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Home My WebLink AboutSS2 - Newport Beach & Contracting OutCity of Newport Beach Contracting Out ••• ••• l s C� ``l ••• ••• • What We'll Cover • Agreeing upon some terminology • What types of cities are there? • Full Service, Contract, & In- Between • Even Full Service Cities are Different • More about Contract Cities • Comparing cities — it's tough! • A look at all 34 OC cities • What staff does Newport have that other cities may not? • Newport Beach's "Major Services Contracted Out" • Summary (work in progress) of all Services Contracted Out by the City of Newport Beach • Evaluating Efficiency via Contracting Out • Where it works • Where it doesn't ••• • Terminology • Privatize (v) -- To change (an industry or business, for example) from governmental or public ownership or control to private enterprise; and • Outsource (v) -- To send out (work, for example) to an outside provider or manufacturer in order to cut costs. • Contract out (phrase, v) — To perform a function under a specific contract or agreement with an entity other than an organization's own employees. What Kinds of Cities are There? • A "Full Service" City • One that typically has its own police, fire, and library services. ••• ••• • water /sewer, • Anaheim, Santa Ana, Huntington Beach, Orange, Fullerton, Newport Beach • A "Contract" City • One that relies on other agencies or private sector companies to provide services (sometimes without being able to choose). • Laguna Hills, Laguna Niguel, Dana Point, RSM • Something "In Between" • Laguna Beach, Irvine, Costa Mesa, Seal Beach, Garden Grove, most others. ••• ••t • Even Full Service Cities are Different • Newport Beach • Lifeguards, Senior Center, Animal Shelter, Harbor /Tidelands, EMS, Trash Collection • Anaheim • Electrical utility • Huntington Beach • Lots of State Park beach (not City Beach), private- sector trash collection. • Fountain Valley • OC Library System ••• ••• More about Contract Cities • Most contract cities in Orange County don't have the choice to contract or outsource. • OCFA gets share of property tax BEFORE city gets share; • Water & sewer districts (IRWD, MNWD, etc) get share of PT before city gets share; • OC Sheriff's Department's costs (while rising) still geared low enough to keep cities from attempting to start their own PD from scratch. OCSD balances what it charges its cities and what it gets from Proposition 172 and other County funds.* * Clearly just an opinion. •0• •0• • Comparing Cities Comparing Cities (pt 2) 19 1 Lake Forest 20 ILos-Atarriffoi c CFA 21 1 Mission Viejo OCFA 21 2 Newport Beach Orange ... 24 Placentia oc Fn 25 Rancho Santa Margarita OCIFAd:': 2 6 �n—C San liinnent@ OCFA:': 27 San Juan Capistrano 26 29 Ici.tyr JS�* 30 [Stanton :6CFA:: 31 Tustin :bCFA 32 IVilla Park QCFA 33 W6strrlinster I O&A. 34JYorbaLinda ocxn b no JVV.D -TWD .. ..... NIA WM OC City ....... OCFLP:L:':L: Scwc ::13 ...... Q N/A Briggema Dispose .1 .IJJ�OW ;:MN W D NIA BFI N/A WM OC 1::::::::c curly N/A Placentia Disposal . C . d..L. NIA WM OC .... counb C-R&R/Solag FOSCA N/A CR&R/Solag N/A WM OC <::::Qounty: riggeman ••• ••• • :City :' NIA Disposal ........... Federal city OOPLD .... . ...... L ...... OCSO ......... N/A Disposal .. ....... .......... - ............. .... ......... - .... Service ,.Sheriff .... .......... �fr and:WD :� :SL ....... ;GdY . NIA Villa Park COU6b ; Disposal (:!PPLD City MidwAyGity. NIA OC Humane 8, P ....... Society Brea . .:.: . YLWD & 4rrnrr :City, N/A YL Disposal .......... ••• ••• • •00 •00 What staff does Newport Beach have that other cities may not have? DepartmentlService Size of Staff Are they at City Hall? How are these done differently in other cities? Poke 238 No OC Sheriffs