TAXPAYERS RIPPED OFF IN PUBLIC 'ENTERPRISE'.

Byline: Jon Coupal Local View

THE plight of the city of Gardena should be a lesson to public officials everywhere.

The 6-square-mile Los Angeles County community of 60,000 residents is poised on the verge of bankruptcy. The deadline to pay off $26 million in debt has come, and the city, whose annual budget is $36 million, does not have the money.

The origin of Gardena's financial problem goes back a dozen years to 1993 when, due to a combination of hubris and naivete, city officials formed a for-profit insurance company. Believing that under their management a homegrown company, Municipal Mutual, could compete with the likes of State Farm and Allstate, officials issued city bonds to provide startup capital.

Municipal Mutual lost money from Day One, creating an ever-deepening financial hole for which the city was responsible. Municipal Mutual continues to fail and is under state supervision.

Former Mayor Donald Dear has told The Associated Press that if he had been more sophisticated in the ways of business, he might have seen red flags along the way. But as it turned out, the mayor found himself in a Dear-in-the-headlights situation.

Belatedly, Dear realized the crux of the problem. He and the members of the City Council had no clue how to establish and manage a profitable insurance company. And chances are he and his colleagues would have been equally inept at automobile manufacturing, dry cleaning or gift shop operation.

Unfortunately, this effort to run a ``business'' - for which government officials have no expertise and which has led to significant taxpayer expense - is not unique to the city of Gardena.

For years, the Los Angeles Community College Board of Trustees has been operating a food-service program at a loss. Of course, the impact of subsidizing food service has been that less money has been available for programs for students, whose fees have been rising dramatically.

Although few students take advantage of the food-service operations, in order to comply with union agreements made years ago when the campuses were run by the Los Angeles Unified School District, the college board has kept union workers fully employed at a rate of as much as $15 per hour, more than twice the minimum wage. The result has been that the program has been losing money - nearly half a million dollars last year alone.

While the district is now attempting remedial action, many students and taxpayers are asking what took so long.

Most citizens recognize the importance of government to provide, at a minimum, for public safety and important facilities like sewers, roads, lighting and sidewalks. Some want much more, from recreational facilities to beautification projects. However, regardless of how one views the role of government, few see government qualified to provide services that are freely available from the private sector.

Former New York Gov. Mario Cuomo, hardly an advocate for reducing the role of government, summed it up well when he said, ``It is not government's obligation to provide services but (to) see that they're provided.''

In the cases of Gardena and the Los Angeles Community College District, as well as hundreds of other government entities, the job can be done more efficiently by using the Yellow Pages rule of thumb: If you can find the service offered in the Yellow Pages, then make the call, because chances are someone in the private sector can do the job better and cheaper.