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Privatization of Police Dispatching, Ambulance Services Being Considered

Lawrence Township plans to solicit competitive bids to determine if police dispatching and emergency medical services should be privatized, but any savings, under state law, can't be applied to cutting the $750,000 municipal tax levy cap overage fo

Lawrence Township Council Tuesday evening (Sept. 4) directed Township Manager Richard Krawczun to solicit competitive bids from vendors in an effort to determine if the township could save money by laying off its civilian police dispatchers and emergency medical technicians and, in their place, privatize the township’s police dispatching and ambulance services.

The directive comes as council tries to figure out how to solve the problem of the 2013 municipal budget being – using projected numbers – significantly in excess of the state’s 2 percent tax levy cap. That overage was initially estimated at being about $1 million, but the means that council now needs to cut “only” about $750,000 from the 2013 budget in order to comply with the cap law.

Until bids are submitted by vendors, it will not be known how much money, if any, the township could save by privatizing the police dispatching and ambulance services. But in terms of the tax levy cap, it doesn’t really matter.

Under the confusing and seemingly-contradictory provisions of the tax cap law, any savings the township could generate by privatizing those services could not be applied toward lowering the 2013 municipal tax cap overage.

Any savings would be beneficial – from a strictly financial standpoint – to taxpayers because that amount would reduce the overall total that would be raised through municipal taxation, but in terms of the cap overage the township would still need to make other budget cuts equal to the estimated $750,000 overage, Krawczun said as he tried to explain the complex situation to council members and the public.

[The discussion begins at about the 18:20 mark of meeting Audio Part 3 in the media box above.]

“Under the municipal cap law, when a municipality transfers a service, and that transfer can either be to another municipality or to a contractor and there is – and this is my term – a ‘thread’ that connects the municipality and the vendor to provide that service, there is, for the purposes of calculating the tax levy, a cap base decrease,” he said.

“Why is that significant? Because we know that in the I presented to council that we had, generally, a $1 million overage on the 2013 cap, on the levy, based on our estimates....” he continued. “With the transfer of the police officers that were at least scheduled to be employed by Lawrence Township into 2013, in round numbers, we reduced the $1 million shortfall, or overage, to somewhere between $700,000 and $750,000.

“So if you have $700,000 as your starting point, if you were to privatize ambulance service, you still have a $700,000 problem because the deduct comes off the base. You don’t get the benefit of finding an efficiency because there’s no credit given to you for reducing this excess by finding another way to provide the service,” Krawczun explained. “So I want to caution everyone that though it may be a good idea to privatize the service, or to look to an outside vendor to provide that service, it doesn’t solve the $750,000 problem. It just maintains it at the same level, or $700,000 depending how we work some of these numbers.”

Krawczun said the projected expenses for running the township’s fulltime ambulance service this year total about $1,028,000. The township, using a third-party service, bills the insurance companies of ambulance patients. The amount generated by that billing varies annually, he noted, but in 2011 the township collected $691,000 in revenue through ambulance billing.

Applying that same amount as anticipated income to the projected 2012 expenses results in an estimate that the ambulance service will end up costing the township about $337,000 this year, he said.

Lawrence Township previously used Capital Health System to provide ambulance service, after the township’s volunteer first aid squad could no longer muster enough volunteers to respond to emergency calls. The township did not renew the contract with Capital Health System and created its own fulltime ambulance service because, in part, many residents complained that they were being billed by Capital Health System the balance of what their respective insurance companies did not pay.

Currently, Lawrence Township residents are not “balance billed” by the township’s fulltime ambulance service; the township only bills insurance companies and accepts whatever payment those insurance companies submit. 

“I brought up the EMTs: one, because it’s a service that’s eligible to be privatized; two, it demonstrates the difficulty of managing the cap,” he said. “Even though you may make reductions – and this is my term – there’s a ‘disincentive’ for some because you’re not going to create any room in your cap for other costs.”

At that point in the meeting, Councilman Greg Puliti asked: “I just want to make sure I get this straight. If we were to privatize this with a service that could provide the exact same service without missing a beat, and that’s what the state’s telling us to do, we don’t get the benefit of what we would spend on that to go towards the cap?”

“That’s correct,” Krawczun answered.

“So state wants us to be leaner and meaner, find ways to do things smarter…but we’re also going to have to go someplace else and cut because of the way they figured out how we do the cap adjustment,” Puliti said, obviously frustrated.

