County says ‘no’ to jail, roadwork privatization

County says ‘no’ to jail, roadwork privatization

by Deborah Nelson
September 28, 2007

Outsourcing some Santa Rosa government work wouldn’t save money, according to recent staff analyses.

Commissioner Gordon Goodin asked employees to look into the idea as part of attempts to reduce spending this budget year.

Officials scrutinized jail operations, road paving preparation and vehicle and equipment maintenance costs, to see if private industry could perform the work more cheaply.

Roadside and parks mowing were outsourced in the past, according to county information, but have since been returned to county oversight, due to “costs and uneven/unacceptable service provision.”

Santa Rosa Commissioners authorized 980 county employees for next fiscal year, a 39-position reduction from this year.

County Jail:

The Sheriff’s Office currently outsources inmate medical care, commissary and facilities maintenance services. The SO employs 92 corrections officers and 21 support staff to manage jail operations, according to a Sheriff’s Office report.

The analysis compared Santa Rosa Jail 2005/2006 per diem (daily costs) to Bay, Citrus and Hernando county rates. Those counties contract with Corrections Corporation of America (CCA) to run their jails.

In fiscal year 2005/2006, the county spent about $7.3 million to house an average of 464 inmates per day, per the Sheriff’s Office.

Those costs averaged $43.06 per day -- $9.85 per day less than the comparison models, according to SO figures.

Part of the savings is due to Santa Rosa Jail’s Federal inmate housing program, which receives about $50 per day per inmate, the report says.

According to the analysis:

Citrus County paid $56.60, plus inmate medical, hospitalization guarding, and transportation costs.

Hernando paid $55.96, plus inmate hospital and transportation costs.

Bay paid $46.18, plus inmate medical bills totaling over $10,000, and transportation costs.

Any future privatization may also require hiring a contract oversight manager, estimated at $40,000 to $70,000 per year; and county employee termination payouts could potentially add costs, the SO report notes.

Road repair work:

Public Works staff analyzed costs to prepare one mile of sand-clay road base for paving at 20-foot wide; and seeding, fertilizing and mulching shoulders.

The report compared a bid estimate, dated May 30, 2006, from Panhandle Paving and Grading, a private road construction company, with county labor and equipment expenses. Project estimates were based on minimum (non-FDoT certified) specifications and county-owned clay materials use

Results conclude that county-provided work costs between $15,000 and $38,000 less (9.5 to 21 percent) per mile, depending on the jobsite’s distance from county clay supplies.

The analysis assumes 8-weeks to complete the work, a ten-year equipment lifespan, 40 gallons of fuel each work day, $1,000 per week for equipment maintenance, and 80 hours overtime per eight-week period.

It notes that:

*Road crews are often utilized for other projects when weather prohibits base work.

*Road base crews are available for emergency work such as hurricane clean up and flood repairs.

*Equipment and personnel used by road base crews are shared with other crews to expedite projects and increase cost effectiveness.

*Salaries and contract rates are both expected to increase in coming years.

The report contends that “direct control of employees results in better quality work and prevents delays associated with common contractor problems such as leaving the job or providing less manpower than necessary to complete projects in a timely fashion.”

Government workers are a better deal for Santa Rosa than state road maintenance contractor VMS, Inc., according to Goodin.

“[The state contract is] significantly more per mile,” he remarked. “Nearly a thousand dollars more per mile than what Santa Rosa County’s paying to maintain our roads, and I would argue…that the types of service we get is better and more varied than what the state’s getting for theirs.”

Goodin mused that local contractor Panhandle Paving and Grading’s cost is close to government work.

“They pay taxes, they’ve got property taxes and they’ve got sales taxes, and we don’t pay that, he remarked.

“Really the thing that kind of jumps out at you, it’s not absolutely clear, but the costs they add on for profit and overhead, is largely the difference between what the costs [are] for Santa Rosa county today, and if we were to privatize it all.”

Fleet Management:

The Public Works Department analyzed relative costs of privatizing the County’s vehicle mechanic shop. Also considered was consolidating Sheriff’s Office and Property Appraiser vehicle maintenance with the county shop.

Officials estimate fleet maintenance cost $1.1 million in 2006/2007.

Currently, the Shop maintains some 600 vehicles and heavy equipment for Board of Commissioners departments, Health Department, Clerk of Courts, Tax Collector, and the Supervisor of Elections. The Department also services library vehicles.

The report concludes the County Shop could absorb 10 to 12 Property Appraiser’s vehicles, but could not take on Sheriff’s Office fleet work.

