Loading...
Budget Workshop July 14, 2009SCANNED EXCERPT from July 14, 2009 Budget Workshop FEB 012010 REQUESTED BY: Vice Mayor Hay City Clerk's Office Mayor Taylor: I got — let me say something for the Commission. I don't know if this is the right time or not, but I want to throw it out some time so you all can think about it. I do have a list here of 29 cities and of those 29 cities 20 of them franchise out their sanitation services. Our sanitation, we have 49 employees. But if you franchise it out, what you do is you have three or four waste management people that will bid on that, on the City, cause they are willing to take the cities. Part of the deal when you bid that out is they have to hire your employees; you make that part of the deal. They have to hire your employees. You can only force them to keep those employees for one to two years possibly, then they can do what they want after that. Also, they have to pay the City a franchise fee which you would want to make that percentage equal to what your current Sanitation Department is giving into the General Fund. Right now it's, I believe what were going to get this year is $930,000 into the General Fund. We want to set our percentage for the franchise fee to at least that amount of money that they would pay us. The other thing is you could sell all your equipment, all your vehicles, cuts down your maintenance and etcetera. So, I would like to know, kind of, what impact that would have on our General Fund if we did that. Not only does it eliminate the payroll for the — not just this year, but for years to come, but also your pension. Which, our pension funds are really hurting. All of those employees have a pension, but I would think that all of those — I'd be surprised if not all, maybe one or two, aren't vested. Cause I think you are vested after about five years. So they would be vested anyway in our pension plan even though they would go to the private sector. So, I think there are 20 cities that do that for some reason and I think that is a significant amount of money, I would guess and we could get those numbers from staff. I just think we might want to take a look at that, see if anybody thinks that is the way we ought to go. Commissioner Weiland: One question, that would be $930,000 for example, as the franchise fee. Now the company that is awarded the bid is going to need to recoup that. So above and beyond that, what are our rates going up. Mayor Taylor: Well, that's a consideration because right now I think we charge $12 a month — I'm guessing. Mr. Livergood: $12.75 a month. Mayor Taylor: $12.75 a month. It would be up to the company what they would want to do with that fee. They may raise that fee in order to go out for the franchise fee that they are going to pay you back. That we'd have to look at when the bids came in. We'd have to look at well, how much are you going to charge our people. Commissioner Weiland: Wasn't this presented to us maybe twelve years ago. Once Delray did it we started to think about it, but didn't do much about it. Mayor Taylor: I don't know. I don't think twelve years back. Commissioner Rodriguez: Does the Commission — does the City Commission ultimately decide the fee for them or no. Mr. Bressner: Yeah. The way it would work is you would enter into a franchise agreement, a rate regulation process in a franchise agreement. It becomes a service level and mathematical exercise in terms of figuring out what the rates will be. The City of Royal Palm Beach and Palm Springs recently outsourced their operations. What you gain potentially in revenues you may have to be offset with increased rates to customers. Don't know. A lot depends on the rates. I think the City ought to be able to bid on the deal. Basically you can open it up and have the City bid on it too. To see. I think that would be the fair way to do it. Commissioner Rodriguez: Why don't the City just bid on the deal without anybody else? Why do we have to have an RFP? Mr. Bressner: I don't understand. Commissioner Rodriguez: Just give us the —just do it now. Mr. Bressner: We got lower rates than anybody around and better service. Commissioner Rodriguez: Yeah, but what's the cost? What's the cost? Mr. Bressner: The cost that we've been able to bring back into the General Fund, additional dollars in terms of all overall operating expenses, we've been able to bring it in under budget for the last four years. Commissioner Rodriguez: All I'm saying is we shouldn't have to wait for this exercise for the City to say we can do this better or cheaper. Mr. Bressner: Fortunately we have been doing it. I think we have been performing pretty well. Commissioner Weiland: One question. And this may have gone away since we gone to the six day work week. Yesterday when one of the sanitation trucks was done with his route he went home regardless of whether it was an eight-hour day or six -hour day. Is that still the case. Mr. Livergood: That is still the case. It's called our Task system. It has been a long standing practice in the blue collar labor agreement for many, many years. You're correct, they do, like some jobs is done they go home. It is an incentive for them to get their job done quickly, so we do know that. We know that we have approximately eight or nine less employees than we did about ten years ago. Task has allowed them and going to the automated system, has allowed us to decrease employees. We've had an incredible amount of growth, both downtown and along the Congress corridor that we've been able to absorb those additional service levels or loads without adding staff. So Task on one hand works very well for us. We are always going to have days in Solid Waste that aren't full because their operations are seasonal too. In January every house in Leisureville is going to be occupied and in July it isn't. The guys are going to drive the trucks right past them. So on any given day they aren't doing a full day's worth of work. OA Commissioner Weiland: One of my concerns and I saw it this morning on my way to work, my neighborhood, so you can figure out