Agenda Item D.1
CPMS DISCUSSION/ACTION ITEM
Meeting Date: February 1, 2022
TO: Mayor and Councilmembers
FROM: Michelle Greene, City Manager
SUBJECT: Authorization for the City Manager to Sign and Submit a Notice of Dispute to the County of Santa Barbara Sheriff’s Office Disputing the Sheriff’s Office's Re-computation of Compensation for Fiscal Year 2022-23
RECOMMENDATION:
A. Receive and file a report on the proposed Santa Barbara County Sheriff’s Office Fiscal Year 2022-23 law enforcement services rates; and
B. Authorize the City Manager to prepare and submit a written notice of dispute to the Santa Barbara County Sheriff’s Office, in accordance with the terms of the Agreement to Provide Law Enforcement Services between the City of Goleta and County of Santa Barbara, disputing the Sheriff’s proposed FY 22/23 cost increase under the Agreement.
BACKGROUND:
The City of Goleta contracts with the Santa Barbar a County Sheriff’s Office (“Sheriff’s Office”) for law enforcement services pursuant to the Agreement to Provide Law Enforcement Services between the City of Goleta and County of Santa Barbara (“Agreement”). The City also provides office space, meeting room, break room, locker room, garage and storage container space at City Hall at no cost to the Sheriff’s Office for use by the Goleta Motors Unit, parking enforcement staff and other personnel.
The cities of Solvang, Buellton, and Carpinteria also contrac t with the Sheriff’s Office for law enforcement services (collectively, the “Contract Cities”).
The Agreement includes provisions for making an annual adjustment in how much the City compensates the County for the quantity of law enforcement services bei ng purchased. These provisions also specify, based on the annual re -computation, that the County will provide the City an estimated compensation amount on or before November 1 of each year and a final re-computation on or before January 15 of the fiscal year. The term of the Agreement runs from July 1,2019 to June 30,2023.
1 Meeting Date: February 1, 2022
Dispute Over FY 2021-22 Law Enforcement Costs
ln the current 2021-22 fiscal year, the City will pay a base amount of $8,607,721 for law enforcement services , which is approximatel y a 14.75% increase over the prior fiscal year’s compensation. This increase is the outcome of a negotiated amendment to the Agreement resulting from the Notice of Dispute (and ensuing dispute resolution process) initiated by the Contract Cities around this time last year in response to proposed annual compensation increases stemming from the Sheriffs Office's implementation of a revised cost methodology ("Revised Cost Methodology"). Proposed increases for each Contract City were initially in the 35 -40% range. ln the-Notice of Dispute for FY 2021 -22 contract costs, the Cities alleged, among things, that the revised methodology was inconsistent with the provisions of the Agreement.
Proposed FY 2022-23 Law Enforcement Costs
Fiscal Year 2022 -23 is the last ye ar of the four -year Agreement. Per the Agreement’s terms (Attachment 1), on January 11, 2022 the City received a cost sheet from the Sheriff’s Office (Attachment 2) with the proposed law enforcement services rates for the services applicable to Fiscal Yea r 2022-23. The costs sheet for the coming fiscal year proposes an annual cost of $ 9,759,127, which is an increase of $1,151,406, or approximately 13.38%. The proposed increase would result in a two year increase of nearly $2,257,953.00, or approximately 30%. The rates are similarly raised for the other three Contract Cities.
Staff is recommending that the City Council, pursuant to the provisions of the Agreement, submit a letter to the County disputing the annual re -computation of compensation. The purpose of this matter is to allow the City Council to consider and authorize sending a Notice of Dispute to the County.
DISCUSSION:
Staff has reviewed the proposal and back-up data, and in consultation with Russ Branson Consulting (i.e., the Contract Cities’ consultant on this matter), believes that the proposed cost increases are not justified. (See PowerPoint from Branson Consulting, attached here as Attachment 3) As a result, staff recommends authorizing the City Manager to prepare and submit a notice of dispute to the Sheriff’s Office. Under the terms of the Agreement, a notice of dispute must be submitted to the Sheriff’s Office within 30 days of the receipt of the proposed rates in order to contest them. The notice of dispute will start the 30-day period between the parties to reach an agreement; if that fails, the process will continue through more formal dispute resolution mechanisms. As of January 27, 2022, all of the other Contract Cities have authorized dispute resolution notices to be sent to the Sheriff’s Office.