Citing factors like increased repair costs for aging equipment, commercial labor costs, and current staff flexibility, the report recommends keeping the work in county hands.

Officials say they’ll continue to research some outsourcing options, including auctioning the fleet off every year and replacing it; and contracting an in-house parts distributor, on a commission basis.

Private industry can’t compete with government employee costs, Commissioner Bob Cole told the Board. Cole owns an auto repair shop.

“I’ve talked to several of the guys in the garage out there, and I know what they make per hour, and believe me, I can’t hire people like that in the outside world for those kind of dollars,” Cole remarked.

“So the purpose of having a retirement, of having holidays off, to me, are what equates to the difference that I have to pay people to work in a repair shop, versus the people we pay to work in a repair shop. It’s kind of one hand washes the other on that.”

Staff will continue to review employee health insurance costs, and the possibility of consolidating Sheriff’s Office and County Emergency 911 dispatch offices. Preliminary estimates suggest the move could save about $85,000 per year.

Budget passes with seven percent millage reduction

Santa Rosa government will collect about $1.8 million fewer property tax dollars next year, per Budget Department estimates.

Per this year’s state legislature, local governments must cut property millage (taxing) rates.

The measure freezes 2006 tax levels as a baseline, then requires another 3, 5, 7 or 9 percent cut, depending on increase history since 2001.

Santa Rosa had to shave seven percent off last year’s revenue amount. County per-person levies rose from $266 in 2001, to $420 in 2006, according to Legislature figures.

Commissioners set next year’s millage rate at 6.0953 dollars per $1,000 in property value; down from this year’s 6.6175 rate.

At $115.7 million, the 2007/2008 budget is about $1.8 million lower than this year’s $117.6 figure. Direct operating costs reduced from $83.7 million to $81.4 million.

Officials say they’re concerned about making ends meet next year.

“It’s going to be difficult leaving the money where it’s at and trying to eat inflation, if we have an inflation year again,” Commissioner Tom Stewart remarked.

“And I can’t remember when we haven’t had an inflation year…we got our work cut out for us,” he added, “…we’re about as lean and mean as any county, if not the meanest in this state.”

Taxpayers are also feeling a pinch.

Public advocacy group Santa Rosa Taxpayers, Inc. spokesperson Dan Stewart told the Board that some businesses “feel like they’re on the receiving end of a double-barrel shotgun.”

“Their backs are against the wall,” he remarked, “they’re getting insurance rates increased and all kinds of increases from all over the place.”

“What we’re hearing…is that people don’t understand, and I don’t understand, how you can spend millions and millions of dollars on in intersection or an easement, but you don’t have money to pay for lights for ballfields,” (Dan) Stewart remarked.

Commissioners had planned to shift ballpark lighting costs to youth sports groups next year, but voted to continue funding utilities until January.

“That’s one thing we’re hearing, and when I hear it, I don’t know what to say,” (Dan) Stewart went on.

“So I don’t say a thing…with increases in tax revenue and how it appears to have doubled based on county numbers over the last four or five years -- why if you could keep the lights on in 2001 without a problem…why is there a problem now in 2007?”

(Dan) Stewart says the group plans to study budget issues and hopes to “be a helping hand” in next year’s process.

Officials noted that earmarked funds must be spent in specific areas. For example, noted Commissioner Don Salter, transportation impact fees must be spent on new roads projects.

“Just because you have a hundred million dollars…it doesn’t mean you can go spend it anyway you want to spend it,” Salter explained.

“There are certain ways within the law you have to spend that money. I hope that as you all move forward, everyone will better understand that.”

Santa Rosa is one of the best-managed counties in the state, Salter went on to say.

“We’re at the bottom quartile of total taxation in the state of Florida,” he pointed out.

Salter says he hopes to see a ‘fairer’ revenue model that incorporates sales taxes come through.

“I still don’t understand why people in this county -- about every two years -- they vote down a sales tax, they vote down other sources of revenue, and what they’re saying is, we want our property tax to continue to pay for everything we have in this county, when there are other ways to do it,” Salter remarked.

Noting that Hurricanes Ivan and Dennis recovery expended most of the County’s reserve funds, (Commissioner) Stewart said the Board will continue to fund parks.

“We have spent a huge amount of mental anguish trying to recover from the hurricanes and a lot of the funding (from FEMA and other agencies) required matches we didn’t have,” (Commissioner) Stewart observed.

“It’s been a long hard struggle, to say the least, just to meet all the obligations in terms of recovery from those two disasters.

“We sincerely appreciate all the hard work and attention that this Board has given to the efforts, and we want to work with you to see if we can do better [next year],” (Dan) Stewart remarked.