see question description

Group Project/Staff Report

Assignment:

· Generate a staff report between 3-5 pages in length to the River City Town Council recommending either SUPPORT or OPPOSITION to the Town’s consideration of contracting out police services.

· Prepare statements in support or opposition to contracting out police services These statements will be from the perspective of:

· The Mayor

· The City Manager

· The Union representative for the police department staff

· A resident of River City

Prepared as you are going to speak at the River City Public Hearing, scheduled for March 4, 2020. Each team member will select a role as stated above for the hearing.

· Facts:

· The Town of River City is a small, low-income, rural, retirement community of under 40,000 people. The Town incorporated (became a city/town) 25 years ago.

· At incorporation, the Town formed its own Police department – believing that it would provide for better service than contracting with the county. The Police department currently has a sworn staff of 40 officers and 30 non-sworn personnel.

· Most of the police department (senior officers, management) are within 3 years of retirement. The Chief is 55 years of age.

· The Town participates in the CalPERS retirement system, with a 3% @50 retirement benefit for current employees. Current employees don’t contribute anything towards the cost of their retirement. The Town has implemented pension reform such that all new employees are enrolled in the 2.0%@55 retirement benefit;

· The new City Manager has examined the financial records of the police department and is concerned that it is losing money on an annual basis. He hired an outside consultant, over the objections of the police union and the Chief, to examine the cost effectiveness of outsourcing police services. A staffing audit is underway.

· The Mayor’s son-in-law is the Police Chief and he has publically defended the integrity of the man who married his daughter. The Mayor has scheduled a Public Hearing for March 4th. He is going throughout the community raising fear among the Town’s senior citizens that the new Town Manager wants to contract police services which will increase crime and fear within the community.

Question to be addressed:

· There really are only two options for the Town to consider:

· Contract for Police Services with the County Sheriff

· Keep the service in house.

· Report needs to document the current audit information on the police dept. (a cut of 13 positions) to do this, you will need to create staff report researching options for the council.

Strategies for each option:

· Contracting Out –

· Employees could be offered early retirement incentive / severance package –assume that each of the employees would accept an early retirement incentive of 6-months pay;

· Police Chief will not be offered incentive – he is an at-will employee and will be given the option to retire with dignity or be released (with cause: mismanagement);

· Council will need to authorize a contract proposal (schedule 1) from the Sheriff Dept.

· Retaining the department –

· Chief of police is terminated for cause (no severance)

· The City will have to recruit a new police Chief

· Current retirement costs are 25% of salary (paid to CalPERS). The employees contribute 0% to those costs. The Town is negotiating with the current union and is pushing employees to cover 8% of those costs. Assume that is accepted to keep the service in-house;

· New employee retirement cost is 10% of salary (paid to CalPERS) and new employees will pick up ½ those costs;

The staff report should evaluate both of these options and come up with the financial impacts of each of the decisions.

River

City Police Services and Proposal to Town Council

Video Recording

Dennis

Andy

Sara

,

Arthur

and

Iwona

Jessica

Background (Sara, iwona started feel free to edit and add more)

River City was formed 25 years ago in 1993. It is a low-income, rural retirement community, with a population under 40,000 people. River City Police Department was formed at the incorporation of the town believing better services would be provided by the town, than by contracting with _______. River city Police Department is losing revenue on an annual basis.

River City Community Members

Other Considerations: Mayor- Dennis

(address in the following way: Mayor, members of the council, and members of the public)

— We now bring our meeting to the next topic on our agenda, the outsourcing of the police department. I was going to open the meeting with comments by the community but I feel that the citizens would rather have time at the end to address the information that we are going to disclose during this meeting.

— This great city was founded 25 years ago. We have been kept safe in our beds at night by the great law enforcement staff of this city. We made a deal with all of those that take up arms to protect us. I feel that it is a great disservice not only to them, but to us as well. As you all have heard, my son-in-law is the current police chief. We live, breathe, and bleed with him and his family on a daily basis. I feel that we have an obligation to our men and women who put their lives on the line, daily.

There is research showing that there is a savings to be had for the city, but somethings do not

fiscal cost but a moral cost. We who live in this city owe are citizens the best service possible.

These Strangers will not be at our little league games. They won’t be at our dinner for fourth of

July.

Option 1: Contracting Out- Sara

Option 2: Retaining the department-Arthur

Chamber of Commerce-Iwona

(address in the following way: Mayor, members of the council, and members of the public)

River City has a current Police Department with 40 officers sworn in and 30 non-sworn in personnel that operates on a year-round basis. Within three years, most of the police department will be eligible for retirement. There are several factors to consider such as:

· The history and knowledge of the police department will be gone in the next three years.