Dept or neighboring city Fire /Emergency Medical 128 161128 OC Fire Authority, pvt ambulance service Lifeguards 20 No Private sector (like US Ocean Safety) Trash Collection & Recycling 30 No Private sector (like Waste Management) Water & Sewer (Distribution, Collection) 54 No Special district or private water company Harbor Management 7 No Private sector, County of Orange, or Port District Library 38 No OC Public Library District MISIGIS 17 Yes Private sector Tide Valves 2 No Private sector In -House City Attorney 5 Yes Private sector law firm Senior Center 9 No Non - Profit Corporation or private sector Total 548 38 ••• ••• Using the OC League of Cities' Annual City Directory (2005, 2004, 2003, etc) • The OC Division of the League of Cities puts out a "City Directory" each year. • A small part of each city's page reads: "Major Services Contracted:" Cities are supposed to self - report to the League staff what services they contract out. • No one audits or reviews the submittals; • No one decides what's "major" versus minor; • The category doesn't speak to the magnitude of the contracting — is ALL of the service contracted? A PARTof the service? Very LITTLE of the service? We don't know. • Newport Beach's section says "none." We've never paid attention to that part of the Directory, since the designation has such little value. However, the 2006 version will show... Newport Beach's Major Services Contracted (16) • Trash pick -up • Specialized Legal services • Tree trimming • Overflow building plan check • Median & parkway landscape maintenance • Park Maintenance • Building maintenance & custodial services • Storm drain cleaning • Investment management • Municipal billing services • Property management • Oil field management • School crossing guards • Animal shelter • • •00 16 = MORE THAN ANY OTHER CITY! FROM "NONE" TO 16 IN ONE YEAR! Therefore, the use of the League's Directory to draw general conclusions Alley sweeping about contracting out is useless. Engineering & CIP Management Administrative Services • • • • • • • • • • • • • • • •0• •0• • Preparation of Annual Street Report Preparation of Annual State Controller's Report Assistance with Infrastructure Valuations Parcel Administration of Assessment Districts and Community Facilities Districts Investment Management Copier maintenance & supplies Laser Printer maintenance & supplies Armored Car Service Coin Handling Service Surveillance Camera & Monitoring Services Uniform cleaning services, air cleaner replacements DMV access lines through County Data Center Credit Card Processing E- payment consolidation banking service Web & Te!ephone Payments •0• •0• •• 01. Admin Services (cont'd) • AutoPay Payment System • Parking Citation Database System • Purchasing Card Program • Outgoing mail sorting & transportation • Shop equipment maintenance • Vehicle & Equipment Auction Services • Forms design, Printed Forms (American Solutions for Business) • Credit card processing (American Express) • Cell Phone Service (ATT Wireless) • Payment Processing (Automated Payment Processing) • Solid Waste Audit Services (Mike Balliet) • Sales /Use Tax Administration (State BOE) • Film Liaison Services (Mr. Joe Cleary) • Debt Collection Services (Collection Recovery Services) ••• • Admin Services (cont'd) • Parking Citation System, DMV Registration Information, FTB Offsets (Data Ticket) • Criminal History Investigations (DOJ) • Parking Citation Liens (DMV) • Delivery Services (FedEx) • Tax Filing Information Services /Debt Collection (FTB) • Audit Services (Governmental Solutions) • Appraisal Services (Various appraisers) • Bad Debt Collections (JJ Maclntyre) • SB 90 Claiming Services (Maximus) • Controller's Report & Property Tax Information Services (Municipal