Attachment 4 with Exhibit A & B Los Gatos Monte Sereno POLICE DEPARTMENT 5 ke DATE. 211012015 TO: Town Manager Greg Larson FROM. ChiefMatt Frisby SUBJECT. Police Outsourcing Cost Comparisons Background: Town Council and staff have received numerous inquiries in recent weeks regarding the potential outsourcing oflos Gatos police services to the Santa Clara County Sheriff. This issue was previously raised at the Town Council' s Strategic Goals Retreat a year ago on February 10, 2014. At that time, the Council did not direct any consideration of outsourcing of Police services and staff ceased work on the issue. Instead, the Council directed the Police Department to be the first department to provide an in -depth budget presentation, which occurred on May 19, 2014 as part of the Council' s regular Budget Hearing. In October 2014 Council directed staffto prepare a report comparing law enforcement costs between Los Gatos and Monte Sereno and the potential impacts of terminating the Monte Sereno police services agreement. As part of that research and analysis, staffobtained and reviewed the law enforcement services agreements for Cupertino and Saratoga with the Santa Clara County Sheriff. On ednesday, the Mayor asked that the potential outsourcing of police services be added to the Council' s agenda item regarding the Monte Sereno Police Services agreement. Consequently, staff is providing the readily available information from existing contracts with the County Sheriff. Given ongoing Police operations and other Council priorities, fiuther staffwork regarding outsourcing ofpolice services will require Council direction to reverse the Council' s action a year ago. Discussion: The County Sheriff charges the exact same hourly rates for various types of law enforcement services to the cities of Saratoga and Cupertino, as summarized in Attachment 1 ( Town -Sheriff Law Enforcement Cost Comparisons) and detailed in Attachment 2 ( comparative hourly rates on pages A39 and A40 of the Los Altos Contract). Applying the Sheriff' s same hourly rates for the current hours of police services in Los Gatos results in sworn staffing costs that are nearly $ 1 million greater for the Sheriff ($10.8M vs. $9.9M, see the middle shaded line on Attachment 1 under Los Gatos). Attachment 1 is a comparison of the Saratoga and Cupertino law ATTACHMENT
enforcement budgets and hours of service with the Town of Los Gatos under the Town' s Police Department or if hypothetically outsourced to the County Sheriff. Adding in other Town Police expenses ( dispatch, records, parking, administration, etc.) and deducting the revenue received by the Police department (Monte Sereno agreement, Federal and State grants, citation revenues, etc.) results in a net cost savings of only $350,000 by outsourcing to the County Sheriff ($10. 8M vs. 11. 2M, see the lower shaded line on Attachment 1 under Los Gatos). Not included in this analysis are any transition or labor costs that may be incurred by outsourcing Town police services. The far lower law enforcement costs for Cupertino and Saratoga are achieved because those cities receive far fewer hours of law enforcement services, as per their contracts with the County Sheriff. Saratoga receives 27, 000 hours of service per year from the County Sheriff and pays 4. 6 million, both 40% of the comparable numbers for Los Gatos. Cupertino receives 59, 000 hours of service and pays $ 9. 