Local cities having to consolidate
DOWNTOWN — Faced with multimillion-dollar budget deficits brought on by spiraling revenues and escalating employee costs, Burbank, Glendale and Pasadena are considering consolidating a wide range of services and programs to save money.
Early discussions focus on the viability of joint police dispatch, consolidated technology services and achieving economies of scale by buying everything from paper clips to brake pads. Long-term ideas include a bus service linking the three cities.
The goal is to pull inspiration out of desperation, officials said, as they try to weather the worst recession since World War II.
Plans build on thriving joint operations that have saved the cities millions, such as Burbank’s Magnolia Power Plant, a police helicopter program and a regional communications center that serves 875,000 people over 134 square miles.
Even as they stress that the ideas are in their infancy, officials said it won’t be easy, as the concept of regionalizing services means a reduction in staff.
“I think we have tremendous relationships with Burbank and Pasadena and in the past we’ve had a number of areas where we’ve cooperated effectively,” Glendale City Manager Jim Starbird said. “There can be more areas, though. And in these times of budget pressure, there is enough critical mass to get over some of the organizational resistance that might arise.”
Budget woes
While each city faces unique budget challenges, the common thread is a gaping shortfall that must be filled by the start of the new fiscal year July 1.
Burbank officials have proposed freezing vacant positions, cutting back public services and raising some service rates to close a projected $5.8-million budget gap for 2010-11.
Officials there have grappled with budget reductions in six of the last eight years as revenues continue to lag behind the rising cost of salaries and benefits. Revenue from sales tax has also fallen over the last two years.
The state’s recent take of $16 million from the Burbank Redevelopment Agency, with the possibility of $3 million more next year, only compounds the headache.
In Glendale, officials are looking for $3 million in employee salary and benefit concessions as part of a strategy to balance a projected $8.1-million deficit. The upcoming budget represents the third consecutive year that policymakers are forced to plug a significant shortfall.
The city’s Redevelopment Agency was also forced to turn over $11 million to the state this week, and may have to give up $2 million more.
And in Pasadena, officials are anticipating a $5.7-million budget gap, which could prolong a hiring freeze, continued furloughs and possibly lead to layoffs.
Its state forfeit of Redevelopment Agency funds over the two-year period is about $12 million, effectively cutting reserves in half, officials said. “In times like this, when you’re really pressed to the wall, it’s either look for these kinds of economies or frankly watching your service levels continue to diminish,” Starbird said.
A time for study
Founded in 1994 by Jerry Newfarmer, the former city manager of Fresno, San Jose and Cincinnati, the firm Management Partners specializes in recommending ways to improve government operations.
“You have to look at the impacts on labor, budget savings, service levels, and then look at the amount of brain damage you have to go through to actually pull this off,” said Burbank City Manager Mike Flad. “When you are dealing with 80% of your budget being labor, efficiency means less people.”
The group plans to start with the low-hanging fruit, Flad said.
That means examining consolidating services for maintenance and animal shelters, and buying everything from chain saws to bullets.
Burbank and Glendale have embarked on $100-million smart utility grid systems, and each received $20 million in federal stimulus money.
The large data systems required could be backed up by the other city, saving up to $1 million in initial costs.
Newfarmer said generating funds from the disposal of surplus heavy equipment, cars and trucks is a less obvious enterprise. Streamlining the process by which cities process various permits, and consolidating some of the work of public information offices, have also been floated.
The consolidation project has two phases, he said. First, consultants scan services provided by each city and identify candidates for sharing or integration. Once the scan is completed, six recommendations will go to management.
“I think we’re just all looking for the new normal,” said Julie Gutierrez, assistant city manager in Pasadena. “And that really has to do with us looking at using more regional programs and services, and transportation really lends itself to that.”
Successful models
The three cities already work together as stakeholders in Bob Hope Airport.
The joint authority was approved in 1977 to govern the airport.
All three cities also share a stake in the Magnolia Power Plant in Burbank, adding to annual saving accrued through membership of the Southern California Public Power Authority.
In Glendale, the Verdugo Fire Communications Center serves the tri-cities along with Alhambra, Arcadia and seven other communities.
Verdugo dispatch, officials said, is a prime example of cities not having to cede their identities, along with a recently approved joint helicopter agreement among all three cities. The deal saves Burbank and Glendale about $400,000 annually.
Levels of service
Despite the possible economic benefits of consolidation, city officials acknowledged that they could face some opposition in their respective constituencies.
“Each of us have different commitments to the quality of service depending on the quality of service we’re providing,” Flad said. “For instance, Burbank might have higher standards for quality of service at its animal shelter, or vice versa.”
In Pasadena, libraries are partially funded by a parcel tax, so they have more per capita and a higher expectation for library service.
“The cities that have a higher level of service in a given area may not want to see that degraded, even if it means saving money,” Flad said.
Newfarmer said a successful effort will, no doubt, save taxpayers money. But the Achilles’ heel, he said, will be turf protection.
“The greater good is [providing] a service at a lesser cost to our people,” he said. “But that takes time, and it takes leadership.”