|Study Vs. Reality: Why Consolidated Dispatch in Scott County Won’t Save Money - Page 2|
|Written by Jeff Ignatius|
|Wednesday, 23 November 2011 06:20|
Page 2 of 2
Explaining Higher Costs
To understand why it’s unlikely the SECC will meet CTA’s cost-saving projections, it’s useful to look at specifics.
Consider these differences between the CTA study and reality.
• CTA estimated 48 full-time equivalents (FTEs) for consolidated dispatch and administration, noting that the unconsolidated dispatching required 58.5. Excluding two warrant-clerk positions outside the scope of CTA’s study, the SECC’s current budget allows for 55.5 FTEs.
• CTA anticipated 43 FTEs for dispatchers and shift supervisors alone. The SECC’s budget allows for 48.
• First- and second-year personnel costs were estimated by CTA at $3.15 million and $3.27 million, respectively. The current SECC budget allows for $4.31 million. (That includes two warrant clerks not anticipated by CTA.) By CTA’s estimates, personnel expenses would have first exceeded $4.31 million in the 10th year post-consolidation.
• CTA said a 7,800-square-foot stand-alone facility would be adequate for emergency dispatching, administration, and equipment. It further said that an additional 1,500 to 2,000 square feet would be adequate for an emergency-operations center. And centralized warrants could be added in 750 to 800 square feet. The total square footage for all those functions comes to 10,050 to 10,600. The SECC building is 27,000 square feet.
• CTA estimated a 7,800-square-foot building could be constructed for $2.34 million. The much-larger SECC building cost $7.31 million.
• CTA said a suitable computer-aided dispatching and record-management system would cost $1.03 million. The software, chosen through a competitive-bidding process, cost $2.7 million.
These illustrate the disconnect between the CTA study and actual expenses, and they underscore why cost savings are unlikely to happen; both capital and key annual operating expenses are higher than those in the CTA study.
Administrators involved in the SECC gave several examples of how they’ve been good stewards of taxpayer money. SECC Director Brian Hitchcock noted that through a functional architectural analysis, the design of the SECC building was reduced from 36,000 square feet to 27,000. And because of the recession, bids for the building came in lower than expected. The schematic design for the building (by Wold Architects) was approved by the SECC board in February 2009, with an estimated cost of $10.8 million.
Hitchcock added that CTA underestimated space needs. He said that a consolidation he oversaw in McHenry County, Illinois, was a smaller operation and still required more than 7,000 square feet. “Whoever put that report together, did they actually do a consolidation before that?” he asked.
James Dye was project manager for the CTA Communications study and is now the vice president of AECOM (the company CTA became part of) overseeing 911-services consulting. He said last week that he didn’t recall specifics of the 2006 document but that the Iowa Quad Cities area was not his company’s first consolidation study. AECOM has now done 31 consolidation studies, he said, but the Quad Cities “probably was early in our career.”
Dye said space and cost estimates were based on previous studies and consolidations. But he acknowledged that the goal of the study was to “create a conceptual guideline.” Each component of the consolidation, he said, required additional study and refinement beyond the CTA recommendations. “We’re trying to give people a concept or an idea,” he said.
He also said that cost is something that must be addressed in a study, but it’s not the driving force; better service is the primary goal. He downplayed cost savings projected in the CTA Communications report, saying: “We may have expressed the idea of cost savings.”
Scott County Administrator Dee Bruemmer – a nonvoting member of the SECC board – said that a consolidated-dispatch center that CTA used as a model is “in an expansion. ... They’re too small.” She added that the SECC building had to “fit our needs today” but also in the future. (CTA’s estimates were based on Scott County population growth of 13.7 percent from 2000 to 2025 – and 9.1 percent from 2010 to 2025.)
Adding an emergency-management center and centralized warrants to the SECC building must also be considered. Hitchcock guessed that 40 percent of the building is primarily for non-dispatching functions, which would put the dispatching at roughly 16,000 square feet – double the size CTA recommended. (The SECC budget does not include Emergency Management Agency personnel and operations, but it does pay utilities for the entire building.)
As for personnel, the SECC is obviously closer to the no-consolidation staffing numbers than CTA’s.