Analytics) • Sales Tax Audit Services, Data Reconciliation (Municipal Revenue Advisors) • Property Tax Audit Services (Munisolutions) •0• •0• Admin Services (cont'd) • Mobile Phone Services (Nextel Communications) • Alarm Monitoring (Positive Protections) • Business Card Printing (Printers Litho) • Debt Collection Services (Recovery Specialists) • Temporary Personnel Services (Staffmark) • Transient Occupancy Tax Audit Services (Tax Compliance Services) • Electrical & Gas Audit Services (Utility Cost Management) • Post Office Boxes (USPS) Zty, Business Tax, Parking Printing & Mailing Services ( Dl ) •0• •0• • General Services • Storm drain and V -ditch cleaning (Justin's Jetting; $135,210 annually) • Alley Sweeping — (Sunset Environmental, $61,896 annually) • Street Striping — (OC Striping, $80,000 annually) • Guardrail Repairs — (Alcorn Fence Company, $25,000 annually) • Steam Cleaning — (Piers and Balboa Village -- RecoverX; $136,203 annually) • Graffiti Removal — (Bonanza Steam Cleaning, Bob Rabun Painting -- $29,100 annually) • Painting Services — (Bob Rabun Painting, Fox Painting, Southern Painting -- $25K annually) • Concrete Saw Cutting and Core Drilling — (75% of concrete saw cutting and 50% of core drilling is contracted out to Penhall, Trojan, and Todd Core Drilling; $8,000 annually) • Trash Collection — (16% of single family residences done by Waste Management, 2% with Costa Mesa San District. Multi- family and commercial all private sector — up to 20 vendors from which to choose) ••• ••• • General Services (cont'd) • Citywide Tree Trimming — (West Coast Arborists; $682,000 annually) • Ficus Tree Trimming — (West Coast Arborists; $60,000 annually) • Medians, Roadsides and Parkways — (Spectrum Care and Park West Landscape Maintenance) • Parks Maintenance — (Tru Green — 20 of the City's 48 parks) • HVAC — (Cool Solutions; $15,700 annually) • Roof Repairs — (Dave Miller Roofing; $13,340 annually) • Rodent Control — (Safety First; $3,400 annually) • Custodial Service (City Hall & City Yard) — (Ed Building Maintenance; $67K annually) • Restrooms — (23 restroom sites located throughout the City. A mix of City staff and outside contractors are used for restroom maintenance. 50% of this service is contracted out from Memorial Day to Labor Day, while approximately 28% of this service is contracted out the remainder of the year [Ed Building Maintenance; $67,094 annually; Al Spinelli; $37,800 annually; Advanced Building Maintenance; $19,200 annually]) ••• ••• • Public Works, Utilities • Public Works • Engineering: 98% of all CIP (approx. $1.67 million) • Project Management: 10% of the CIP ($210,000) • Construction: 100% of CIP Construction Costs ($15.3 million) • Construction Management: 25% of CIP Construction Management costs ($200,000) • Utilities • Oil Field Management • Utility repair • Restaurant GI Inspections and Maintenance ••• ••• Building, City Atty, City Clerk • Building • Overflow Building Plan Check • Plan Check requiring special expertise (methane, etc) not on staff • City Attorney • Special legal counsel not on staff • City Clerk • Election Consultant (Martin & Chapman) • Election Services (County of Orange) ••• • Planning • Plan check • Negative Declaration & EIR preparation • Review of GPA & Zoning changes (contract planning services for private property applications) • GP update • Major Zoning revisions • BID administration • CDBG administration • Fair Housing services ••• ••• • Ire (includes EMS /Lifeguards) • Fire Station Building Maintenance • Apparatus /Equipment Maintenance • MIS /GIS Services and Maintenance • Building Rentals (Fire Station #7, Jr Lifeguard HQ) • Medic Billing and Collections • Database maintenance for medical conditions (Aculert) • Inspection /Mapping of FMZs • Weed Abatement & Fuel Modification Zone maintenance •0• • Recreation &Senior Services • Navigator Courses' Instruction • HVAC Maintenance • Elevator Service (at the theater) • Printing and Mailing (Navigator) • Bus Service (day camps) • Laser Leveling (fields) • Custodial • Officiating ••• ••• City Manager /City Council • Environmental Consulting (Everest Engineering, Community Conservancy International, Tetra -Tech, others) • Fiscal Impact & Financial Analyses (Keyser- Marston, Branin Finance, others) • Legislative Advocacy (Emanuels, Jones & Associates, MARC Associates, Ball Janik, Larry Paul, others) • NPDES education and inspections (ECIS — Restaurant BMPs) • NPDES administration (County of Orange) • Custodial @ Balboa Yacht Basin • Camera work, editing, video production, community programming (various individuals) • Property Management (Bendetti Property Management) • Lower Newport Harbor /Upper Newport Bay Studies & Programs (UCI, OC CoastKeeper, County of Orange, others) • Mooring Administration (OC Sheriff's Harbor Patrol) ••• ••• • HR, Library, PD • Human Resources • Risk Management services (Claims Administration) • Insurance brokerage • Library • Cataloguing and processing of library materials • Police • School Crossing Guard Services • Animal Shelter Is Contracting Out a Measure of Efficiency? • Maybe, maybe not. ••• ••• • It is when there are a variety of providers in the market ready to bid on those 119 services listed previously. That's why we contract them out. • It's much harder when: • The service is a specialized service not prevalent in the private sector, like: • Police, Fire Suppression, Water & Sewer. • The service involves special knowledge of laws and situations (geography, history, etc) specific to government and to Newport Beach, like: • Planning, Building, Code Enforcement, Lifeguarding, NPDES & Regional Board orders, government accounting, budgeting, etc. ... How Else Might We Measure Efficiency? • Ways to Measure Efficiency: • Newport Beach's employee numbers over time based on acreage and population growth in our own community. • Study of the Service Level Indicators we put in the RAP each year -- are we are doing more with fewer people or more with the same amount of people? • Add up the dollar value contracted activities we put out for competitive bid and compare that with past years. • A look at the tax burden on the typical resident. What the Typical NB Resident Will Pay for City Operations ••• ••• • Property tax (we get 17% of the 1 % basic levy); • Sales taxes on purchases made in town (we get 1 cent of every 7.75 cents in sales tax paid); • Business License Tax (but only if you have a home -based business — usually $121 /year); • A Cable Franchise Fee (5% of your non - internet cable bill); • Your Water and Sewer bill — the amount of the bill is partially based on water use; and • Some use Fees, like building permit fees (but only when you pull a permit) and recreational program fees (but only if you participate in a class). •0• •0• What Residents in OTHER Cities Can Pay for the Same Services • Trash Collection & Disposal fee — every other city in OC. • 106 cities collect a Utility Users Tax (with eight in OC, including Irvine and Huntington Beach — these cities collect $3.7 MN and $18 MN respectively annually via their UUTs from residents). • 21 cities collect a Special Tax for Libraries (including South Pasadena, Sacramento, Santa Cruz, Tiburon, Belvedere, Mill Valley, and Ojai). • 25 cities collect a Special Tax for Police and Fire (including Hillsborough, San Marcos, San Marino, Palm Desert, Belvedere, PV Estates, Solana Beach, and San Rafael). • Other cities have 1972 Act Landscape and Lighting Assessment Districts that pay for