· How will that history be collected for the town and next generation to come?

· How are we preparing and training the next group of officers to continue the good work for the people?.

· How will we those that don’t qualify for retirement be allowed to keep the job they currently have with the police department?

· Will our local business be affected by outsourcing the police, since our town is a family.

Financial Impact: Financial Director-Andy

(address in the following way: Mayor, members of the council, and members of the public)

Benefits of contracting :

· Under the San Diego County Sheriff Department, there will be a 100% (40) absorption rate of all sworn officers and a 90% (27) absorption rate of non-sworn staff (to meet budget threshold).

· Staff taking the opportunity to retire as opposed to coming over with SDSD would only result in about a 30% absorption rate or 21 staff members. However, that said, SDSD would immediately utilize their resources to replace sworn/non-sworn staff as needed (subject to further negotiation and or contract modification) and services to the public would not be interrupted. Ensuring no gap in public safety and or enforcement.

· Moving forward all benefits including health, retirement and other associated benefits would be covered by the county.

Department to remain:

· If River City decided to keep the department in-house, with mass retirement, the city would have to replace all key staff members with the exception of 13 staff members, mainly due to budget constraints. Essentially, leading to a more depleted department/workforce. The sustainability of such actions could impact future operations, most importantly, public safety.

· The police chief contract would be terminated and a new recruitment will be underway. The time it would take to fill the position is unknown, and the deputy chief officer would have to assume an interim role.

· Massive budget cuts and major changes to administration would take place.

Fiscal Impact:

· In the initial year of contracting w/SDSD, FY 2020/2021, the department budget would run a small deficit in the amount $6,843.20 to cover the costs comparable to services provided. Total costs are set to come down an estimated 5% for FY 2021/2022 and another 3-5% for FY 2022/2023.

· CalPers unfunded liabilities remain at $997,404 for FY 2020/2021. With anticipated retirement, that is set to inflate to nearly $2.7 million, a 45% increase, heavily impacting the budget.

· Employees accepting an early retirement will be offered a 6 month severance package resulting in $1.5 million dollar one time buyout.

· Currently, the Chiefs salary is contracted at $185,000 a year . Depending on the circumstances, if the police chief is relieved of his duties, that could eliminate his salary until council has made the decision to hire another. Potentially saving this amount for the department for at least a year while the recruitment is underway. If contracted, a Captain would fill this role and is anticipated to cost, under the contract, $150,000 per year.

· Currently, there are 4 workman’s compensation claims under review. If those are approved and the officers are placed on leave, the budget could encounter an additional $292,000 expenditure.

Recommendations:

· Under the circumstances brought forth via the financial analysis, it is recommended that the city contract with the San Diego County Sheriff Department.

· This will result with the following:

· Structurally balanced budget for FY2021/2022 and anticipated surplus of $257,000

· No additional increases in unfunded pension liabilities. Once paid for, the city will no longer be responsible for pension costs.

· Allocation of benefit costs for the department will no longer be a fiscal impact.

· Assuming the workman’s compensation claims were to be accepted, the city would only be responsible for those claims and no future claims could be brought forth.

· Various research shows that the majority of cities with 40-50k residents have a contracted police department.

Recommendation: City Manager-Jessica

(address in the following way: Mayor, members of the council, and member of the public)

Following Dennis/Mayor-that is true but fiscally makes more sense-let’s turn it over: Andy

I’d like to thank my colleagues for their thorough presentation this evening. It is my belief that the information presented by…represents a fair and impartial view of the advantages and disadvantages of contracting out our River City Police Department. My staff have conducted a thorough fact checking of the data presented. As you’ll recall we began this review because we were losing money annually. As Andy has demonstrated, it is simply no longer cost effective to maintain our police department. Many other cities have made this transition and it has allowed them to…..

-address residents concerns supporting/against

References (everyone)

Analysis of Police Services In-House and Contract Service Models, Town of Los Gatos

https://www.losgatosca.gov/DocumentCenter/View/15379/Police-Services-Staff-Report?bidId=

King, W., (2014), Organizational Failure and the Disbanding of Local Police Agencies; Crime & Delinquency, Vol. 60(5) 667-692

Pension liability along with the maintenance costs for equipment, buildings, and training has led to a growing crisis in state, local and county government. As new employees are hired and older employees stay on the payrolls, the governments continue to run in the red. This has led to a trend of state, county, and local governments to contracting out services that once were held in their sphere. According to Jepson, Ruddy, and Salerno, “Despite using aggressive return and discount rate assumptions, defined benefit pension plans of government entities in the U.S. currently have an estimated pension liability of over $1 trillion (Jeppson, 2018).”

