RPVCCA_CC_SR_2014_05_20_05_Modification_To_Sheriff's_ContractMEMORANDUM RANCHO PALOS VERDES
TO:
FROM:
DATE:
SUBJECT:
HONORABLE MAYOR AND CITY COUNCIL
CAROLYNN PETRU, ACTING CITY MANAGE@
MAY 20, 2014
PROPOSED MODIFICATIONS TO THE SHERIFF'S REGIONAL
CONTRACT FORMULA
RECOMMENDATION
Approve a modification to the current Sheriff's Regional Contract Formula to use a
"smoothed" fixed formula, contingent on the other regional contract cities adopting the
same formula, beginning in FY14-15.
INTRODUCTION
In May 2013, the Regional Law Enforcement Committee (RLEC) discussed the
possibility of changing the contract formula that is currently being used to calculate the
cost sharing of Sheriff's services among the three regional cities. The discussion
centered on the concept of moving from a formula which is based on a combination of
fixed and variable factors to a fixed percentage-only formula. Staff was directed to
bring the issue back for further consideration in 2014, prior to the beginning of the next
fiscal year. Accordingly, the RLEC considered this issue at its May 8, 2014 meeting
and unanimously agreed to recommend that each city's respective City Councils
approve the use of a "smoothed" fixed formula beginning in FY14-15. The Council's
delegates to the RLEC are Councilwoman Brooks (who is the current Committee Chair)
and Councilman Misetich.
BACKGROUND
Each year, the costs associated with the Sheriff's contract are based on two factors: 1)
the Regional Service Level Authorization; and, 2) a Deployment Survey.
The Regional Service Level Authorization is the total number of full-time equivalent
sworn personnel serving the region. It includes regular patrol units, traffic units,
surveillance units and special assignment units. The regional cities can determine the
staffing levels from year to year. For example, in FY0?-08, the number of regional
traffic deputies was increased from two to three, while in FY09-10 the number of CORE
Deputies was decreased from three to two.
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Topic: Proposed Modifications to the Sheriff's Regional Contract Formula
Date: May 20, 2014
Page2
A Deployment Survey is approved annually by each regional city which distributes
contracted personnel and their associated costs among the three cities based on a
combination of fixed and variable formulas.
Fixed Formula Costs
The cost of the two CORE Team deputies and three regional traffic deputies is currently
divided among Rancho Palos Verdes, Rolling Hills Estates and Rolling Hills on a fixed
60%/30%/10% basis, respectively.
Variable Formula Costs
The cost 9f the 12.8 regular patrol deputies and two Surveillance and Apprehension
Team (SAT) deputies are determined using variable formulas. The formula for the
regular patrol deputies is based on the following statistical measures of activity from the
prior calendar year: reported incidents, cases handled, traffic accidents, and patrol time.
Depending on the level of activity in each city over the previous fiscal year, and the level
of deployment (i.e. the hours of service allocated to each of the three regional contract
cities), the associated costs can shift slightly between the cities.
Similarly, the two SAT deputies are allocated to each city based on a formula that
reflects the number of burglary cases in each respective community during the prior
calendar year.
DISCUSSION
While the fixed formula items only change from year-to-year based on changes in the
Regional Service Level Authorization initiated by the regional cities and/or contract rate
increases imposed by the County, the variable formula items experience more volatility.
These annual shifts have either a positive or negative impact on the cost of the annual
contract for each city, making budget forecasting more difficult.
To assist in the analysis, the Sheriff's Department compiled information on contract
costs over the last 10 years (see attached chart).
As indicated on the chart, the average cost for general law enforcement services (not
including contributions to the Liability Trust Fund) and the corresponding average
percentage for each city during the last 5 years (FY09/10 to 13/14) is:
Rancho Palos Verdes:
Rolling Hills:
Rolling Hills Estates:
$3,999, 184.64
$234,602.57
$1,591,757.96
(68.65%)
(04.03%)
(27.32%)
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Topic: Proposed Modifications to the Sheriff's Regional Contract Formula
Date: May 20, 2014
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Staff also looked at the 10 year average for FY04/05 to FY13/14, which is:
Rancho Palos Verdes:
Rolling Hills:
Rolling Hills Estates:
$3,693, 152.43
$199,135.81
$1,518,479.60
(68.26%)
(03.68%)
(28.06%)
The Contract Law Bureau provided staff with preliminary cost estimates for the FY14-15
regional contract using the current variable formula. The total amount for the region is
$6,373,914, which includes $6, 128,763 for general law enforcement services and
$245, 151 for the 4% contribution to the Liability Trust Fund.
