Town Square

Council's outsourcing a hot campaign issue

Original post made by Kathleen Liston, Menlo Park: Sharon Heights, on Oct 24, 2006

Recent efforts by the Menlo Park City Council to explore alternative options to running city services have met acrimonious resistance.
Council candidates Heyward Robinson, Vince Bressler and Rich Cline are using two outsourcing efforts, Burgess Pool and child care, as a linchpin in their campaign, inaccurately claiming the process was not transparent and attacking the majority council members, who were taking responsible actions as stewards of our public funds.
The budget, for example, shows that Menlo Park’s city-run gymnastic program is profitable, demonstrating a successful public recreation program. On the other hand, the city's child care and aquatics programs are heavily subsidized.
Neighboring cities do not use local taxes to subsidize child care and other city-run aquatic programs are also operated at a loss. This indicates it is wise for the council to consider alternatives to cut non-essential expenses. Many city services are outsourced, such as soccer, tennis, and music programs, and many municipalities outsource services.
The outsourcing of the pool was reviewed in public council meetings and commissions where Heyward Robinson voiced support for the pool proposal and city staff reports recommended the pool proposal.
Yet, Mr. Robinson, who is endorsed by the SEIU, which represents most city employees and has stated they will not support any “privatization” (Almanac, April 26), changed his mind and now voices opposition to the outsourcing.
Menlo Park’s city staff is excellent and the debate on outsourcing should not be interpreted as a question of their capability or a vote against the SEIU. The SEIU serves its members well as evidenced by the quality of service our citizens receive and the quality of the information they produce in staff reports and budgets.
Nonetheless, Menlo Park faces a $1.8 million budget shortfall and exploring options in a constructive and open forum is critical to maintaining our current city staff and meeting the long-term needs of Menlo Park citizens. John Boyle, Lee Duboc and Mickie Winkler represent a slate of candidates willing to explore and sometimes make tough choices that may require short-term change, but long-term benefit to citizens and staff.
Kathleen Liston


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Posted by Where have all the dollars gone?
a resident of Menlo Park: Central Menlo Park
on Oct 30, 2006 at 12:07 pm

Two things:

1. The city never ran the new aquatics center, so there are no numbers to compare. Would the pool need to be "heavily subsidized" if the city charged the same fees that Tim Sheeper charges?

2. How much are taxpayers spending to subsidize developers using the Planning Dept.? A planning dept. is one of the few city departments that is legally entitled to recover all its costs from user fees. Any city struggling with a deficit should look to its cost-recovery from permits, plan checks, inspections, etc.

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Posted by CorrectMeIfImWrong
a resident of Menlo Park: Downtown
on Oct 30, 2006 at 3:36 pm

The real issue is not that Duboc, Boyle, and Winkler are "willing" to explore privatization, the real issue is that they seem ideologically commited to it even when it makes no financial sense to do so. And there is some question of their integrity in citing financial data and other facts.
For a long time, Duboc and Winkler cited "phantom savings" to justify privatizing the child care service. Web Link

“After months of trying to get firm numbers from Menlo Park city officials, the Almanac finally found out last week that the true cost to operate the city's child care programs is $1.14 million, just $4,500 more than income received from tuition.

This is a shocking disclosure, given that the City Council majority of Nicholas Jellins, Mickie Winkler and Lee Duboc have repeatedly claimed that the programs cost the city $444,000 more than they take in. As a result, the trio has pressed ahead with a request for proposals from private firms to operate the programs based on the premise that they are operating at a loss of nearly half a million dollars a year.”
Later it was found out officially that potential savings would be only $73k.

Based on the meager savings, the popularity and quality of the city-run service, eight of nine citizens on the child care task force recommended staying with city run program. The only exception: John Boyle.

When the lone private bidder dropped out. Boyle, Winkler, and Duboc blamed it on a vast union conspiracy, and in an email, Winkler promised to revisit the subject, if re-elected. She also again mis-stated the costs savings, putting it back at $440k, and now began mis-quoting a staff report alleging that it said bidders failed to bid for fear that the “union would tarnish their reputation in other communities”. In fact the staff report did not say that, and did not even mention the union as was confirmed in a Palo Alto Daily Article.

Boyle, Duboc, and Winkler all repeated and re-used the misquoted staff report in one way or another to blame their privatization failure on a vast union conspiracy rather than poor up-front analysis they did to learn the potential costs savings.

This is just one example. Few people remember that the failed Bayfront Park golf course was another failed privatization effort justified by cost savings. The errors made in that effort make the child care effort look diligent.

I'm sad to say there has been nothing impressive about Duboc, Winkler, and now Boyle.


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Posted by Validator
a resident of Hillview Middle School
on Oct 31, 2006 at 8:12 am

WhereHaveAllTheDollarsGone has an excellent point regarding the pool. Besides the lack of competitive bids (not even one!) or due diligence regarding the shifting estimates of costs, the privatization deal totally overlooked the upside potential of profit sharing. With the array of programs offered (I doubt the city would have created this, by the way), and the rates charged, there is no doubt in my mind that the private operator will profit to the exclusion of the residents who continue to pay taxes on their facility that is provided rent-free to a for=profit enterprise. A responsible steward of the public's asset would have negotiated the opportunity to share in the profits to help cover the large indirect costs and provide relief to residents.

The city is not at all recovering the costs of the planning department. This is a no brainer to fix.

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Posted by Critic
a resident of Menlo Park: Felton Gables
on Oct 31, 2006 at 8:52 am

Mike Taylor, acting director of Community Services, compiled a comprehensive analysis of all local municipal facilities for the council. Unfortunately, the information in that report was largely disregarded by the council. If they had read it, they would have asked why Menlo Park's projected loss figure was so out of line with the experience of other cities. Almost all other local municipalities are running their facilities at (or close to) breakeven; many, including Palo Alto, are making a profit.

I'd like to see a breakdown of that projected loss figure. What overhead was included? How many users were projected, and at what fees? Was Tim Sheeper's rent (he offered the city over $100k/year to use the facilities) factored in?

I am sure it was expensive to run the old pool, but a big chunk of expenses msut have gone to repairing it every time it broke down. Did the projected expenses include a super high maintenance fee based on the charges incurred by the old pool? We'll never know.

The city outsources many of its current functions, including routine park maintenance and the soccer program. Even the basketball referees are outsourced! No reasonable person, and I include the challengers in that group, would object to outsourcing those operations. A complete analysis, which the city did not do, might prove that outsourcing the pool also made sense, but there is absolutely no justification for privatizing a brand new pool with a no-bid, no-cost sweetheart deal contract.