Usually the fiscal responsible thing to do is to contract out emergency services. This will lesson or even out right terminate the cost. Unfortunately, when it comes to local government issues, the choices made to cut or terminate positions can lead to strife and outright hostility between neighbors and friends. There is a political cost to making cuts as families and traditional ways of doing things are turned upside down. Since the beginning of the United States, clusters of citizens that incorporated became towns and bigger groups. These groups have had a common bond through trials and tribulation and society interactions. According to Bourns and Nelligan, “The political history and geography of the United States promoted the development of decentralized government and the establishment of thousands of cities and towns during the ninetieth and twentieth centuries. Sometimes these population clusters were widely spaced, but often they grew up closely bunched into “metropolitan” areas (Nelligan & & Bourns, 2011).”

Outsourcing can negatively affect these bonds, but the overall savings to the local governments makes it a wise and necessary choice. Even in the realm of politics the dollar speaks the loudest.

The usage of taxes and revenues collected by cities need to reflect the taxpayer’s best interest. When it comes to cities, if prudent choices are not made with finances, the city can go bankrupt. This will leave taxpayers with minimal services. The hard political choice taken sooner, helps a community to thrive.

References

Jeppson, N. R. (2018). Defining and Quantifying the Pension Liabilities of Government Entities

in the United States. Journal of Corporate Accounting & Finance,

29(1), 98-106x.

Nelligan, P. J., & & Bourns, W. (2011). Municipal Contracting With County Sheriffs for Police

Services in California: Comparison of Cost and Effectiveness. Police Quarterly

, 14(1), 70-95.

GROUP5

Police Outsourcing/Contracting Police Services

Proposal to Town Council: River City Police and Sheriff Services Merger

Background

Several months ago, the Town Council approved the first steps into investigating the cost effectiveness of maintaining the River City Policy Department. The City Manager was approved to begin an audit due to the financial challenges our small town is facing. River City is a small community formed over 25 years. Most citizens earn below the median income; it is a retirement community with a population of less than 40,000 people.

River City Police Department was formed to provide immediate services to its community rather than contracting out to another agency. At the time, this provided employment opportunities for residents.

During the course of this meeting, we will hear from the City Manager, and the Finance Director to receive findings regarding the financial findings from recent audits of the department, and recommendations on how to proceed.

River City Community Members

Mayor of River City

Dennis

City Manager

Jessica

Finance Director

Andy

Chamber of Commerce Member

Iwona

Resident- Against the outsourcing
Supports the outsourcing

Arthur
Sara

Other Considerations: Mayor- Dennis

Pension liability along with the maintenance costs for equipment, buildings, and training has led to a growing crisis in state, local, and county government. As new employees are hired and older employees stay on the payrolls, the governments continue to run in the red. This has led to a trend of state, county, and local governments to contracting out services that once were held in their sphere. According to Jepson, Ruddy, and Salerno, “Despite using aggressive return and discount rate assumptions, defined benefit pension plans of government entities in the U.S. currently have an estimated pension liability of over $1 trillion (Jeppson, 2018).”

Usually the fiscally responsible thing to do is to contract out emergency services. This will lesson or even out right terminate the cost. Unfortunately, when it comes to local government issues, the choices made to cut or terminate positions can lead to strife and outright hostility between neighbors and friends. There is a political cost to making cuts as families and traditional ways of doing things are turned upside down. Since the beginning of the United States, clusters of citizens that incorporated became towns and bigger groups. These groups have had a common bond through trials and tribulation and society interactions. According to Bourns and Nelligan, “The political history and geography of the United States promoted the development of decentralized government and the establishment of thousands of cities and towns during the nineteenth and twentieth centuries. Sometimes these population clusters were widely spaced, but often they grew up closely bunched into “metropolitan” areas (Nelligan & & Bourns, 2011).”

Outsourcing can negatively affect these bonds, but the overall savings to the local governments makes it a wise and necessary choice. Even in the realm of politics the dollar speaks the loudest.

The usage of taxes and revenues collected by cities need to reflect the taxpayer’s best interest. When it comes to cities, if prudent choices are not made with finances, the city can go bankrupt. This will leave taxpayers with minimal services. The hard political choice taken sooner, helps a community to thrive.