The preliminary estimated general law enforcement contract costs for FY 2014-15 (not
including the 4% contribution to the Liability Trust Fund) are:
Rancho Palos Verdes:
Rolling Hills:
Rolling Hills Estates:
$4, 107,299.89
$298, 130.51
$1,723,331.77
(67.02%)
(04.86%)
(28.12%)
The chart below compares the cost differences between applying the current variable
formula, the 5 year average percentage and the 1 O year average percentage to the
estimated FY14-15 contract amount of $6,128,763:
COST COMPARISON FOR FY14-15
Percentage Contract LTF (4%) Total
Rancho Palos Verdes
Current Formula 67.02% $4,107,300 $164,292 $4,271,592
5 Year Average 68.65% $4,207,396 $168,296 $4,375,692
1 O Year Average 68.26% $4, 183,494 $167,340 $4,350,834
Rolling Hills
Current Formula 04.86% $298,131 $11,925 $310,056
5 Year Averaoe 04.03% $246,989 $9,880 $256,869
10 Year Averaoe 03.68% $225,538 $9,022 $234,560
Rolling Hills Estates
Current Formula 28.12% $1,723,332 $68,933 $1,792,265
5 Year AveraQe 27.32% $1,674,378 $66,975 $1,741,353
10 Year Average 28.06% $1,719,731 $68,789 $1,788,520
Applying either the 5 year or the 10 year average will impact Rancho Palos Verdes the
most, while Rolling Hills would derive the most benefit from using the 10 year average
and Rolling Hills Estates would get more benefit from the 5 year average. Rather than
using a 5 or 10 year average, the Committee may wish to consider a "smoothed"
percentage allocation, such as 68% for RPV, 4% for Rolling Hills and 28% for Rolling
Hills Estates. The chart below shows the impact the suggested "smoothed" fixed
formula would have for FY14-15:
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Topic: Proposed Modifications to the Sheriff's Regional Contract Formula
Date: May 20, 2014
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"SMOOTHED" FIXED FORMULA FOR FY14-15
Percentage Contract LTF (4%)
Rancho Palos Verdes 68% $4,167,559 $166,702
Rolling Hills 4% $245,151 $9,806
Rolling Hills Estates 28% $1,716,054 $68,642
100% $6,128,763 $245,151
Total
$4,334,261
$254,957
$1,784,696
$6,373,914
By moving from a variable formula to a "smoothed" fixed formula allocation, Rancho
Palos Verdes would pay more than what the current variable formula would call for in
FY14-15, but less than either the 5 or 10 year average. In the long term, the certainty
that Rancho Palos Verdes would gain from a fixed formula is advantageous, and also
closely reflects the city's actual use of Sheriff's services over the last decade. Rolling
Hills would pay less in FY14-15 than itwould under the current variable formula, and
just under the 5 year average. Therefore, it would receive an immediate break for
FY14-15, ·and certainty for the future. Rolling Hills Estates would pay just about the
same as the current variable formula and the 10 year average in FY14-15 and beyond,
resulting in the least amount of change among the three cities and providing certainty
for the future.
CONCLUSION
Given the analysis of the actual and average costs over for the last ten years, the RLEC
concluded that moving to a fixed formula would be beneficial. In addition, the RLEC
decided that the "smoothed" fixed formula was fair and reasonable, and would provide
greater certainty in predicting and budgeting for Sheriff's services from year to year.
The Committee unanimously approved a motion to recommend this alternative to each
city's respective City Councils.
ALTERNATIVE
The alternative to the RLEC's recommendation is to not adopt the "smoothed" fixed
formula. It should be noted that, if any one of the three City Councils do not adopt the
"smoothed" fixed formula, the Lomita Station will continue to use the current
combination of fixed and variable formulas to divide the annual cost of law enforcement
services among the three regional cities.
ADDITIONAL INFORMATION
Based on the latest claims data, the County Board of Supervisors is expected to
increase the contributions for contract cities to the Liability Trust Fund starting next
fiscal year. The current rate of 4% is expected to be increased to 5% on January 1,
2015, and then be increased to 6% on either July 1, 2015 or January 1, 2016. This
information has been incorporated into the draft FY14-15 budget and the draft Five-
Year Model. Council may recall that the contribution rate was 6% prior to FY10-11.
Attachment: Chart of actual Sheriff's contract costs over 10 years & last 5 year average.
5-4
Rolling Hills $ 154,218.27 $ 136,627.41 $ 155,113.31 $ 178,532.50 $ 193,853.78 $ 230,395.59 $ 203,571.05 $ 207,605.34 $ 238,680.65 I s
Rolling Hills Estates $ 1,286,275.74 $ 1,289,054.45 $ 1,517,902.69 $ 1,503,440.26 $ 1,629,332.77 $ 1,508,505.00 $ 1,606,244.95 $ 1,532,508.04 s 1,624,962.10 I s
TOTAL $ 4,237,185.10 $ 4,499,377.87 $ 5,058,854.94 $ 5,444,335.80 $ 5,740,198.57 $ 5,708,914.68 s 5,810,539.50 I s 5,754,489.28 I s 5,857,421.25
Rane o Pa os Ver es 66.00% 68.31 0 66.93% 69.11% 68.24% 69.54% 68.85% 69.76% 68.18%
Rolling Hills 3.64% 3.04% 3.07% 3.28% 3.38% 4.04% 3.50% 3.61% 4.07%
Rolling Hills Estates 30.36% 28.65% 30.00% 27.61%1 28.38%1 26.42%1 27.64%1 26.63%1 27.74%
TOTAL 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
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