The Contract Cities are also currently engaged with the Sheriff’s Office in negotiation of the future contract for services beyond Fiscal Year 2022-23.
2 Meeting Date: February 1, 2022
FISCAL IMPACTS:
There is no direct fiscal impact resulting from issuance of the notice of dispute. If the dispute resolution process moves forward following the notice of dispute, there will be a fiscal impact in terms of staff time and legal services from participation in the dispute resolution process. Those costs are uncertain at present.
If the City accepts the proposed rates without protest, the City will be obligated to pay a much higher cost in Fiscal Year 2022 -23 for the law enforcement services. Law enforcement contract service costs represent the City's largest single expenditure in the General Fund, so an increase in contract costs of the magnitude proposed by the Sheriff’s Office will have a significant impact on the General Fund. It is expected that service level cuts could be a part of the necessary considerations i n response the final contract amount, should it remain anywhere close to the amount proposed by the Sheriff’s Office.
ALTERNATIVES:
The City Council could opt to not send a notice of dispute resolution and accept the proposed rate increases, as is; or provide alternative direction to staff.
Reviewed By: Legal Review By: Approved By:
___________________ ___________________ _________________ Kristine Schmidt Megan Garibaldi Michelle Greene
Assistant City Manager City Attorney City Manager
ATTACHMENTS
1. Agreement No. 2019 -043 and Amendment No. 1 to Agreement No. 2019 -043 to Provide Law Enforcement Services between the City of Goleta and County of Santa Barbara
2. Proposed Rates for Fiscal Year 2022 -23 from the Santa Barbara County Sheriff’s Office
3. Russ Branson Consulting PowerPoint Presentation
3 ATTACHMENT NO. 1
Agreement No. 2019 -043 and Amendment No. 1 to Agreement No. 2019 - 043 to Provide Law Enforcement Services between the City of Goleta and County of Santa Barbara
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 27
28 29
30 31
32 33
34 35
36 37
38 39
40 41
42 43
44 45
46 47
48 49
50 51
52 53
54 55
ATTACHMENT NO. 2
Proposed Rates for Fiscal Year 2022-23 from the Santa Barbara County Sheriff’s Office
56 Goleta
DSU Summary - Contract Cost Hours Purchased 26,280
Patrol Costs Hourly Rate Total Contract Cost
Deputy Costs
Deputy S&B Cost 102.90 2,704,212
Indirect Rate @ 9.5% 9.78 257,018
True-Up Cost - -
Cost Inflation @ 0% - -
Deputy S&B Cost 112.68 2,961,230
Patrol Support
ADMN OFFICE PRO I 0.11 2,891
ADMN OFFICE PRO II 4.28 112,478
ADMN OFFICE PRO SR 1.88 49,406
EXTRA HELP 0.02 526
SHERIFFS COMMANDER 3.29 86,461
SHERIFFS LIEUTENANT 7.06 185,537
SHERIFFS SERGEANT 24.79 651,481
SHERIFF'S SERVICE TECHNICIAN 1.74 45,727
Indirect Rate @ 9.5% 4.10 107,748
True-Up Cost - -
Cost Inflation @ 0% - -
Patrol Support S&B 47.27 1,242,256
Direct Patrol S&S 15.86 416,801
Direct Patrol S&S True-up - -
Total Patrol Cost 175.81 4,620,287
Law Enforcement Support Costs (includes S&B, Indirect, and S&S Costs) Investigations
General Investigations 29.26 768,953
SOD, Narcotics 4.28 112,478
SOD, Intelligence 2.14 56,239
SOD, High Tech Crime Unit 2.13 55,976
Total Investigations 37.81 993,647
Forensics 6.35 166,878
Crime Analysis Unit 1.16 30,485
Property & Evidence 3.01 79,103
True-Up Cost - -
Total Law Enforcement Support 48.33 1,270,112
Hourly Contract Rate 224.14 5,890,399
Menu Items 2,126,390
Dispatch 313,019
DSU Admin 69,912
Total Contract FY 20-21 Actuals 8,399,720
Inflation - 2 years @ 3.0% 511,543
Applied True-up for FY 2020-2021 847,864
Total Contract FY 22-23 Estimate 9,759,127
Amended Exhibit E-4
Annual Cost Computation Fiscal Year 2022-23
57 Goleta - Menu Items Detail FY 20-21 (actuals)
