Newport mayor: More outsourcing may be on horizon

NEWPORT BEACH — As the City Council approved $8 million in budget savings for the 2011-12 fiscal year, Mayor Mike Henn and other council members signaled Tuesday that they are looking to outsource more city services in the coming year.

One of the suggestions is to privatize residential trash collection, a city-run service that residents rank highly in satisfaction surveys.

The push to privatize and share services with neighboring cities fits into the council's long-term goal of reducing employee costs and pension obligations. Newport's measured approach to outsourcing has been to slowly shift services to the private sector.

"This year's budget cuts are half the story," Henn said after the council adopted the budget. "Our ability to meet next year's goal … will require further consideration of contracting out of services, as well as regional collaboration on ways to save money."

Beyond trash collection, Henn said other services that may be outsourced include jail administration; training for police officers, firefighters and lifeguards; restroom maintenance; oil well operations; the city print shop; and some financial operations.

There are no "sacred cows," Henn said.

City functions that could be combined with neighboring cities, he continued, are the Fire Department; the S.W.A.T. team; police recruitment and investigations; vehicle maintenance; some information technology services; and police dispatch and jails.

They could be "in-sourced," meaning Newport could become a contractor for other cities, Henn said.

He emphasized that each service would be analyzed and some may have a "perceived benefit" being in-house that would outweigh any cost-savings achieved through outsourcing.

The incremental approach Newport is taking is in clear contrast to the Costa Mesa City Council's sweeping move to hurry and outsource many of its services.

Over the past year, Newport has, by piecemeal, contracted out its street sweeping, parking meter operations, beach trash collection, animal shelter and street-light maintenance.

The next round may stir more controversy, Henn warned, because trash collection is "a very large issue for the city" that some people consider "sensitive."

In the city's 2010 resident satisfaction survey, 92% of residents said they were "satisfied" or "very satisfied" with their trash collection. City Manager Dave Kiff in the past has said that people like the city's custom service.

Rainbow Disposal charges neighboring Huntington Beach about $10 million per year. That works out to about $57 per resident, including some miscellaneous city costs.

Newport, on the other hand, spends about $69 per resident on its trash collection, which covers employee salaries, benefits and vehicle maintenance, totaling about $5.8 million per year. Salaries for refuse workers range from $49,000 for entry-level positions to $114,000 for the refuse superintendent.

If Newport were to spend as much per resident as Huntington Beach, it could save about 17% of its costs, or $1 million annually.

Council members Keith Curry and Leslie Daigle said they agreed with most of Henn's suggestions.

In other action, the council:

•Unanimously approved its $255.5-million budget, which included $8 million in savings achieved through cuts or increased revenue. About 30 full-time positions were eliminated, although some of those were vacant.

•Allocated more than $200,000 in special event funding for community groups. Representatives from the various events, like the Susan G. Komen Orange County Race for the Cure, pleaded with the council for more money than a committee had recommended. Some of their entreaties worked. The Newport Beach Restaurant Week, for instance, received $10,000 more, for $34,000 total.

•Appointed Kory Kramer and Jay Myers to the Planning Commission and eight others to various boards and commissions.

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