June 29 (Bloomberg) -- San Carlos, a Silicon Valley suburb that calls itself the City of Good Living, will hire contractors to maintain parks and negotiate with county officials to take over policing, becoming the latest California community eliminating basic services to close budget deficits.
Measures passed by the City Council last night may save the community of 28,000 residents about $2.5 million a year, according to Mayor Randy Royce. San Carlos faces a $3.5 million deficit for the fiscal year that begins July 1, on a budget of $25.8 million.
About 70 percent of U.S. municipalities are cutting jobs to cope with declining tax revenue, according to a survey published last month by the National League of Cities in Washington. One in five communities cut public-safety spending and revised union contracts, and almost one-quarter reduced health care.
San Carlos’s council voted 4-1 to pursue discussions with the San Mateo County Sheriff’s Department on taking over the 32-member police force for the city located 24 miles (39 kilometers) south of San Francisco, according to Royce.
Taking over policing may produce annual savings of $2 million, he said. Council members also chose to replace seven parks department jobs by hiring companies to cut grass and clean restrooms. That will save $500,000 a year, according to the San Carlos website.
“It is a growing trend,” said Frank Benest, a former city manager in nearby Palo Alto, California, who’s now a consultant to local governments. “Cities and counties are looking for ways of delivering services at a lower cost. A lot of the easy cuts have already been made.”
Eight miles south of Los Angeles, the City Council in Maywood voted on June 21 to seek outside providers for all services after being unable to pay for worker’s compensation and other insurance, according to Magdalena Prado, director of community relations for the municipality.
The city may lose general liability coverage, Standard & Poor’s said on June 25 as it put the Maywood Public Financing Authority on watch for a possible downgrade.
Maywood already relies on contractors for street sweeping and sanitation, Prado said. The neighboring community of Bell likely will provide code enforcement and parking-meter reading and ticketing, she said. Los Angeles County will take over police services.
“We’ve had cities all around the country ask about what we’re doing,” Prado said in a telephone interview. “We’re at the cusp of this.”
San Carlos’s median annual household income is $88,460, according to the city’s website, 45 percent above the California average. The municipality has cut its police budget, trimming personnel from 38 officers, hired a neighboring city to provide emergency-dispatch services and curbed retiree benefits, according to a report for the city manager.
Replacing the police department is opposed by the city’s police union, which plans to seek voter approval in November to block the move, said Gil Granado, president of the San Carlos Police Officers Association.
City police officers have offered to accept reduced pay and benefits, Granado said in a telephone interview. He said the consultant San Carlos hired to study the issue was biased in favor of replacing officers with county deputies because he works for the Los Angeles County sheriff’s department.
“It’s not the police that’s not doing its job, it’s the city manager,” Granado said.
The consultant did an independent assessment and using county deputies for local policing has been successful in Southern California, said Mark Weiss, the city manager.
“If you look at our budget, we need to find a model that works,” he said.
‘Trying to Negotiate’
Royce, a retired Hewlett-Packard Co. finance executive, also said the consultant had an independent viewpoint and that the police have sought salary increases, not cuts.
“We’ve been trying to negotiate with them for two years,” Royce said.
The city has consolidated services with neighboring communities in the past and not always with success, according to Weiss. San Carlos shares a fire department with neighboring Belmont in a partnership it plans to dissolve. Earlier this year, the city notified Belmont officials that it would seek other alternatives, including setting up a department with a larger group of communities.
The joint fire department’s expenses have risen 30 percent in the past five years, Weiss said. Because of a formula that apportions costs based on such figures as population and real-estate values, San Carlos must pay a larger share. He said the fire department’s board makeup of two members from each city has made it indecisive.
“Everything is on the table for local governments right now as they try to balance their budgets,” Christopher Hoene, director of research at the National League of Cities said in a telephone interview. “That means sharing services with another city or finding an alternative provider.”
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