Position Reimbursable Cost Basis Hours Full Cost Unreimbursable Cost COMMUNITY RESOURCE DEPUTY 183,718 1,585 183,718 - NARCOTICS DETECTIVE 168,916 1,613 168,916 - NON -RELIEF TRAFFIC DEPUTY 351,260 1,549 351,260 - NON -RELIEF TRAFFIC SGT 238,611 1,675 238,611 - NON -RELIEF TRAFFIC SR DEPUTY 228,951 1,890 228,951
SCHOOL RESOURCE DEPUTY (DP) 180,934 1,437 180,934
SHERIFF'S SERVICE TECHNICIAN (PARKING OFFICER) 90,051 1,856 90,051 Total S&B 1,442,441 11,603 1,442,441 - Patrol Support
ADMN OFFICE PRO I 1,357
ADMN OFFICE PRO II 50,717
ADMN OFFICE PRO II - EXH 5
ADMN OFFICE PRO SR 22,250
EXTRA HELP 246
SHERIFFS COMMANDER 39,077
SHERIFFS LIEUTENANT 83,771
SHERIFFS SERGEANT 294,014
SHERIFF'S SERVICE TECHNICIAN 20,688
S&S Cost 171,823
Total Patrol Support 683,949 -
Total Menu Costs 2,126,390 11,603 - 58 ATTACHMENT NO. 3
Russ Branson Consulting PowerPoint Presentation
59 SBSO DSU Cost
Analysis
FY23 Contract Analysis
60 Work To Date
1. Reviewed FY23 Model for accuracy
2. Had two calls with the Sheriff’s Office’s consultant, Natelson Dale (ND), and Kristie Velasco from the County to discuss model question s and confirm how the County costing model works (model appears to be accurate in terms of calculations assuming accurate data input)
3. Provided ND and Kristie with follow-up questi ons on the Pay Detail for FY21 actuals, some questions answered, a few still outstanding
RBConsulting
2 61
Summary of Findings
RBConsulting
3 #1: The disconnect between cost of service and hours of service does not meet the spirit of the contracts
#2: Actual costs have increased significantly less
than the costs charged to the four cities over the
last five years
#3: The complexity of the cost allocation model
makes it difficult to trust how costs charged to
the cities are calculated year-to-year
62 #1: Disconnect Between Cost and Hours
RBConsulting
4 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
Average Cost Change Share Average Hours Share
Comparison of Average Patrol Cost Increase to
Average Patrol Hours Share
City County
Cities’ share of cost increases
does not match the share of
patrol hours
The cities’ cost shares are the
direct result of decreasing
County patrol hours
‐
50,000
100,000
150,000
200,000
250,000
300,000
FY19 FY20 FY21 FY22 FY23
Patrol Hours
City and County Patrol Hours
FY19 ‐FY23 (contract years)
City Hours County Hours
This disconnect between cost
and share of patrol hours is at
the heart of the cities’ cost-
share concern
63 #1: Cost Disconnect
RBConsulting
5 $0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
Total Cities' Cost County Cost (at City rate)
Comparison of FY19 and FY23 Contract Costs
FY19 FY23
The cities are paying
$4.1 million more for
patrol service in FY23
over FY19
The County is paying
$1.3 million more for
patrol service in FY23
over FY19
Note: City costs include escalation
and true-up costs, but do not
include contract “menu items”
64 #2: Cities Charged > Actual Cost Change
RBConsulting
6 ‐$10,000,000
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
FY19 FY20 FY21 FY22 (Rev.) FY23
Total Patrol Cost
FY19‐FY23
Total Patrol Cost Total Cost Change 5‐Year Average
Note: Does not adjust for true-ups in early years
Actual cost of patrol has
remained static over the last
five years
However, average patrol cost
increases for the contract cities
($1.0 M/year) are more than
triple the County’s patrol-cost
increase ($332,000/year)
This disconnect is due to the
County’s changing their patrol
hours from year-to-year ‐$3,000,000
‐$2,000,000
‐$1,000,000
$0
$1,000,000
$2,000,000
$3,000,000
FY20 FY21 FY22 (Rev.) FY23
Annual and Average Contract Increase
City Cost Change County Cost Change
Average City Increase Average County Increase
65 #3: Model Complexity
•Download Actual Pay Detail for Latest Year
Available
•Divide this detail into: direct, direct OH, indirect,
& excluded cost
