SPECIAL REPORT: Combining cop shops can save big bucks

By Melissa Preddy

Oakland County Undersheriff Michael McCabe recently added four more folders to a drawer full of ‘contracted policing’ inquiries.

Each new file represents a cash-strapped Oakland County city or township that’s contacted McCabe to talk about hiring the sheriff’s office to do its community police work. Currently, his department provides contracted services for 14 municipalities, from burgeoning Rochester Hills to tiny Royal Oak Township.

“It’s the nature of the beast right now,” said McCabe, a 30-plus year veteran. “We’ve had a lot more inquiries lately than in the past.”

As Michigan’s fiscal crisis continues to ripple out to municipalities, with no end in sight to shrinking revenue-sharing, a gridlocked real estate market and other economic woes, more local governments statewide are faced with tough choices when it comes to funding essential public services.

Over the past 10 years, local income from state revenue sharing has plunged by $4 billion, said Tony Minghine, associate executive director for the Michigan Municipal League. In mid-2009, the league reported that the shortfall had cost the state some 2,400 police officer jobs, along with 1,800 fire fighters.
And with public safety costs making up half or more of many municipal budgets, the cost-benefit analysis increasingly is directed toward police departments. While there’s not been a huge upsurge in police outsourcing since the recession, government and law enforcement leaders say interest is growing.

“We’re underfunded by $500 million this year alone,” compared to past levels of revenue sharing, Minghine said. “These are staggering amounts. Everyone is hurting and communities are looking at things they hadn’t before.”

The Mount Clemens Experience

Contracted policing is not a new phenomenon in Michigan; observers say it’s been fairly common for decades in more rural counties where low population density provides little impetus – or funding – for local governments to form their own police departments.

Less prevalent, but not unheard of, is when troubled cities and townships actually disband an existing public safety department and farm out the duties to their county sheriffs. Mount Clemens, which five years ago eliminated its 24-person police department in favor of outsourcing, is among the most recent and dramatic examples.

No state entity, professional organization, union or other group tracks contracted policing activity in Michigan, so it’s unclear how many other agencies have been shuttered and how many sheriffs’ departments are providing local service in addition to county-level enforcement. The lack of data also makes it difficult to compare cost savings with service levels, any effect on crime rates and other quality metrics.

Anecdotally, however, the outsourcing trend is anticipated to grow. Prompted in part by that expectation, the Michigan Sheriffs Association this month e-mailed a survey to its 83 members, requesting, for the first time, statistics about the number of existing policing contracts in 2009 compared to 2005.

Terry Jungel, executive director of the sheriffs’ association, said much of the impetus for the survey is economic.

Currently, when being considered for financial grants from the U.S. Department of Justice, sheriffs aren’t allowed to include in their workload any policing they do within cities, townships and other local jurisdictions – even if they’re under contract. They only get credit for law enforcement activity in unincorporated areas, and the result, Jungel said, is that only one of Michigan’s 83 sheriffs was eligible for a federal Community Oriented Policing grant in 2009.

With interest in outsourcing on the upswing, Jungel wants to get an accurate picture of just how much workload deputies are taking on within municipal boundaries.

“According to the preliminary data, I see that a lot of communities are looking at their options,” Jungel said. “We see quite a bit of interest, though not yet an uptick in actual contracts.”

Controlling Costs

Proponents say outsourced policing works well.

McCabe says Oakland County, for example, can pare 15 percent to 20 percent of a municipality’s policing costs through economies of scale.

“And that’s at a break-even level for us,” McCabe said. “We aren’t in the business of contracted policing to make money. They save because they don’t have to maintain a records bureau, car operations, administrative staff and other overhead.”

Another factor behind the savings: “Our legacy costs aren’t as great,” McCabe said. “Our costs have been driven down compared to some of the older suburbs who are tied to contracts that are killing them.”

For example, he said, deputies in Oakland County pay a share of their own health insurance premiums and participate in a defined contribution retirement plan – one where workers contribute pre-tax money, like a 401(k) – compared to communities that are still funding traditional pensions and retiree health care.

Those were pressures facing Mount Clemens officials in 2005 when their labor agreements with the local police force were expiring. They sought a competitive bid, and now city officials credit their outsourcing contract with the Macomb County Sheriff’s Office with saving the city from fiscal collapse.

The $2.5-million-a-year contract with the sheriff calls for four deputies per shift to patrol the 4.2 square mile county seat, replacing the city’s former 26-person police department.

“The cost savings is $1 million a year,” said Mount Clemens City Manager Doug Anderson. “The city was going broke, (and) the police couldn’t match those savings. We would have been in receivership within six months if we hadn’t done this.”

With the sheriff’s headquarters located within Mount Clemens, Anderson said, the move to reduce redundancies made plenty of sense. Twenty-four of the Mount Clemens police staff were absorbed into the sheriff’s office, though most had to start out in lower-wage positions at the county jail. And the city was able to shutter its police offices, car operations and other costly overhead.

Built into the four-page contract with Macomb County is a 4 percent cap on increases, contingent on labor pacts negotiated between the sheriff’s office and its unions.

Anderson and Mount Clemens Treasurer Marilyn Dluge have nothing but praise for the contract, which they say has maintained public safety service levels while easing the cash-strapped city’s current budget and moving pension obligations, liability and insurance costs and other overhead to the sheriff’s office.

“It’s a huge benefit,” said Dluge, who now is pondering ways to consolidate the city’s $1.6 million-a-year fire department with a nearby community such as Clinton Township. “We need to do things like this statewide,” she said.

