Attachment 4 - Outsourcing Memorandum (with Exhibits A and B)DATE. 211012015
Los Gatos
Monte Sereno
TO: Town Manager Greg Larson
FROM. • Chief Matt Frisby
Attachment 4 with Exhibit A & B
POLICE DEPARTMENT
SUBJECT. Police Outsourcing Cost Comparisons
Background:
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Town Council and staff have received numerous inquiries in recent weeks regarding the
potential outsourcing of Los 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 staff to 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, staff obtained and
reviewed the law enforcement services agreements for Cupertino and Saratoga with the
Santa Clara County Sheriff.
On Wednesday, 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 staff work regarding outsourcing of police 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 LAW 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
Proj Costs FY 2014 -2015 @ $166.04 $0 $0
Cupertino @ $166.06 $0
11
$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%
RESERVES ACTIVITY HOURS:
Proposed Hours
EXHIBIT A
PROPOSED COSTS
FISCAL YEAR 2014 -2015
RATES CUPERTINO
1,650.0
Proj Costs FY 2014 -2015 @ $48.70
OPERATING COSTS OF WEST VALLEY SUBSTATION:
Proj Hours FY 2014 -2015
89,863
LOS ALTOS
HILLS SARATOGA
22.0 340.0
UNINCORP.
CITIES
11r
$80,355 $1,071 $16,558 $0
45,448 5,464 24,255 14,696
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
PROJECTED SPECIAL SERVICES
$8,913,747 $1,022,843 $4,500,540 $2,491,829
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 LAW ENFORCEMENT COSTS
Projected Costs FY 2014 -2015
CAPPED COSTS 2014 -2015
Proj Costs Capped @ 4.6% (CPI +2 %) Increase
AMOUNTS BELOW CAP OF 4.6%
$9,498,819 $1,022,843 $4,600,540 $2,491,829
$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%