Maywood, Calif., has become the first city in the country to fire all its workers and outsource their jobs to combat financial woes.
To be sure, many of the municipal workers were hired back on a contract basis, The New York Times reports.
The city of about 50,000 is just southeast of Los Angeles.
As for the financial problems, property taxes, a key component of any city’s revenue, dropped to $900,000 from $1.2 million in 2007. Sales taxes also are in a slump.
The police department was the city’s biggest albatross. Its budget last year totaled almost $8 million, more than half of Maywood’s revenues.
The department was full of harassment, discourtesy and a lack of respect, according to a report by the state attorney general.
The city couldn’t get insurance for any of its employees, thanks to $19 million in claims pending against the police.
If Maywood didn’t can its work force, bankruptcy was the only alternative, city officials told the Times.
But now things are better.
Maywood’s contract with the Los Angeles County Sheriff’s Department costs the city about half what it paid its own police force. And the city’s insurance premiums have dropped by 80 percent.
Other cities might copy Maywood.
“Bankruptcy is not an option,” Jay Goldstone, chief operating officer of San Diego, wrote investors, reflecting a sentiment shared by officials in many other cities.
That may leave outsourcing as an attractive alternative.
© 2023 Newsmax Finance. All rights reserved.