all of their park, median, and parkway landscaping (maintenance, operations, etc). • Several cities have gotten permission from their voters to approve a 1 % Basic Levy hike /override for pension obligations. ••• ••• For More Information • City website: • www.citv.n Out" )rt- beach.ca.us — "Contracting • Call us at 949- 644 -3002. • E -mail us at same web link above. Some points about outsourcing Private sector is more efficient than Government sector. We should be using it to provide more services. Council Study Session Testimony 11113101 In his staff report, Mr. Bludau wrote "Newport Beach contracts for fewer services than other cities." The city claims they are providing better service - show me polls that compare responses from other OC cities to those of Newport Beach! The city claims they are operating at maximum efficiency - show me multiple quotes for services from outside contractors that compare unfavorably with the city costs for the service Formal Question - What percentage of city services are actually outsourced? (See City of Huntington Beach analysis as an example of a needed report.) Newport Beach is a rich city. Yes we provide free trash collection and some ancillary services for free. However, we lag behind in other needs. There is no proof that the quality of city services is better or lower cost than outsourced services in other cities. Now you are being asked to authorize a $100 million dollar new city hall complex to house more employees whose operating efficiency is unknown but is questionable if you subscribe to the theory that private industry is more efficient than government. The city services analysis is needed first! Philip Arst 5124105 All Funds Administration $1,873,159 $478,613 $167,000 Percent Percent Administration $167,000 Total Operating Amount Contracted Contracted 22.66% Department Budget Budget' Contracted (Total) (Operating) Administration $87,500 General Fund Building & Safety 533,500 City Attorney 1,685,859 576,225 Administrative Se 158,275 Administration $1,288,187 $242,045 $87,500 6.79% 36.15% Building & Safety 533,500 Administrative Servic( 3,437,491 974,099 158,275 4.60% 16.25% City Attorney 142,000 Building & Safety 2,525,790 614,550 533,500 21.12% 86.81% City Clerk 8,300 City Attorney 1,685,859 434,225 142,000 8.42% 32.70% City Council 0 City Clerk 504,003 36,000 8,300 1.65% 23.06% City Treasurer 0 City Council 296,709 177,944 0 0.00% 0.00% Community Services 991,872 City Treasurer 1,035,007 63,137 0 0.00% 0.00% Economic Developmi Not Reported Community Services 8,121,065 2,108,066 991,872 1221% 47.05% Fire 190,002 Economic Developme 0 0 0 N/A N/A Library Services Not Reported Fire 16,920,581 2,270,747 190,002 1.12% 8.37% Planning Not Reported Library Services 3,523,893 1,204,503 32,415 0.92% 2.69% Police 536,740 Planning" 1,975,228 303,400 501,015 25.36% 165.13% Public Works 2,323,255 Police 36,118,892 4,297,205 536,740 1.49% 12.49% Non - departmental 1,341,700 Public Works 19,418,214 7,804,032 2,323,255 11.96% 29.77% $20,574,052 Non - departmental 18,434,824 10,062,274 1,341,700 7.28% 13.33% All Funds Administration $1,873,159 $478,613 $167,000 8.92% 34.89% Administration $167,000 Administrative Service 23,400,863 14,519,778 3,290,225 14.06% 22.66% Administrative Servic 3,291,225 Building & Safety 2,525,790 614,550 533,500 21.12% 86.81% Building & Safety 533,500 City Attorney 1,685,859 576,225 262,000 15.54% 45.47% City Attorney 262,000 City Clerk 504,003 36,000 8,300 1.65% 23.06% City Clerk 8,300 City Council 296,709 177,944 0 0.00% 0.00% City Council 0 City Treasurer 1,035,007 63,137 0 0.00% 0.00% City Treasurer 0 Community Services 10,301,605 3,230,482 1,171,872 11.38% 36.28% Community Services 1,171,872 Economic Developme 23,488,057 861,800 