Option 1: Contracting Out- Sara

Consolidated public safety agencies have existed in the United states for over 100 years. In 1967, the President’s Commission on Law Enforcement and Administration of Justice suggested that pooling and consolidating resources could lead to increased levels of satisfaction and reduce costs (Corsaro, N. & Wilson, J.M., 2018). River City is the perfect city to consolidate with our local Sheriff’s office based on the statistical standards for success. Our city has less than 50,000 residents.

Our small police department has been lacking the resources needed to be efficient and effective. Looking at the advantages that other police departments have experienced by contracting with their partner Sheriff’s department have outweighed any disadvantages that have been mentioned here tonight. Our local Sheriff’s office will offer a larger department with additional resources and training.

Resources for Patrol officers to have computer access to instant data information systems, which include:

· Driving Maps

· Calls of Service

· Wanted Suspects

· In Field reporting

· Drivers License Information

Why wouldn’t we want our local officers to have this access for safety but also for policing our community. This equipment changes the resources for patrol to do their job.

In addition, crime lab services will be more advanced for investigations.

Overall, contracted services will benefit citizens. River City will receive additional services from law enforcement. Services will be more high tech; in the 21st century; and officers will be well trained officers.

Option 2: Retaining the department-Arthur

Contracting of police services has become a modern trend in the U.S society. Different states such as the State of California are finding it economical and effective to contract police services rather than public police services. Although contracting has been deemed cost-effective, improved service delivery, and effective, it has significant drawbacks than the thought benefits. Its results bring tension to national security and citizens’ privacy. The current world is dominated by new technologies that have led to information revolution. In law enforcement, information is essential, and the law mandates the balance between citizens’ privacy and information gathering. Police contracting can lead to misuse of surveillance cameras and large-scale databases undermining the privacy of citizens and national security (Benicsák, 2012). Dimensions of privacy will be undermined both at the national and community level.

Furthermore, private police lack accountability. They are not subjected to similar formal and legal schemes of accountability governing public police units. They are allowed to bring with them weapons, use force, intrude into individuals’ privacy rights, and detain suspects. Private police can discover crime but may opt not to notify public authorities. Accountability is mandatory in public police agencies, but private police accountability is lacking (Sparrow, 2014). Lack of accountability is inherently dangerous to the well-being of society.

Contracting police services is a threat to police jobs. Contracting has amplified the accessibility of low skill and low paid security employments, which are joined with obtaining some services from the private sector. These practices challenge the job security of public police. The private sector competition is unfair because it is tolerant of low training standards and cheap labor (Sparrow, 2014).

In conclusion, contracting police services should be discouraged. It has several drawbacks than its estimated benefits.

Chamber of Commerce-Iwona

River City has a current Police Department with 40 officers sworn in and 30 non-sworn in personnel that operates on a year-round basis. Within three years, most of the police department will be eligible for retirement. There are several factors to consider such as:

· The history and knowledge of the police department will be gone in the next three years.

· How will that history be collected for the town and next generation to come?

· How are we preparing and training the next group of officers to continue the good work for the people?.

· How will we those that don’t qualify for retirement be allowed to keep the job they currently have with the police department?

· Will our local business be affected by outsourcing the police, since our town is a family.

· Keeping our town and business safe is very important to our town.

Financial Impact: Financial Director-Andy

Benefits of contracting :

· Under the San Diego County Sheriff Department, there will be a 100% (40) absorption rate of all sworn officers and a 90% (27) absorption rate of non-sworn staff (to meet budget threshold).

· Staff taking the opportunity to retire as opposed to coming over with SDSD would only result in about a 30% absorption rate or 21 staff members. However, that said, SDSD would immediately utilize their resources to replace sworn/non-sworn staff as needed (subject to further negotiation and or contract modification) and services to the public would not be interrupted. Ensuring no gap in public safety and or enforcement.

· Moving forward all benefits including health, retirement and other associated benefits would be covered by the county.

Department to remain:

· If River City decided to keep the department in-house, with mass retirement, the city would have to replace all key staff members with the exception of 13 staff members, mainly due to budget constraints. Essentially, leading to a more depleted department/workforce. The sustainability of such actions could impact future operations, most importantly, public safety.

· The police chief contract would be terminated and a new recruitment will be underway. The time it would take to fill the position is unknown, and the deputy chief officer would have to assume an interim role.