“Otherwise,” added Anderson, “there is going to be a long line of people in Lansing handing over the keys to their cities and saying ‘good luck.’”

A Loss of Control?

Some critics of outsourced policing fear that larger, more impersonal departments aren’t able to provide community policing that reflects the character and tenor of a given city or township, and that members of a large force won’t get to know residents the way a local cop might.

Capt. Tony Wickersham, chief of staff for the Macomb County Sheriff’s Office, said that his 187 deputies bid for shifts at the start of each year and the Mount Clemens substation is staffed for the most part by the same deputies year-round. “We have stability out there,” he said.

Kim Lubinski, who manages Big G’s Party Store in downtown Mount Clemens, says there is no question the outsourcing was necessary, economically. But she has mixed feelings about the results.

“When the changeover first happened, I was managing a Coney Island and called 911 on some rowdy teens,” she said. “I had six sheriffs cars here in three minutes. That never would’ve happened with Mount Clemens police – their attitude was ‘we’ll get to you when we get to you.’”

However, Lubinski says, despite the increased professionalism, she does feel that the sheriff’s deputies are more impersonal and often more harsh than necessary when dealing with non-violent crime, such as disturbances during community festivals.

“There are definitely pros and cons to the whole thing,” she said. “And now we really don’t have any options. They’ve got us by the throat.”

Cheboygan Plan Nixed

Sometimes residents have swayed officials against outsourcing.

Last year, council members in the city of Cheboygan approached their county sheriff to request a bid for replacing the then-eight-person force, which was costing the city about $900,000 a year.

A council task force recommended proceeding, but the county eventually withdrew from contention, said City Manager Scott McNeil. A double-digit hike to health insurance costs and other variables made it difficult for both parties to commit to a long-term agreement.

“There would have been some savings, but it was all about duplicative administration,” he said. “And it didn’t give us the 24-7, two-person coverage we had been trying to deliver all these years.”

Meanwhile, public sentiment was strongly against the move.

“The overwhelming commentary I heard at meetings was ‘Don’t take away our police department’ and ‘we don’t want to lose control,’” McNeil said. “That intangible as much as anything affected the outcome.”

Cheboygan opted instead to continue operating its own force within a reduced budget; the $750,000 now allocated to police allows for six officers instead of eight. “The department now has to make tougher prioritizing decisions about what cases to take,” McNeil said.

Paying their Fair Share

Proponents of contracted policing say sheriffs and counties are increasingly put on the spot when it comes to prioritizing – and funding — safety needs because some growing communities have simply failed to address public safety at all.

“Thirteen townships in Ingham County don’t have any police departments or contracts, and they just mooch off of everyone else,” said Mark Grebner, a longtime Ingham County commissioner and a political consultant in Lansing. He points out that nothing in current state law requires a municipality to organize public safety and that the failure of some to do so, while others voluntarily pay for contracted services, creates an unfair disparity.

“Some counties subsidize their contracts. In Ingham County, we pay part out of the general fund because we are so pleased we aren’t stuck with the entire thing,” Grebner said.

Hendrickson agreed. “You’ll get townships that are as populous as some cities, who expect the same service without paying for it.”

Sheriff response in areas without contracts tends to be limited to life-or-death emergencies, Jungel said.

“The sheriff is going to provide service one way or the other,” he said. The question is, to what degree? Without a contract, it’s strictly triage. A breaking-and-entering is just not a priority.

“When communities grow, it’s up to the sheriff to say ‘this has gone beyond what I can provide at even a basic level,’ and initiate discussion about the options.”

Considering Consolidation

Minghine of the Michigan Municipal League says such issues of local control, community character and other intangibles make consolidation of services – as when adjacent governments join their police, fire or dispatch departments – a more palatable option.

“Consolidation is the issue of the day,” said Minghine. “Everyone is establishing how they can do things more cost effectively, without changing the essential character of their town. Every community has a different feel, a different philosophy about service levels. You don’t want to change those dynamics unless you absolutely have to.”

Tom Hendrickson, executive director of the Michigan Association of Chiefs of Police, said he hears more about consolidation than about abolishing entire departments. And it’s becoming more common for municipalities to request competitive bids from sheriffs when labor negotiations loom, he said.

“Normally when a government entity collapses, they’ll contract with the sheriff for a lesser amount of money,” he said. “But people have to remember that when they do that, the sheriff now is the sole source in the future. There is no one to get into a bidding war with. And once a police force is disbanded, it’s extremely expensive to replace.”

Both Hendrickson and Minghine point out that there are less drastic ways to achieve economies of scale, and that many indeed are common throughout Michigan, such as joint task forces on narcotics, auto theft and other issues that cross many jurisdictional boundaries.

“You might have a deputy, a DEA agent and officers from various cities already cooperating,” said Hendrickson. “At the local level, the police chiefs and various other officers frequently meet formally and informally.”

Whatever model a community chooses, all of the observers worry about the extra pressure on public safety funding as declining real estate values erode property tax revenue in Michigan, even as jobless and fearful residents give thumbs down to public safety millages and other stopgap measures.

“We’ve already had cutbacks in some of our contracted municipalities,” said Oakland County’s McCabe. “We’re down from 254 deputies in 2009 to 244 this year.”

“We’re all frightened of what next year is going to bring with the state budget and the ‘no new taxes’ sentiment of voters,” added Hendrickson. “That double whammy is coming.”