|Study Vs. Reality: Why Consolidated Dispatch in Scott County Won’t Save Money|
|News/Features - Feature Stories|
|Written by Jeff Ignatius|
|Wednesday, 23 November 2011 06:20|
Page 1 of 2
Leaders in the consolidation of Scott County emergency dispatch and record-keeping claim a number of benefits: that it has been and will be a good deal for taxpayers; that it has resulted in better interdepartmental communications between emergency responders; and that it will eventually reduce the amount of time between when an emergency call is made and when appropriate personnel are dispatched.
But is it, as originally advertised, saving money?
The answer to that question depends on how you look at it, but for property owners in Scott County, the bottom line is that their tax rates are higher as a direct and indirect result of the consolidation.
The Scott County overall tax-levy rate rose by 90 cents per $1,000 of valuation in Fiscal Year 2011, as the levy for emergency management rose from 5 cents to $1.05 – nearly all of which is funding consolidated emergency dispatch. Scott County dropped its levy rate outside of emergency management, and Davenport and Bettendorf have also lowered their property-tax rates, but the net financial effect of consolidation has been property-tax rates that are anywhere from 65 cents to 90 cents higher depending on where one lives.
And while administrators involved in the consolidation offer justifications for costs that grew far beyond initial estimates, it’s hard to see how the project over the long haul can meet a key projection of the study that got this ball rolling: more than $4 million in cost savings to taxpayers.
Previously, the Reader discussed problems with the roll-out of consolidated dispatching and record-management within the Scott Emergency Communications Center (SECC). (See “911 Whitewash? Leaders Say the Transition to Consolidated Emergency Dispatch in Scott County Has Gone Well. It Should Have Gone Better,” River Cities Reader Issue 791, November 10-22, 2011.)
This article explores the issue of cost, and how and why cost savings are unlikely to become reality.
Sold with Savings
A May 2006 study by CTA Communications – commissioned by the Bi-State Regional Commission at a cost of $102,000 – offered two primary benefits to consolidation.
The first was a better emergency-response system: “A shared communications center, with proper implementation, offers significant service improvements to all of the participants. ... The service level provided to all of the citizens of Scott County will be equal to or better than the highest levels provided now. The goal must be the creation of an efficient, customer-friendly organization.”
The second benefit was savings: “CTA Communications estimates that full consolidation will result in total savings in the cost of dispatch of $4,651,320 over the 20-year estimated life of the project compared to the current expenditures.”
The December 2007 intergovernmental agreement that formed the SECC reinforces that notion: “The parties believe SECC will reduce overall costs to the individual agencies by reducing management costs, reducing employment competition, providing more flexible and efficient use of staff, and provid[ing] for more efficient use of technology. ... The parties believe costs can [also] be reduced by the joint purchase of radios and equipment by SECC ... .”
It further states that “all decisions by the SECC Board of Directors, Technical Advisory Committee, and SECC Director shall be guided by the 2006 Consolidation Study [by CTA Communications] and 2007 Radio Study.”
Despite that mandate, administrators involved in the SECC are quick to dismiss the CTA Communications study as a mere guideline, and to cite all the costs that weren’t factored into its estimates: new portable radios, an emergency-management center that became part of the SECC building in Davenport, and centralized warrants. They note $6 million in grants that helped offset what grew to $28 million in capital costs.
Yet it’s important to stress that the consolidation project was sold in large part on cost savings. And when the board of Medic EMS and the elected officials of Davenport, Bettendorf, and Scott County approved the intergovernmental agreement, those savings were a critical component; two of the four articulated reasons for consolidation were cost-related.
So it is true that the scope and cost of the project ballooned beyond the consolidation recommended by CTA Communications, and therefore what was explicitly authorized in the 2007 intergovernmental agreement that gave birth to the SECC. But despite efforts to downplay the CTA study, its findings were the premise and starting point for the entire consolidation enterprise, and it remains a valuable and instructive document for evaluating the overall project costs.
At its core, the CTA report projects savings of more than $4.6 million over 20 years for the full consolidation that happened.
It actually estimated costs over 21 years, totaling $126.0 million – an average of $6 million a year. That included a first-year budget of $8.28 million, dropping to $3.98 million the second year, rising to $4.41 million the third year, and then rising roughly $200,000 a year – to a 21st-year cost of $7.94 million.
Adding in the estimated savings would mean dispatching costs of more than $130.6 million without consolidation, according to CTA. The savings represent 3.56 percent of projected costs without consolidation.
The study includes debt-service payments of $360,000 a year – totaling $7.56 million over the 21 years. It also includes capital costs of $4.43 million in the first year, and then capital costs of $295,000 each year for years three through 21 – for a total of just over $10 million.
The SECC relied on bond funding greater than that in CTA’s breakdown of annual costs – with actual bond proceeds of $10.1 million in Fiscal Year 2010 and $7.5 million in 2011 – so the study expected higher up-front costs. The SECC is spreading those costs out.
CTA also did not include the cost of new radios in its projections. (It recommended a study to look at the issue.) Those cost almost $7 million.
Still, it’s possible to illuminate whether cost savings articulated by CTA are likely to happen.
The SECC’s current fiscal-year budget is $7.19 million. That includes debt service of $665,000, and there’s an additional $915,000 for SECC equipment bonds elsewhere in the county budget. Expense-wise, this is basically the second budget year for SECC operations, and roughly $16 million has been spent.
If the SECC spends an average of $5.79 million for the next 19 years, the project would have the same 21-year cost as full consolidation as estimated by CTA. If one adds the cost of radios to the CTA estimate – which the study expected but did not include as an expense – the SECC could meet the projection with an average budget of $6.16 million for the next 19 years.
To meet the CTA estimate for costs without consolidation, the SECC would need to spend an average of $6.03 million for 19 years. Adding the cost of radios to the CTA no-consolidation estimate, the average SECC budget moving forward would need to be $6.40 million.
Put simply, SECC spending would need to be drastically reduced from its current level over an extended period of time to meet even the no-consolidation costs that CTA projected.
If, on the other hand, the current SECC spending level remains the same for the next 19 years, the SECC would spend more than $152 million over 21 years – $22 million more than the projected cost of no consolidation, and $15 million more than the no-consolidation cost plus radios.
And scaled-back or even stable spending is unlikely if the proposed $7.35-million SECC budget for Fiscal Year 2012-13 is any indication.
So if taxpayers want to see the cost benefits CTA projected, they’ll need to keep a close eye on the SECC board. The board produces a budget, which is then approved “without modification” (according to the founding intergovernmental agreement) by the Emergency Management Agency (EMA) board. The Scott County Board of Supervisors (again according to the founding intergovernmental agreement) “shall approve a countywide special levy ... to fund said budget for the next fiscal year as part of its annual budget adoption.”
This explicitly states that the EMA board has no say on the SECC budget, and it implies that supervisors’ hands are tied, as well. So keeping the SECC budget in check requires pressure on its five-member board: the chair of Scott County Board of Supervisors, the mayors of Davenport, Bettendorf, and another Scott County city (presently Eldridge), and the chair of the Medic EMS board.