· Massive budget cuts and major changes to administration would take place.

Fiscal Impact:

· In the initial year of contracting w/SDSD, FY 2020/2021, the department budget would run a small deficit in the amount $6,843.20 to cover the costs comparable to services provided. Total costs are set to come down an estimated 5% for FY 2021/2022 and another 3-5% for FY 2022/2023.

· CalPers unfunded liabilities remain at $997,404 for FY 2020/2021. With anticipated retirement, that is set to inflate to nearly $2.7 million, a 45% increase, heavily impacting the budget.

· Employees accepting an early retirement will be offered a 6 month severance package resulting in $1.5 million dollar one time buyout.

· Currently, the Chiefs salary is contracted at $185,000 a year . Depending on the circumstances, if the police chief is relieved of his duties, that could eliminate his salary until council has made the decision to hire another. Potentially saving this amount for the department for at least a year while the recruitment is underway. If contracted, a Captain would fill this role and is anticipated to cost, under the contract, $150,000 per year.

· Currently, there are 4 workman’s compensation claims under review. If those are approved and the officers are placed on leave, the budget could encounter an additional $292,000 expenditure.

· The city currently has three pending lawsuits. According to the city attorney, it is anticipated that the two of the lawsuits will result in settlements, in which dollar amounts are currently unknown. This will be a one-time payment to the plaintiff.

· All associated materials, gear, weapons, vehicles, and supplies will be sold to the SDSD utilizing a Schedule K depreciation table for a one time payment to River City in the amount of $1.7 million. These funds will be allocated to the general fund to cover costs associated with the transition.

· Real property associated with the River City PD will remain with the city (city owned) and it will be utilized by SDSD to continue police services via a long term lease. Monthly revenue from this lease is projected to be a variable amount of $8-10 thousand per month.

Recommendations:

· Under the circumstances brought forth via the financial analysis, it is recommended that the city contract with the San Diego County Sheriff Department.

· This will result with the following:

· Structurally balanced budget for FY2021/2022 and anticipated surplus of $257,000

· No additional increases in unfunded pension liabilities. Once paid for, the city will no longer be responsible for pension costs.

· Allocation of benefit costs for the department will no longer be a fiscal impact.

· Assuming the workman’s compensation claims were to be accepted, the city would only be responsible for those claims and no future claims could be brought forth.

· Transfer of existing lawsuits, reports, evidence and any other case related information, SDSD would assume responsibility.

· Various research shows that the majority of cities with 40-50k residents have a contracted police department. Primarily this to avoid fiscal impacts and provide a more comprehensive service to the city in need.

Recommendation: City Manager-Jessica

The information presented throughout this staff report represents a fair and impartial view of the advantages and disadvantages of contracting out our River City Police Department. My colleagues and staff have worked diligently to conduct a thorough fact checking of the data presented throughout this report. As the city manager, I initially requested this audit because of the precarious fiscal situation we are facing. While our police department has served us well for the past 25 years, we cannot ignore the facts that it is simply no longer cost effective to maintain our police department within the city. Our great city will continue to be protected through the contract with the Sheriff’s department and public safety will remain a top priority. Many other cities similar to ours in terms of population and size have made this transition and it has allowed them to maintain a high quality of life for their residents while providing important public safety resources. If we were to maintain the department within the city, it would not be with the officers you know and love today-massive financial restructuring efforts and layoffs would ensue. Contracting out allows us to retain nearly all of our existing law enforcement staff and provides immediate financial stability which will serve the city for years to come. It is because of this that I am confident in giving my recommendation to the Council to pursue contracting out our police department.

Bibliography

Corsaro, N., & Wilson, J. (2018). The effects of police contracting on crime: An examination of Compton, California. Journal of Experimental Criminology, 14(1), 59-81.

Jeppson, N. R. (2018). Defining and Quantifying the Pension Liabilities of Government Entities

in the United States. Journal of Corporate Accounting & Finance,

29(1), 98-106x.

Nelligan, P. J., & & Bourns, W. (2011). Municipal Contracting With County Sheriffs for Police

Services in California: Comparison of Cost and Effectiveness. Police Quarterly

, 14(1), 70-95

Benicsák, P. (2012). Advantages and Disadvantages of Private Military Companies.UNIVERSIT

Y OF DEFENCE/CZECH REPUBLIC, 7.

Sparrow, M. K. (2014). Managing the boundary between public and private policing.US Depart

ment of Justice, Office of Justice Programs, National Institute of JusticeEffectiveness.