Hitchcock said there won’t be a smaller number of dispatchers through consolidation. That’s a function of both previous under-staffing at dispatch centers – which the CTA study addresses – and increased call volume.
“Davenport was understaffed for the number of calls,” Bruemmer said. “This is balancing it out. The other thing is you’re going to have dispatchers not needing a lot of overtime hours and holdovers. So you’re going to get optimum personnel usage.”
“The numbers are probably the same,” said Bettendorf City Administrator Decker Ploehn, also a nonvoting member of the SECC board. “Our ability to sustain that number [without having to add dispatching positions] for a longer period of time is happening with this.”
“We’ll be able to answer more calls and cover more territory with better situational awareness than we ever would be able to separately,” said Davenport City Administrator Craig Malin, another nonvoting member of the SECC board.
Bruemmer added that the pay scale is lower for dispatchers under Scott County than it was under the cities. “That ... benefits the taxpayer,” she said.
Benefits to Taxpayers? Or Benefits to Cities?
The argument that consolidated dispatch “benefits the taxpayer” in a broad sense is largely intuitive.
“I can’t conceive how four stand-alone operations could potentially be as efficient over the long haul as a centralized operation,” Malin said. “That’s a standard business strategy to consolidate your expenses and optimize all your resources. That’s what’s going on here. I cannot conceive that over 10 years or 20 years that this will cost more money. It’s unfathomable.”
Bruemmer added: “The operation, clearly.”
That’s an important distinction. On a personnel and efficiency level, it’s certainly possible – likely, even – that SECC will fare better than the previous situation of four separate dispatching centers and staffs. But the capital costs also have to be figured in.
When asked about the CTA estimate of $4.6 million in savings over 20 years, Bruemmer said, “I don’t think we’ve recomputed that number. ... That study was a guideline, and it did steer us to the 28E [intergovernmental agreement] and the consolidation.”
Ploehn and Malin noted that after moving dispatching expenses out of the their municipal budgets, their cities lowered their property-tax rates – Bettendorf by 25 cents, Davenport by 5 cents – and used the remainder of savings for new services and capital projects. (Those were discussed in the previous article.)
In other words, rather than passing the entirety of dispatching savings to taxpayers through a lower property-tax rate, Bettendorf and Davenport have increased spending in other areas. Ploehn said that if his city hadn’t shifted 50 additional cents of its property-tax rate to debt service for new capital projects, it could have lowered its property-tax rate by 75 cents.
But lower municipal property-tax rates must be considered in concert with the county’s property-tax rate, which was 90 cents higher in Fiscal Year 2011 than in 2010 – all attributable to a $1 increase in the special emergency-management tax-levy rate. Even if Bettendorf, for example, had used its entire dispatching savings for property-tax relief, residents would still be paying 15 cents more per $1,000 of assessed valuation.
So in the most basic sense, consolidated dispatch hasn’t paid any short-term financial dividends to taxpayers. And again: Unless the SECC budget is significantly reduced, there will be no financial dividends to taxpayers.
Cities, however, are another matter.
And here it helps to return to the CTA study, which articulates the funding mechanism for SECC and a crucial appeal: It lets cities shift dispatching expenses to the county, which can then fund them through a special tax levy that’s not subject to caps. So while cities and school districts, for instance, are limited in what they can spend by caps on property taxes, the SECC has no such constraint.
“The Iowa Legislature severely impacted the ability of cities, such as Davenport, to raise revenue through taxes,” the study explains. “It set a cap of $8.10 per $1,000 of assessed valuation and rolled back the assessed value to be a greatly reduced percentage of the actual value of residence.”
As a solution, the study offers this: “The County Board of Supervisors has the ability to create a ‘Local Emergency Management Fund’ and fund it through a special levy. That levy is not subject to any of the caps on taxes. The local emergency-management fund could be used to fund the costs of the consolidated dispatch if the dispatch were part of the Emergency Management Agency.”
This might help explain why cost savings aren’t being realized, and how the project grew beyond its initial scope. CTA said there was money to be saved, but that’s unlikely to happen when consolidation is designed, in part, to help cities circumvent property-tax caps.
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