Costa Mesa city employee Billy Folsom works on a police department motorcycle in July. (SCOTT SMELTZER, Daily Pilot / August 31, 2012)

Third in a series about Costa Mesa's political battle.

*

For him, local politics is like the Cold War. Costa Mesa City Councilman Steve Mensinger equates the City Council with the Reagan administration and the public employee associations with the USSR.

It's better to amass political weapons than to discuss a truce with labor, he reasons, and eventually the collective bargaining associations will cave in like the Soviets.

"Everybody along the way said, 'Isn't there a better way to do it? Don't you want to sit down with them, hug them, kiss them?'" Mensinger said of Reagan's critics. "We're trying to get the unions to understand that the old way of doing things is not going to work."

With higher stakes and more gamesmanship than ever before, the city's politics could be considered nuclear. Mensinger and the council's ideological architect, Mayor Pro Tem Jim Righeimer, are trying to reshape municipal government in their smaller-is-better vision, which is drawing the ire of community activists and a lawsuit from organized labor.

Righeimer's fundamental argument is that long-term employee costs, including city pensions, will prove unsustainable. That's generally accurate, based on interviews with officials and municipal experts, and a year-long Daily Pilot analysis of city financial records.

But those same records and sources indicate Righeimer's reasons for abrupt, immediate action are less convincing. In calling the city's condition dire, and in describing an impending fiscal cliff, Righeimer has pointed only to worst-case financial assumptions and, experts say, exaggerated the immediacy of the city's problems.

Observers experienced in the complexities of municipal finance argue there definitely is a problem, but most say it is long-term and structural, not immediate.

Righeimer is "the proverbial bull in the china shop," said Brandman University public administration professor Fred Smoller. "I don't think that you have to get into this type of fight to bring about this kind of change."

Over the past year and a half, Mensinger, Righeimer, Mayor Eric Bever and Councilman Gary Monahan have flexed political muscle through their 4-1 majority. In their most audacious move, critics say, they rushed through an outsourcing and layoff plan without thoroughly analyzing the city's finances or knowing whether they could legally send certain services to the private sector.

While some see the council members as conservative visionaries, others call them hasty ideologues.

"You just have this idea," said Perry Valantine, a council critic and retired city planner, "that they have a goal in mind, and they're going to get there however they can get there."

Stymied by an employee lawsuit, the majority's hurried outsourcing plan is costing the city at least $1 million to defend so far, and a court injunction will block layoffs until the suit is resolved. The councilmen will tell you those legal fees are not their fault, because it is the employee association suing.

Mensinger says privatizing could solve short- and long-term budget deficits, the city's unfunded pension liability, and take care of immediate problems, such as an aging infrastructure in need of repair sooner rather than later.

"By shifting to the private sector, you save money," Mensinger reasoned. "By saving money, you're able to solve all those stand-alone issues."

*

What they knew then

City leaders didn't know with certainty whether outsourcing would help when they handed out more than 200 pink slips and launched the organization into tumult. In March 2011, they had not yet reviewed private-sector bids to see whether they'd save money.

Since then, city administrators have studied 11 services, finding seven would be more efficiently served fully or partially in-house.