261,675 1.11% 30.36% Economic Developm( Not Reported Fire 21,468,612 4,255,397 1,181,797 5.50% 27.77% Fire 1,181,797 Library Services 4,804,556 2,108,904 32,415 0.67% 1.54% Library Services Not Reported Planning" 1,975,228 578,400 776,015 39.29% 134.17% Planning Not Reported Police 39,556,980 6,555,154 607,634 1.54% 9.27% Police 607,634 Public Works 84.816,906 38.868,955 12,009,024 14.16% 30.90% Public Works 12,009,024 Non- departmentalr' 25 508 324 IF; 157 774 1 341 700 526% 8300/,, Non - departmental 1,341,700 $20,574,052 Excludes salaries. .,,u ,where ider, able) debt sere ce " The Planning department makes use of reimbursement agreements with developers to secure funding for certain services. The agreements are of budgeted as revenue or expenditures and result in the department contracting for amounts that exceed its budgeted operating expensetals%ay be wrong due to spreadsheet transmission data error. 4 INLARU 1111 ICA Population Residents/ Rank/Res] Budget/ Rank /Res Full Time Part Time Outsourced City Services 2005 FTCty Empl FTCty Empl. Resident Budget $ City Empl. City Empl. Budget Total ? s Major 4 Anaheim FT03 -04 ** # # # 1642 $1,098,000 "($000) Privatized Trash Fire Police Services BEACH: CITIES .. 11 : 11 1 109 1 $1,721 2 358 132 $67,054 1 s Services 0 Others Dana Point 35,416 1,073 7 $706 7 33 8 $25,014 9 s s s 5 Huntington Bch 199,800 190 3 $1,817 4 1050 600 ** $363,000 1 s 48,405 252 Laguna Bch 23,727 95 1 S2,101 3 250 150 550,000 1 s 215 $1,511 Newport Beach" 80,000 106 2 27263 2 758 495 $181,062 0 199 6 $1,201 0 San Clemente 63,100 367 5 $2,100 4 172 31 5132.500 5 s s s 2 San Juan Cap. 35,834 369 6 2,318 1 97 17 $83,080 3 s s s $100,000 Seal Beach 24,157 265 4 $1,710 5 91 62 $41,300 2 s s 8 INLARU 1111 ICA Aliso Viejo 43.879 4,388 $239 10 0 $10,498 6 ? s s 4 Anaheim 340,000 170 2 $3,229 1 1997 1642 $1,098,000 2 s 1 Brea 38,960 109 1 $1,721 2 358 132 $67,054 1 s 0 Buena Park 80,100 272 $893 295 150 $71,507 5 s s 3 Costa Mesa 110,720 189 3 $1,004 586 191 $111,166 1 s 0 Cypress 48,405 252 $621 192 125 $30,049 2 s s 0 Fountain Valley 54,978 215 $1,511 3 256 42 $83,049 3 s 2 Fullerton 131,500 199 6 $1,201 662 96 $157,882 6 s 5 Garden Grove 169,200 250 $798 678 286 $135,086 1 1 Irvine 172,000 290 $581 593 304 $100,000 2 s s 0 LaHabra 61,800 207 $972 299 222 $60,079 8 s 7 LaPalma 15,408 233 $527 66 53 $8,118 2 s s 0 Laguna Hills 33,910 1,356 $398 25 10 $13,486 7 s s s 4 Laguna Niguel 67,014 1,368 $464 49 35 $31,098 6 s s s 3 Laguna Woods 19,500 2,438 $436 8 0 $8,500 7 s s s 4 Lake Forest 77,332 1,311 $393 59 31 $30,370 5 s s s 2 Los Alamitos 11,850 198 5 $1,003 60 50 $11,889 2 s s 0 Mission Viejo 98,268 780 $509 126 0 $50,000 7 s s s 4 Orange 132,947 196 4 $1,108 679 96 $147,245 5 s 4 Placentia 46,488 342 $545 136 124 $25,354 2 s s 0 Rch Sta Margarita 49,023 3,502 $470 14 2 $23,052 8 s s s 5 Santa Ana 349,100 204 $1,052 1711 0 $367,166 1 s 0 Stanton 38,305 1,473 $802 26 7 $30,706 6 s s s 3 Tustin 70,339 249 $1,356 283 0 $95,357 4 s s 2 Villa Park 6,500 1,300 $400 5 1 $2,600 3 s s s 0 Westminster 90,643 345 $789 263 203 $71,552 4 s s 2 Yorba Linda 63,931 639 $416 100 80 $26,589 5 s s s 2 AVERAGES 89,707 832 $868 353 144 $106,202 32 22 13 COUNTYTOTAL. 2,884,134 24,937 $36,459 11,987 4,645 3,743,408 111 COUNTY AVG, 84,827. 733 $1;072. 353- 137 110,100 3' Notes: = Statistical tie ** City employees per capita ciculated as residents per city employee to show more understandable whole numbers City Data - All data (except #) from Leage of California OC Cities City Directory 2005 Newport Beach considered tree trimming to be a minor cost and didn't report it. s = Subcontracted # - Calculated by Greenlight ** 600 temporary employees not counted for Newport to allow for extra beach costs