Up to now, Mayor Steve Bach has laid off people here and there. But last week, he took out 59 employees, an entire department, by outsourcing the city's fleet maintenance.
"It's not to get rid of the people," Bach's chief of staff, Laura Neumann, tells the Independent. "But it is to get rid of the pensions. That's where the rubber hits the road for us here at the city."
The city participates in the statewide Public Employees' Retirement Association, as well as in special police and fire pension plans. Its annual payment for all three plans has gone from $12.2 million in 2003 to an expected $25.8 million this year. City-owned Colorado Springs Utilities has seen a similar rise.
If negotiations go as planned with private contractor Serco, the city will be able to subtract fleet from the pension equation starting Jan. 1, saving an estimated $225,000 per year for 10 years. Which, of course, is a relative drop in the bucket.
So ... who's next?
Well, as Neumann puts it, "I have been charged with looking at every single department for optimization and potential outsourcing." And the city already is seeking a consultant to study staffing of fire operations.
On the trucks
On May 20, the city posted a request for proposals for "fire services best practices." Proposals are due Monday; Neumann says the city wants a consultant to "verify that our present staffing model serves our taxpayers well."
To justify the outside analysis, the RFP notes, "In the wake of recent catastrophic fires, the City of Colorado Springs wishes to conduct an operational audit of its fire department and all fire services to ensure that the department is efficiently utilizing and maximizing City resources, properly staffing and training personnel, and fully promoting fire safety, prevention and enforcement."
The RFP calls for bidders to evaluate:
• recruitment and retention;
• effective communications within the department and with other city departments;
• rescue, fire-code compliance inspections, fire prevention, emergency medical response and hazardous materials response;
• and assessment of local fire risks and long-range planning based on those risks, and training firefighters to preserve arson scenes.
Another factor the RFP will cover is "the number of firefighters on a truck," Neumann says via e-mail, all but confirming rumors that Bach might be interested in reducing staffing on fire apparatus.
The National Fire Protection Association, a leading advocate of fire prevention and an authority on codes and standards, calls for a minimum four firefighters on an engine or ladder company. According to the NFPA's online Q&A about standards, "If they only have three firefighters, they aren't going to be able to do certain things safely." That's because the two-in/two-out rule requires that firefighters work in teams of at least two when in hazardous situations. Two must be outside the hazardous area, monitoring the activities of the two inside the hazardous area.
"If the first-arriving company has only three firefighters on the apparatus, it means that the company can't do interior firefighting until a fourth person arrives," the Q&A states.
Manny Navarro, Springs fire chief from 1994 to 2008, says the city's policy requiring four on an apparatus was adopted following a 10-fatality nursing home fire in 1991 wherein not all companies had four firefighters.
"We brought up the minimum staffing for every fire company," he says via phone from his division fire chief job in Menlo Park, Calif. "And this resulted from a community-wide discussion."
International Association of Fire Fighters Local 5 president Jeremy Kroto says in an e-mail that Local 5 will withhold comment until it's notified of the findings by the outside consultant.
One fire department arrangement will remain unchanged, at least for now: Fire apparatus, such as pumpers and ladder trucks, will remain in the hands of a few city workers due to their certification requirements and complex systems.
But another 4,500 city and Colorado Springs Utilities vehicles and pieces of equipment will be maintained by Serco. In the next 90 days, the city and the United Kingdom-based megafirm will try to hammer out the details of the arrangement. Assuming it goes according to plan, the fleet department will be dismantled and its employees laid off.
Serco might hire some of them back, Neumann says, but the contract won't mandate that. Nor will it mandate that Serco invest in local companies, though city fleet has spent millions of dollars a year with roughly 100 local vendors.
The Springs' fleet department has earned a reputation for efficiency; it's been named to Government Fleet magazine's "100 Best Fleets" for nine years running, including this year. But outsourcing is where such operations are going, says Len Gilroy, director of government reform with the libertarian think tank, the Reason Foundation. A 2007 study, he says, showed roughly 25 percent of local governments outsource fleet.
"Vehicle fleet maintenance is not inherently a government function," he says. "We're talking about the same maintenance you and I go to the market for.
"Last year, the National League of Cities put out a report saying we've had six straight years of revenue decline," Gilroy adds. "Local governments are still reeling from the impacts from the recession. That always prompts governments to start looking at alternatives, such as going to the private sector."
The city made such a move last year, when voters approved the lease of city-owned Memorial Health System to the University of Colorado Health. Now the Springs is in a lawsuit with PERA, alleging the city owes nothing toward Memorial's 4,000 employees' retirements. PERA argues state law bars the city from leaving without paying for future benefits, and that UCH paid the city $185 million for that purpose. It further argues that should the city prevail, PERA's local government division will have to make up the difference, a potential budget catastrophe for those agencies.
As of today, PERA isn't arguing that the city's fleet workers deserve the same treatment. But PERA attorney Adam Franklin says PERA is checking to see if "there are any compliance issues presented."
Assuming there aren't, the city projects operational savings of $666,666 per year in the first three years. But severance packages are estimated to eat up $700,000 of that. And Neumann acknowledges that the city's incurring a human cost, too.
Within 90 days, she says, she will unveil "some sort of plan for our 2,100 employees, so they will know what will be considered and what won't be, so at least to put some peace of mind to the troops."
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