who the driver is. 11 th and 27th he rolled through the stop sign. And he turned right on 11th and turned off on Jerry's street, 26th Avenue, and rolled right through the stop sign. In a big truck it looks like he's going fast, but he is going zero to 60 in about a second. He slows down, but he rolls through the stop signs. To me it is like I want to get the heck out of here and go home. I think that needs to be addressed. Mr. Livergood: That's an aspect we face and the private sector faces that as well. The one positive is they are our employees. The private sector does Task as well. Mr. Bressner: It seems to be an industry standard. Mayor Taylor: My point being if you look at Solid Waste it is like an $8 million operation and I'm just asking if you franchise that out, would that have a significant impact on the overall budget. Commissioner Rodriguez: Next year, right? Mayor Taylor: You could do it before the first of October. You could go out for RFP and have it done by the 1 St of October. Commissioner Weiland: I'd be interested in looking at it and see what the figures come up with. Commissioner Ross: I'm very interested in seeing those figures. Mr. Atwood: The only difference to the General Fund would be the franchise fee would have to be higher than the $930,000 to impact the General Fund. It is not a General fund department. Commissioner Rodriguez: It's not. Mayor Taylor: I would think it would have an overall impact on your budget seeing as you would have 49 less employees plus their pensions. Mr. Atwood: It would have a negative impact on our budget with 49 less employees. You still have to fund their pensions and you'd have less employees doing it. Mr. Bressner: The other part is we would need to look at overall service levels. How would the City respond after a hurricane, those type of services. We have done very well after our storms and that's been through the Solid Waste Department as well as using outside contractors. We are done a lot before anybody else is done. Commissioner Weiland: I think our day-to-day service is superb. Mr. Bressner: If that can be replicated in the private sector, great. Mr. Livergood: I would just like to point out, Commissioner Weiland, our day-to-day service is superb. We take pride in what we do and we do it for $12.75 a month to the resident which is far less than most other cities. Mr. Bressner: Lantana is $19 a month. Again everybody chooses their service level and determines what service there is and what you expect. I think the current operation provides the value for the dollars. There's been a request for a five minute break. �1u'dith'.A. Pyle, C Deputy City Clerk Vice Mayor Hay: I would like to go back to the outsourcing that the Mayor brought up. I would like to see that move forward. See, I'm looking at you know, possibly getting rid of some stuff over there in District II. That would be a big plus so if we could see what's involved there. Mr. Bressner: The program actually would be to mobilize staff to prepare RFPs for considering outsourcing the solid waste operation as soon as we can. Vice Mayor Hay: How much does it cost to run that operation? Mr. Bressner: City staff should be given the opportunity to bid... Commissioner Rodriguez: Let me ask you a question because I think that before the break we concluded that it wouldn't impact the General Fund in the stuff we are trying to balance now, but Commissioner Hay brings up a good point. If we were to outsource this, would that land then be available to sell? Mr. Bressner: Well, you've got the Public Works facility. How big is the Public works Facility. Mr. Livergood: It is about five acres. We still run maintenance, parks and recreation. Mr. Bressner: Five acres. El Commissioner Weiland: The property is in the CRA area, correct? Mayor Taylor: Right. Take it out of the Heart of Boynton Commissioner Rodriguez: Somebody's got to pay for it. The City would still sell it to whoever would be the buyer. We don't have to give it to anybody. Commissioner Weiland: The CRA owns it. Commissioner Rodriguez: The CRA's not the owner of it. Commissioner Weiland: Yeah, you're right, I'm sorry. Mr. Bressner: If the solid waste operation was no longer there, in terms of looking at the site, I would say that at least a third or half of the site, would be the space allocated for solid waste hardware, equipment, facilities, that type of thing. It might be a little more than that. So that there would be less activity in and out of that site and that would make the site eligible to relocate some place else easier because you have a less intense use. I can't pin it down exactly From an activity level, the solid waste operation does contribute to a lot of vehicle activity. So, if that's gone and relocated someplace else, it makes it easier to consider relocation out of the CRA too. Vice Mayor Hay: Is that something you can get kind of readily? Mr. Bressner: We'll know on the basis of — basically it would be the remainder of the property of what's left. Commissioner Rodriguez: Would the proceeds from a sale go to the General Fund or stay within the -- ? Mr. Bressner: They can. Our assets have to be evaluated over a period of time and are basically part of the proposal. Same thing is you sell the water utility. Same process to sell the water and sewer utility. That can be done too. So I will -- let me put an item on the agenda to authorize staff to proceed with the RFP process. Vice Mayor Hay: Thank you. Mr. Bressner: And then we can talk about the land and all that we you have all the information back. Commissioner Weiland: An RFP is like a fact finding thing and I don't want to alarm the public and everybody that this is something we are going to do in the next three or six months. Mayor Taylor: It depends. Let's see what comes back. We can decide when it comes back if we want it separate or not. A few can say yes I'd like it or I don't. 5 Mr. Bressner: In terms of staff work, and providing services and a free flowing transition. Vice Mayor Hay: We have to explore all options. Stephanie D. Kahn Recording Secretary 2