New Council Rescinds Ban on Contracting Private Services : Government: In a blow to municipal labor unions, the moratorium supported by many of the city’s 1,800 employees was overturned on 4-0 vote.

ANAHEIM —  In a blow to the city’s municipal labor unions, a new City Council majority on Tuesday night voted to rescind a moratorium on contracting with private industry for services.

“We can’t close our eyes to privatization if it’s going to save this city thousands, maybe millions of dollars,” said Councilman Irv Pickler before the council’s 4-0 vote to overturn the moratorium.

The ban was supported by many of the city’s 1,800 employees who fear that they will lose their jobs if city officials look to cut costs by turning to the private sector.

“Keep in mind that when you make a conscious effort to disregard the opinions of employees while making decisions regarding their livelihood, you also make a conscious decision to compromise the quality of life for citizens in this city,” said James Michaud, a representative with the Anaheim Municipal Employees Assn.

The ban on contracting with private industry was imposed three months ago in an apparent attempt by some council members to win support from the city unions for their reelection campaigns. At that time, the ban passed on a 3-2 vote.

Despite the ban, the city still maintained about 340 contracts worth $126 million annually with private firms that perform city tasks. The firms perform a range of services, such as processing parking tickets, score keeping and officiating at city athletic leagues and lobbying government officials in Washington.

The council’s support for the moratorium shifted after the Nov. 3 election when one of its supporters, William D. Ehrle, was unseated and replaced by Frank Feldhaus, who campaigned on the promise to bring back outside contractors to cut city costs.

“I made a campaign promise to uncuff the city manager’s hands so he could do everything in his power to balance the budget,” Feldhaus said before he voted. “And I intend to keep that promise.”

Councilman Fred Hunter, one of the strongest supporters of the ban, was absent Tuesday night. Councilman Bob D. Simpson, who voted last August in support of the ban, changed his position Tuesday and voted to lift it.

Simpson said it was never his intention to prohibit the city manager from looking for cost-effective alternatives for city services.

The moratorium effectively restricts the council from privatizing city services and stopped City Manager James D. Ruth from using his authority to contract for any services within a $25,000 range. Despite the ban, Ruth could still look into the cost effectiveness of contracting out larger projects.