'Sacrificed Its Soul at the Altar of Capitalism': The US Town That Outsourced Everything

Published on
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The Independent/UK

'Sacrificed Its Soul at the Altar of Capitalism': The US Town That Outsourced Everything

The authorities in Maywood decided on a drastic approach to their budget deficit – sack every municipal worker

by
Guy Adams

Sgt. Enrique Gonzalez is overcome with emotion as he hands over his police badge (AP)

MAYWOOD, California -- When two uniformed police officers approached
Hector Hernandez as he arrived at the City of Maywood's official Fourth
of July celebrations, he feared the worst. The stocky 22-year-old -
whose neck tattoo of a Playboy bunny indicates membership of one of the
area's notorious Latino street gangs - hasn't exactly relished his
previous interactions with the local forces of law and order. Imagine
Hector's surprise, then, when the uniformed men held out an outstretched
hand, smiled and asked how he was doing. "They said they were new to
the neighbourhood, so wanted to say hello and welcome me to the event. I
think they even told me to have a nice day," he recalls. "I was like:
'You guys don't normally speak to me unless you're kneeling on my back'.
I thought it was some kind of a sting."

But it wasn't. Instead, Hector was being introduced to a brave new era in the life of Maywood.

Over
the last few years, the local government in this tiny, blue-collar town
about 20 minutes drive from downtown Los Angeles drifted towards
bankruptcy. Poverty, gang violence and inner-city deprivation were
spiralling. Then last month - in a move that made it instantly famous -
Maywood's cash-strapped city council decided to respond to its myriad
problems with a revolutionary initiative: it voted to contract out every
single public service the city once provided, from the management of
parks and libraries, to the book-keeping at City Hall, to the running of
its police department.

Today, Maywood is America's (and possibly the
world's) first completely outsourced city. Where other local authorities
might privatise their traffic wardens or binmen, Maywood's council has
gone the whole hog: sacking everyone from school crossing guards and
parking wardens, to street maintenance workers, park wardens, librarians
and even the clerical staff in city hall. The number of people it now
has on its payroll?

A big, fat zero.

In
the purge of city employees, which happened at the end of June, about
60 people lost their jobs. Most of those redundancies hit the
scandal-ridden police department. In the previous five years, it had had
to settle around 30 misconduct lawsuits, for alleged offences ranging
from civil rights violations to rape by officers to unlawful killing,
with compensation totalling $20m - double the entire city's annual
budget.

In their place came the friendly cops
that warmly greeted Hector on 4 July. They are members of the LA County
Sheriff's Department, which agreed to be paid roughly $4m a year to
patrol Maywood's streets, a figure significantly lower than the previous
police budget, even before you factor its lawsuits into consideration.

Despite
the public money it saved, the outsourcing project was highly
controversial. When it was announced, residents feared anarchy would
follow; old people thought they would be mugged in the streets; local
storekeepers wondered if anyone who would stop them from being robbed;
families presumed parks and libraries would close. "You have
single-handedly destroyed this city," the about-to-be-sacked city
treasurer told council members, during the acrimonious meeting where the
outsourcing scheme was unveiled.

One month on,
however, the naysayers have gone quiet. Maywood's parks are still open
and greener than ever. The leisure centre is overflowing with excited
children. City Hall appears to be running smoothly. And almost everyone
you meet says that since the city outsourced everything, services have
improved and petty crime and gang violence have - on the surface, at
least - virtually disappeared.

"I don't see
gangsters on the streets any more," said Maria Garciaparra, bringing her
children to the library. "I don't see new graffiti. I still have a park
for them to play in and this place to get books, so who cares whether
the city employs anyone or not? If this works, then down the line, I'm
sure plenty of other places will copy it."

Today,
depending on your point of view, Maywood represents either a shining
example of civic creativity, whose unique experiment in governance
should be copied by recession-strapped local governments across the land
or a reckless and foolhardy city that has been betrayed by leaders who
have sacrificed its soul at the altar of capitalism - and will soon
suffer the inevitable consequences.

In the
former camp, perhaps naturally, is Aldo Perez, Maywood's new director of
Parks and Recreation. He is actually employed by the neighbouring city
of Bell, which is now paid to handle Maywood's records management,
finances and human resources, under a monthly contract.

The
city was previously so dreadful at running its own affairs that he
believes locals could only have enjoyed tangible improvements from the
great outsourcing.

"When it was first announced,
people said that the sky was going to fall and that everything would
just stop," he said, while chalking white lines on a baseball field. "In
fact, we are busier than ever. For the first time in history, we are
running free swimming lessons and they're completely booked up. We had
400 people here on 4 July for baseball and children's activities.
Believe me - by outsourcing, we are actually providing people with a
better service."

Also singing the new regime's
praises is the Maywood's city spokeswoman Magdalena Prado (who also
works under contract). She argues, correctly, that the vast majority of
locals don't care who cleans their streets, or fights crime, or runs the
library - provided the job is getting done. And by any measure, she
says, those things have so far improved.

"We
are the first city to do this and it's a revolutionary idea," she says.
"So while we wouldn't want to be copied by other cities - and used as a
model by people who want to lay off employees - I would think that if
you speak to the vast majority of people in Maywood, you'll find that
they're pretty pleased with the way things are working out."

Being
pleased has historically been a rare state of mind in Maywood, a
densely-populated industrial city founded in 1924, which measures just a
mile and a half across and where employment in traditional industries
has declined heavily in recent decades, causing the white middle class
to be replaced by migrants. The city's population is officially 30,000,
with 95 per cent having Spanish as their first language. In fact,
because of illegal immigration, the number of people living in Maywood
might be as much as 50 per cent higher.

Like
many other hard-scrabble communities, Maywood's local politics have for
years been mired in acrimony and corruption. Four years ago, the town
made headlines when a clerk, Hector Duarte, was sentenced to a year in
jail for soliciting a hitman to kill a council worker who was proposing
cutbacks that might have axed his job.

As tax
revenues have fallen and demand for services increased during the recent
economic slump, Maywood was forced to confront another tough reality -
it could no longer afford to subsidise a failing police department which
according to a state investigation was: "permeated with sexual
innuendo, harassment, vulgarity, discourtesy to members of the public as
well as among officers, and a lack of cultural, racial and ethnic
sensitivity and respect".

This year, Maywood's
insurance provider came to the same conclusion. It cancelled the city's
public liability coverage, saying it could no longer afford to pay
compensation claims related to police misconduct. Despite an extensive
search, no affordable alternative provider could be found. As a result,
the council says the outsourcing all of its employees to outside
governments and administrations was forced upon it.

"We
had no alternative, because without insurance you cannot employ
people," is how councillor Fellipe Aguirre puts it. "Am I happy with
what happened? Well, at present, people are getting better services and
we are saving money. So yes. Will people copy us? Who knows? We are a
unique city with unique problems. But I think so far, what we have done
is a success."

The future may be a different
matter, though. Last week, the city of Bell found itself at the centre
of a snowballing corruption scandal of its own. A report by the Los
Angeles Times revealed that the city's council members had fiddled the
rules to pay themselves salaries of over $100,000 a year, for part time
jobs. The city's manager was earning $800,000; its head of police
$400,000.

California's attorney general is
currently investigating whether criminal charges should be brought
against Bell's government. Three senior employees have already been
forced to resign and pictures of angry crowds protesting on the streets
have made the national news. To the citizens of Maywood, who now find
their tax dollars going to this scandal-hit administration, it's a
reminder that, whatever the circumstances, you enter the cut-throat
realm of the free market at your peril.

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