•Download S&S for Patrol and OH programs
Actual Cost
Detail
•Load Cost/Hours data into model, divided into its
category
•Divide S&S into “billable” or “non-billable” to
cities for the Law Enforcement Program
•Apply non-billable from Law Enforcement
amount pro rata to program OH S&S
Categorize
Costs
•Adjust S&B actual costs by a factor calculated by
dividing total S&B from the ICRP – all units – by
total S&B from Pay Detail – now +5.75%
•Add on 9.5% for Countywide indirect cost
•Add on S&S costs for Law Enforcement (“Law
Enf S&S OC” tab) and programs (“DSU OH
ProgS&S OC” tab)
•Divide each cost by Total Direct Deputy Hours
(214,961.5 from FY21) to get a cost per DSU
Hour Calculate
Cost/DSU
RBConsulting
7 Below is the overall flow of the DSU model structure The model structure is
working as designed. The
primary question is the data
input into the model.
66 #3: Complexity |Pay Detail Concerns
The pay detail is the critical data that feeds into the model—this data generates the total number of patrol hours (the critical “denominator” in the DSU/hour calculation), total cost for all deputy and support/OH position hours/cost. There are concerns with the pay-detail data
RBConsulting
8 Concerns:
1. Time is allocated based on how hours are coded by employees. There appears to be no training after initial hire nor is there any evidence that promised timekeeping audits around the SBSO contracts have been performed.
2. City patrol hours are static (based on di spatch system rather than time coding); however, County patrol hours vary with time-sheet coding. This annual up or down in County time has an outsized impact on the cost to the cities.
3. There are outstanding questions on the Pa y Detail provided by the County. In addition, coding mistakes have been identified. This leaves the cities without a sense of certainty that they are being charged appropriately for services. 67 Reasons to Moderate Contract Cost Change
The contracting cities primary issue in the SBSO’s contract for services is the calculation of hours for County services
The Cities each receive 100% of their service, but there is no similar designation of targeted patrol hours for the unincorporated areas
As total patrol hours go down, any change (up or down) is assigned to the County This change has a slight impact on total Patrol cost but an outsized impact on DSU cost/hour.
This is not the intent of the City/County contract for services Attendant to that issue is the lack of formal training in timekeeping used to allocate cost to Patrol activities and a lack of timekeeping audits promised in the contract for service
RBConsulting
9 Each City’s cost increases not with an increase
in costs for their service, but due to decreases in
patrol hours provided in the County. This
disconnect between service cost and contract
cost needs to be addressed in the FY23 Contract
68 County Cost Assertions
The County analysis shows
that the cost/hour has
increased just under 3% per
year since FY19
However, as shown on the
next slide—this is not the
entire story
RBConsulting
10 Natelson Dale Group
Analysis of DSU
Cost/Hour @ 3% Inc.
Source: County PPT response 1/17/22
See Next Slide
69 Actual Cost Increase
For the FY22 contract, the County made changes in the DSU cost/hour that makes a year-to-year comparison difficult
Specifically, the inflation cost and true-up we re moved outside the DSU cost/hour calculation where they previously had been, resulting in the in flation costs being applied to both hourly rate and the true-up cost, which results in a compounds the increase RBConsulting
11 7.2%/year increase
3.9%/year increase
FY22 Increase = 20.5%
FY23 Increase = 14.8%
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
FY19 FY20 FY21 FY22 FY23
DSU Cost Per Hour
Goleta
Total/Hour Add‐On Inflation (Avg) Add‐On True‐Up
70