5 million, both 12% lower than Los Gatos ( see the lower shaded lines on Attachment 1 under Saratoga and Cupertino) Consequently, it appears that there are no inherent savings achieved through outsourcing to the County Sheriff. Rather, any savings are solely due to the reduced hours of law enforcement services provided in those communities. This makes logical sense given that law enforcement cost factors ( labor, benefits, vehicles, equipment, etc) are typically uniform across a geographic region. Further, if fewer hours of police patrol and other services are desired, then the same savings can likely be achieved whether the law enforcement services are provided by the Town itself or by the County Sheriff. Conclusion: Staff would not recommend any further consideration of outsourcing given the minimal cost savings that could likely be achieved and the negative impacts that repeated consideration of outsourcing has had on Police morale, recruitment and management workloads. But if the Town Council does want to further consider outsourcing some or all Police services, then it would be appropriate to identify and budget available funds at the Mid -Year or the annual Budget to engage a professional consultant who has done Police consolidation studies. If the Council simply wants to reduce Police hours of service and corresponding Police costs, then direction can be provided for inclusion in the upcoming proposed budget. However, staff does not recommend a reduction in current Police staffing given current activity levels and desired Police response and associated services. Exhibits: A. Town -Sheriff Law Enforcement Cost Comparisons B. Comparative hourly rates on pages A39 and A40 of the Los Altos Contract
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EXHIBIT A PROPOSED COSTS FISCAL YEAR 2014-2015 LOS ALTOS UNINCORP. RATES CUPERTINO HILLS SARATOGA CITIES GENERAL LA ENFORCEMENT Proposed Hours - Activity Proposed Hours - Patrol Total Hours 38, 248. 0 5, 421. 0 20, 060.0 14, 696. 0 Proj Costs FY 2014-2015 @ $ 164. 90 $ 6, 307, 095 $ 893, 923 $ 3, 307, 894 $ 2, 423, 370 TRAFFIC ENFORCEMENT- DAYS: Proposed Hours 7, 200.0 43. 0 4, 195. 4 0. 0 Proj Costs FY 2014-2015 @ $ 162.43 $ 6, 984 $ 681,451 $ 0 Cupertino @ $ 162. 45 $ 1, 169, 640 TRAFFIC ENFORCEMENT- NIGHTS: Proposed Hours 0. 0 0. 0 0. 0 11 Proj Costs FY 2014-2015 @ $ 166.04 $ 0 $ 0 0 Cupertino @ $ 166. 06 $ 0 INVESTIGATIVE HOURS: Proposed Hours 7, 200.0 600. 0 2, 400. 0 0. 0 Proj Costs FY 2014-2015 @ $ 159.02 $ 1, 144, 944 $ 95, 412 $ 381, 648 $ 0 FY15 Contract Cities Proposed Costs 05-15 -2014 A - 39 DSA =O%
EXHIBIT A PROPOSED COSTS FISCAL YEAR 2014-2015 LOS ALTOS UNINCORP. RATES CUPERTINO HILLS SARATOGA CITIES RESERVES ACTIVITY HOURS: Proposed Hours 1, 650. 0 22. 0 340.0 11r Proj Costs FY 2014-2015 @ $ 48. 70 80, 355 $ 1, 071 $ 16,558 $ 0 OPERATING COSTS OF EST VALLEY SUBSTATION: Proj Hours FY 2014-2015 45, 448 5, 464 24, 255 14, 696 89, 863 Percentage 50.5748% 6. 0804% 26. 9911% 16.3538% Proj Costs July 2014 - Oct 2014 @ $ 418, 614 yr 70,571 8, 484 37, 663 22, 820 Proj Costs Nov 2014 - Jun 2015 @ $ 418, 614 yr 141, 142 16, 969 75, 326 45, 639 Total Proj Costs of Substation = $ 418, 614 211, 713 25, 453 112, 989 68,459 SUBTOTAL COSTS: Proj Costs FY 2014-2015 8, 913, 747 $ 1, 022, 843 $ 4, 500,540 $ 2, 491, 829 PROJECTED SPECIAL SERVICES Projected Hours FY 2014-2015 1, 815. 5 0 0 0 Cupertino Traffic Sergeant 189, 351 0 0 0 Saratoga School Resource Officer 0 0 100, 000 0 SCHOOLS RESOURCE OFFICER Proj Costs FY 2014-2015 @ $ 136.23 395, 721 0 0 0 1 SRO @ 85% and 1 SRO @ 75 %) TOTAL SHERIFF LA ENFORCEMENT COSTS Projected Costs FY 2014-2015 9, 498, 819 $ 1, 022, 843 $ 4, 600, 540 $ 2, 491, 829 CAPPED COSTS 2014-2015 Proj Costs Capped @ 4. 6% ( CPI +2 %) Increase AMOUNTS BELO CAP OF 4. 6% 9, 840, 602 $ 1, 060, 170 $ 4, 753, 605 $ 0 341, 783) ($ 37, 327) ($ 153, 065) $ 0 FY15 Contract Cities_ Proposed Costs 05-15 -2014 A - 40 DSA =O%