The Lakewood Plan

Lakewood shocked the staid world of local government in 1954. The effects multiplied throughout California. Today, a quarter of all California cities are 'Lakewood Plan' cities.

Lakewood was the state’s first “contract city” when it incorporated in 1954.

Today, every California city contracts for some services. But Lakewood – along with about 25 percent of all California cities – has made contracting for services the core of its municipal operations.

These cities – also called Lakewood Plan cities – provide most of their municipal services through contracts with county agencies, regional service providers, and private industry.

Contracts with Los Angeles County still provide Lakewood’s “big ticket” services: law enforcement, street maintenance, and building safety inspection among them.

Special districts (not contracts) funded by county-collected property taxes provide fire protection, libraries, and waste water treatment. Schools are entirely separate from city government; their funding is controlled by the state.

Lakewood contracts with private firms for trash collection, traffic signal maintenance, street light maintenance, tree trimming, and street sweeping.

Unlike some cities, Lakewood has no special assessment districts for lighting or landscaping. Street lighting costs are paid entirely out of the city’s unrestricted revenue.

Parks, recreation and cultural activities, community development programs, the water utility and general administrative services are provided directly by the city.

Lakewood's first contracts with the county were simple. For example, sheriff’s law enforcement services were provided in exchange for the new city’s court fines and forfeitures with no additional charge to the city.

The first months of contracting showed another positive side to the Lakewood Plan – its flexibility. The Sheriff’s Department in 1954 didn’t enforce traffic laws in unincorporated areas of the county. The California Highway Patrol did. But the commander of the Highway Patrol didn’t like the idea of contracting for traffic control. Faced with this new uncertainty, the Sheriff’s Department immediately agreed to provide traffic enforcement in Lakewood, the first of dozens of innovative solutions to Lakewood’s law enforcement needs.

Lakewood became the first “city by contract,” and that fact, coupled with the city’s phenomenal growth generated enormous media attention. Suburban communities in Los Angeles County saw with contracting the means to preserve local authority without the huge expense of establishing stand-alone police departments, building divisions, or sanitation units.

Besides, said many in local government, why should an increasingly urbanized Los Angeles County be run like a collection of rural towns? In an urbanized county, why shouldn’t cities turn to a regional service provider like the county to give them lower-cost services than they could provide themselves?

The logic was compelling, and Lakewood wasn’t alone as a contract city for very long. By 1960, the principle of municipal contracting had led to more incorporations in Los Angeles County, turning square miles of tract houses into new cities. By 2003, a quarter of California cities – and not all of them new suburbs – were contracting for all or most of their municipal services under local variants of the Lakewood Plan.

Contracting even came to cities that had other traditions. Long Beach in the 1980s contracted with the Los Angeles County Sheriff’s Department to patrol a portion of the city while the Long Beach Police Department was being reorganized. Compton, which had its own police department, began contracting with the Sheriff’s Department as well.

(Downey, which incorporated as a contract city, eventually gave up sheriff’s law enforcement and established its own police and fire departments.)

What is familiar to city professionals is still controversial, however. In the 1960s, newly incorporated communities under the Lakewood Plan were branded by their critics as “phantom cities” or “minimal cities,” even though their city councils provided the same level of municipal services that non-contract cities did.

Contracting for services made Lakewood possible in 1954, and the contract model continues to provide Lakewood residents with all the benefits of local control along with the cost savings and flexibility that are built into the Lakewood Plan.

Contracting fundamentals

The Lakewood Plan began with the conviction that unincorporated communities didn’t have to choose between annexation by a big city or building a municipal infrastructure from scratch.

Instead of replicating all the functions of local government, city councils can turn to existing service providers to deliver the whole range of municipal services through a system of contracts.

During the months before Lakewood’s incorporation in 1954, the idea of contracting for services had been embraced by the county officials who were providing services, from trash collection to construction inspection, in new Lakewood neighborhoods. Rather than creating its own municipal departments, the new city of Lakewood looked forward to contracting with county departments and other agencies to continue these services.

Lakewood’s first city budget, for fiscal year 1954 -55, totaled $547,203 with more than 80 percent of expenses going for contracts with the county for municipal services. Today, contracts represent approximately 35 to 40 percent of the city's annual budget.

There were four elements important to the spread of the Lakewood Plan in the 1950s and 1960s:

• Los Angeles County had a history of providing municipal-type services to unincorporated areas and had been expanding the level and number of these services as the county became more urbanized. By 1950, the county was directly or indirectly providing services to 45 cities in the county.

• The success of Lakewood’s incorporation proved that contracting was both feasible and effective.

• The state Legislature adopted the Bradley-Burns Uniform Sales Tax Act in 1956. The law gave incorporated cities a one percent share of the retail sales-tax revenue generated by their retailers. If a community remained unincorporated, this revenue was absorbed by the county’s general fund.

• The county was a willing partner in incorporation, seeing cityhood under the Lakewood Plan as a way of strengthening county departments and financing innovations that would benefit the entire county.

The early success of the Lakewood Plan was the subject of reports in The New York Times, Time, Newsweek, and even the Harvard Law Review, which called the Lakewood Plan “the most significant undertaking involving the transfer of service functions in the United States.”

Within five years of Lakewood’s incorporation, 19 more cities incorporated as Lakewood Plan cities, with six more incorporations the following year. These early contract cities included Dairy Valley (now Cerritos), 1956; Downey, 1956 (the only city to leave the contract system after its first years of existence); La Puente, 1956; and Bradbury, Bellflower, Duarte, Industry, Irwindale, Norwalk, Paramount, Rolling Hills, Rolling Hills Estates, and Santa Fe Springs, all incorporated in 1957.

A year later, the cities of Pico Rivera and South El Monte incorporated as Lakewood Plan cities. Artesia, Lawndale, Rosemead, and Walnut joined them in 1959. And Bell Gardens, Commerce, Cudahy, La Mirada, San Dimas, and Temple City were incorporated in 1960.

Updated 07/12/2017