Roy Reynolds
With Democrat Tom Daly winning the 69th Assembly District seat, let’s have a look at the Orange County Clerk-Recorder Department he’s leaving before the Board of Supervisors appoints Daly’s successor. This item is expected to be on their December 4th Agenda.
Per their website, the Clerk-Recorder “maintains records of births, marriages, death, real estate transactions, and fictitious business names within the county.” Simply put, this operation is purely clerical and might readily be OUTSOURCED. This has the potential of saving money and placing an ordinary government function with a private sector operator which would operate it for a profit, but be contractually bound to match or exceed its current service level. Outsourcing cuts waste, rationalizes labor, reduces overhead and, by design, would not cost the County any more to operate the unit than today as competitive bidding would ensure costs are minimized via a lower bid.
How simple could this process be? The Clerk-Recorder should have a budget, a business plan, an organization chart, documented procedures and a recent audit. This material is simply made available via an “RFP” or “RFQ” (Request for Proposal or Quotation) and offered to a bidders list. Any number of private firms or corporate entities might have an interest in competing for this business — banks still have large clerically-focused back offices, are well versed in customer service and have the experience in automation that could operate this small Department, taking responsibility for its computer systems, or substituting its own. An accounting firm might have an interest, or a law firm or a local company like First American, Fidelity National or CoreLogic that deals with real estate title processing and insurance. It’s a business opportunity the competitive private sector wouldn’t ignore in this fiscal climate.
The Clerk-Recorder also acts as a document archiver — pictured is the “tear down” building Daly acquired for secure, presumably climate-controlled storage. Yet, many private firms are in the document management business — a perfect example is Iron Mountain, a well-regarded international firm with facilities here in Orange County.
By bidding them out, County operations will become more efficient and less labor intensive as it’s in the outsourcer’s interest to make them so. Government bureaucracies have NO interest in improving their own operations because there’s no bottom line incentive, and neither will it be in the public employee union’s best interest.
Critics of outsourcing usually cite nonfactual generalizations that the unit’s work is unique, or somehow can’t be accomplished by the private sector — such claims are never supported and are usually union-concocted smokescreens to protect their own interests. This all falls into the “Yellow Pages test” — an easily understood concept where governments contract out their internal functions to private sector firms who do similar work. This strategy has worked well in local governments like the city of Sandy Springs, GA.
By outsourcing, the County has fewer, or no, personnel liabilities and less exposure to risk Its overall management costs, obligations and responsibilities, and labor issues are dealt with by the outsourcer. Negotiated service levels and performance guarantees contractually placed on the bid winner ensure that the Department operates as before, or even better as the new operator is incented to be more efficient and cut costs where possible. If no vendor responds or produces a suitable proposal, the County has no obligation to proceed and the Department operates as before.
Considering their obvious experience, the Clerk-Recorder unit itself should compete for the business as they best portray their own level of expertise and will likely find some efficiencies which would reflect in lowered costs.
The County has just awarded major Information Technology contracts as outsources to SAIC, a publicly-owned systems integrator, and Hewlett Packard. As well, the Supervisors considered privatizing the fire and emergency services operation at John Wayne Airport. While we don’t know the details yet*, the JWA outsources are apparently being covered by the OC Fire Authority, but it’s significant that the BOS thought to do it. OCTA has received awards for outsourcing their paratransit services.
The Board should show more forward thinking in doing this – their perception will be that control is lost, but unbiased oversight and strong legal stipulations in setting service goals and customer expectations will lessen risk, policy violations, inappropriate decisions and avoid situations as Board Chairman Moorlach was complaining of recently where property tax bills were late in mailing due to inadequate systems. Said above, if the bid evaluations fail to produce a suitable vendor for the Clerk-Recorder, the County need not proceed, nothing changes and Daly’s successor is then appointed.
If the outsource succeeds, it’s reasonable to assume the successful firm will pursue similar opportunities in the public sector, grow over time and remit tax revenue back to the government – that doesn’t occur now with government operations that duplicate work that’s also done in the private sector. For example, there’s no good reason that Orange County collects its property tax when commercial banks perform similar remittance functions like collecting credit card and loan payments.
It’s time to prove the private sector can run many government operations more efficiently, without the risk and for less cost. As the cliché goes, this isn’t rocket science – it’s paper pushing.
*UPDATE (11/26/12). Supervisor Moorlach has updated news on the John Wayne Airport Fire/Emergency Services arrangements: http://bit.ly/QmbpYb. It’s encouraging that the Airport will still be seeking bids to see if a third party operation can provide the same service level for less than the OCFA, but I doubt it should take nine months to find out.
UPDATE (2/7/13). Hundreds of applications were received for this position per the OC Register yesterday: Clerk-recorder job draws 900 applicants, including three long-time County politicians and two senior staffers:
Applicants include Chris Norby, former county supervisor and state assemblyman; Dick Ackerman, former state senator; Harry Sidhu, former Anaheim councilman; Steve Rosansky, former Newport Beach councilman; Renee Ramirez, the county’s assistant clerk-recorder who is currently heading the department; and Hieu Nguyen, who served as chief deputy recorder under former Clerk-Recorder Gary Granville.
UPDATE (3/18/13): I’ve also proposed that the County’s Treasurer-Tax Collector could be outsourced. See my post here: Another Outsourcing Candidate: OC’s Treasurer-Tax Collector.