30 Aug 2011
- Written by Jack Humphreville
LA WATCHDOG - The City is considering the privatization of the Los Angeles Zoo and Botanical Gardens (the “Zoo”) in order to save the General Fund “at least $20 million” over the next five years. As such, the City Administrative Officer has been authorized to issue a Request for Proposals for the operation and management of the Zoo.
At the same time, as a result of pressure from the politically powerful City unions that represent 98% of the Zoo’s 231 employees, the CAO, with the assistance of the Chief Legislative Analyst, the Mayor’s Office, Labor representatives, and Zoo management, has been instructed to study an alternative to privatization that would “allow the City to realize substantial savings to the General Fund through increased efficiencies in operations over the next five years.”
But both of these “Alternative Management Systems” rely on bogus assumptions that the Zoo is a core service of the City and that the cash strapped City can afford over $20 million per year to subsidize the operation of the Zoo.
While many people consider the Zoo to be an important City asset, it is not a core function like the Fire and Police Departments, Public Works (streets, sewers, storm water, sidewalks, street lights and sanitation), Transportation, and Recreation and Parks. Rather, it is luxury that we cannot afford in these tough economic times.
Based on the Mayor’s 2011-12 Budget, the City anticipates subsidizing the Zoo in an amount in excess of $22 million, of which $4.8 million is a direct hit to the General Fund and $17.2 million is Related and Indirect Costs, which is also paid for by the General Fund.
At the same time, the City is projecting operating deficits approaching $300 million a year.
Of course, the city unions are opposed to any efforts to privatize the Zoo. This is perfectly understandable when you consider that the average annual salary and benefits package per employee is in excess of $65,000 and $34,000, respectively, a total approaching $100,000.
As a result, the Request for Proposals has numerous onerous conditions that will discourage potential operators from even considering making a proposal. On the one hand, the City wants to decrease its annual subsidy of the Zoo. But on the other hand, the City proposes to limit the operational and financial flexibility of the new management by imposing overly restrictive conditions, such as requiring adherence to the City’s unfavorable labor agreements and limiting the ability to raise admission prices without the City’s approval.
The net result is that there is no reward for the new operator who is going to be required to make significant investments in facilities, animals, technology, and management over the next five to ten years.
Furthermore, the City is discouraging prospective management teams and investors by essentially giving the City and its all powerful unions a right of first refusal as the CAO is developing an alternative plan that will allow the City and its self serving unions to maintain control.
As it is, most surveys consider our Zoo to be a second rate operation, failing to rank in the top 20 zoos in the United States.
Rather than proceeding with the current plans to either privatize the Zoo or make it more “efficient” under the City’s control, the Mayor and the City Council need to develop a bolder plan where prospective operators and investors will be encouraged to develop a world class zoo that has the ability to attract even more tourists to our City and at the same time be a first class educational resource for our children.
But to do this, the City needs to allow prospective operators and investors the necessary operational and financial flexibility, rather than tying their hands with burdensome labor agreements and unrealistic pricing policies.
This is an excellent opportunity for the financially desperate City to end its $20 million subsidy of the Zoo, a non core asset, and at the same time develop a new major league tourist attraction that will stimulate our local economy.
Don’t blow it.
And a final thought: Kate Linthicum reported in The Los Angeles Times:
“Santana and others have said that privatizing the Zoo will allow it to flourish. But City Councilman Richard Alarcon said that's all the more reason to keep control of the zoo. "If a private corporation can make it profitable, why can't we?"
If you buy that line, we have a few bridges to sell you.
Tags: zoo, LA Zoo, Mayor’s office, Labor
Vol 9 Issue 69
Pub: Aug 30, 2011