Tuesday, October 02, 2012

Outsourcing Transparency? Not So Much...

So, getting back in the groove after several days off, I watched Dane Bora present the Costa Mesa Minute this afternoon.  He does a great job, especially during football season, when his predictions set him up for ridicule by at least half the population of the city.

Anyhow, this morning Dane mentioned the Outsourcing Chart that is presently part of the scroll on the City home page and told us that it reflects great success with the program.  He talked about annual savings in excess of $4 million and $22

million over five years.  That got my attention, so I dug a little deeper.

If you go to that four-page chart, HERE, you will find lots of large numbers, but almost every significant "savings" being touted by The City will not be realized until, and if, the pending litigation is resolved.  The City MAY NOT contract out city services to private companies until the judge gives her OK on it.  So, those heady numbers are VERY misleading - in fact, they are not true.
For example, the first item on the chart is Jail Operations, which the current council has agreed to outsource to the foreign company, G4S Security Solution, that would result in annual savings of $603,460.  The City is counting that as "savings" attributable to outsourcing, which it is NOT - yet.

They take "outsourcing credit" for staffing changes in our Animal Control operations to the tune of $98,007, but those dollars are NOT outsourcing changes - they are management changes that shifted staffing.

They show an annual savings for the hybrid plan for Building Inspections of $214,780, but that's not the result of outsourcing - we had already been using outside services to supplement staff for that function.

They tell us that by contracting our Street Sweeping Services to Athens Services we are reaping an annual savings of $87,707 plus a one-time savings of $1,060,000, but those numbers cannot be counted until the litigation is resolved.

They tell us that we'll see an annual savings of $1,370,373 plus a one-time savings of $100,000 by contracting our Parks and Landscape Maintenance Services to Merchants Landscape Services, Inc., but they shouldn't be counting that yet since it is still under the same legal restraint.

They attempt to give credit to "outsourcing" for savings in the Fire Service when the recently-negotiated side letter with the Firefighters and Interim Fire Chief Tom Arnold's restructuring plan is really a change in management policy that resulted in the presumed $1,813,000.  Those numbers will not be realized until early next year due to the need to staff up and acquire equipment.

My point here is that The City is jumping the gun in their enthusiastic touting of the "savings" realized by "outsourcing".  So far, any real savings attributable to "outsourcing" is negligible.  Those "pending" numbers are in excess of $4.1 million and the presumed one time savings is  $1.16 million - but that's in funny money.  Those dollars are NOT yet realized and should NOT be reported as such.  I'm all for Transparency, but let's just make it accurate...

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Anonymous robutto said...

this wasn't supposed to run until after the charter passed. our mistake. will rerun it Nov. 13th.

10/02/2012 06:28:00 PM  
Anonymous Tom Egan said...

One trouble with the way the current City leaders tell their story is that I feel as if I’m being sold a used car, or laundry detergent, or a newly renovated piece of real estate. They tell only the Plus side of the story; there’s never a Negative presented. There’s nothing about the spreading oil leak under the car. There’s nothing about the detergent’s negative impact on the plumbing or the ocean. There’s nothing about the black mold behind the walls.

It’s dismaying that City Council thinks it can buy love by just making happy talk.

For example, consider the downsides they don’t mention, downsides that certainly make me doubt the wisdom of their course of action.

Street Sweeping: Athens, like many contractors, has a reputation for underbidding on the initial contract, then, after the city has sold its equipment and laid off its employees, including supervisors – which effectively eliminates its ability to take back the job if it doesn’t like how the contractor performs – it sticks it to the city in future contract negotiations. If the city leaders would have included this, and priced it out over the long run, it might have had to concede it’s a bad idea to contract this out to Athens (or most any such contractor … it’s a common ploy among outsourcing contractors).

Reprographics: The city council tells us there will be a savings of $34,009 per year by their plan to outsource some of the work. What they don’t tell us is the “friction” loss from this, the staff time and effectiveness lost by having to deal with the increased overhead of getting repro work to and from the vendor. Right now, if something needs printing, staff can walk over to the shop on the first floor and turn in the order. (The orders that can be made electronically to either inhouse or outside vendor are a wash: there’s no friction loss for such orders.)

When the job is finished, getting the work back to staff is easy since everything is collocated in City Hall. But if the work is done by a remote vendor, it takes time and effort and cost to deliver the work. Imagine if there’s a rush job … no way it could get done in a timely fashion if contracted out. If city leaders had included the friction costs, the puny direct savings of $34,009 might well be swamped out by the indirect penalty to staff effectiveness.

It’s no wonder I don’t want to buy any product sold by the four Councilmen … they don’t tell the whole truth.

10/02/2012 07:04:00 PM  
Anonymous Robin said...

The challenge is to let all Costa Mesa know what’s going on, not just the readers of this blog talking or sniping amongst ourselves. We need to spread the good news that there is a positive alternative to this kind of stuff. If you want to do something practical to defeat V and elect new council members please volunteer through the CM4RG website www.cm4rg.org or message CM4RG through face book. Lots of opportunities, free training provided. We’re on a mission here but we make it fun. Hurry -This is a limited time offer, it expires Nov.6!

10/03/2012 01:16:00 AM  
Anonymous bebe said...

Yes, stay informed. Residents First. No in house business card printing needed Egan, time is passing you by. Vote 3Ms , they have a vision, not just complaints. Robin, sorry, you are too emotional and fail to offer anything other than you don't like change. CM brand is strong and getting stronger. Pensions are going to get under control. Malcontents will leave, eager new employees will come energize us. Private sector workers are as good or better than union workers. HB helicopter is just fine. Motels attracting parolees and prostitutes will be bought and torn down on the backs of our employees (salary/pensions), the charter will end the lawsuits and help us get rid of the malcontents. You will have a chance to put riggy in jail if he steers contracts to friends or enriches himself! Sandy will disappear after her third straight election defeat, weitzberg will go slobber somewhere else during a road rage incident, stephens will be at home in NB. Foley will be humiliated at charter debate and elsewhere, ridge will get back to inhaling furniture polish, and tamar can scold kids this Halloween. Enjoy these fun times.

10/03/2012 07:10:00 AM  
Anonymous Troll Tracker said...

"..Enjoy these fun times."

And Jimmy will still be an underemployed tool.

10/03/2012 08:32:00 AM  
Anonymous The Riggy Army of One said...

Did I hear it right last night about not doing anything about the fire department for a few months? Where's the savings supposed to come from if they're going to wait months and months for a new plan, all the while still racking up the OT?

10/03/2012 04:57:00 PM  

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