More than a dozen municipal positions were eliminated last month, many through layoffs, to help balance this year’s budget. At the Krawczun advised that two possible solutions to the 2013 municipal tax cap overage would be additional layoffs of township employees in January, or the complete elimination of municipal government involvement in garbage collection in favor of a system whereby residents would be responsible for securing their own individual trash haulers.

Krawczun then proceeded to advise council that there had been no success in into a single regional dispatching service.

He went on to inform council that he had sought out and received permission from the state’s Division of Local Government to “use a provision in the local public contracts law known as competitive contracting. Competitive contracting is used in lieu of public bidding, although it appears to function in the same fashion.  The difference is in public bidding you have to take the lowest responsible bidder. When you use competitive contracting you can create criteria that a vendor is judged upon and cost does not have to be the sole reason of choice. So you could actually use a vendor who may cost a little more but has all the equipment, experience and resources to provide you the service versus somebody coming in, ‘We have five walkie-talkies and we can do this for $50,000.’”

But, just as with privatizing ambulance service, any savings that could result from privatizing police dispatch could not be applied toward lowering the cap overage.

“Once again, because we create the contract, there is a thread between the town and the vendor. That thread causes us, if there is any savings, to reduce the cap base by the amount of those savings. So it wouldn’t necessarily preclude us from using this or exploring the possibility, but I don’t want to lead anyone down the road to think, well, if we cut these services and we save, you know, $400,000, that that $400,000 is a solution toward part of the overage on the municipal cap,” he said. “There still needs to be other action to reduce that overage of $700,000 to $750,000.”

Krawczun went on to reiterate that the clock is ticking with regard to making certain decisions about the 2013 budget.

“You’ve heard me say if we have to make any personnel changes that they would need to be in effect by the first few days of January.  That being said, I would like to, if there’s consensus among the council, bring forward for the police dispatching a resolution to use competitive contracting,” he said. “I can use competitive contracting for the ambulance service because that was once-before authorized by council. Once the service has been authorized, you can continue to use the original authorization.  Any new service that is eligible for competitive contracting, or that you receive permission for, needs a new resolution of the governing body.”

Such a resolution could be adopted at the next council meeting on Sept. 18, he said.

“That would allow us to proceed on parallel tracks. We could still work with the employees. We could go out for competitive contracts and see what the savings are. And then we would, basically, put the employees on notice at some point that they may be terminated,” Krawczun continued. “Now under competitive contracting, since the employees are represented through a collective bargaining agreement, they have two choices. They can participate as a vendor, if they wanted to create and become a vendor, or they can offer wage concessions or salary concessions that would generate the amount of savings that would otherwise be produced under privatization or competitive contract situation.

“So that’s why I wanted to give the employees notice upfront that this was occurring because they have the right, both statutorily and, I think, you know, we have a right to our employees to put them on equal footing with everybody else. I think we have that obligation,” he said.

Earlier in the meeting, Krawczun noted that he had been meeting with the various unions that represent municipal employees. While he had nothing definitive to report, he reported that the unions were receptive to having further discussions about possible labor contract concessions to help solve the township’s budget woes and save jobs.

He also reported that the township and the bargaining unit for township police officers had just agreed to scheduling changes that should reduce police overtime expenses.

The township and the police officers’ union are currently in negotiations for a new labor agreement.

Officer Andrew Lee, president of Lawrence Township Fraternal Order of Police Lodge 209, appeared at the meeting and told council that members of the police union know that times are “tough” for taxpayers and that they are willing to make concessions. In response to some complaints from residents about public safety accounting for 33 percent of appropriations in this year’s municipal budget, Lee pointed out that the police department is a 24-hour service that, unlike other municipal departments, is never closed for business.

He also said it is important to keep in mind that beginning Jan. 1, 2013, township police officers will be subject to the state’s new “matrix” that forces government employees to pay significantly more toward their health care premiums – starting at 8 percent in 2013, and then going up annually over the next three years to 18, 24 and 30 percent.

“That’s a concession,” Lee said.

“So we have this $750,000 gap?” Puliti said as Tuesday’s meeting drew to a close. “I get it about the trash and having that privatized. I don’t want to write a check. I don’t want seniors to write a check.  I get that we don’t want any more police officers laid off.  But nobody be disillusioned – we’ve got to have some kind of compromise here to fix this… We need to figure this out.”

 

For Municipal Budget Background, See:

  • Aug. 29: “”
  • Aug. 27: “”
  • Aug. 23: “”
  • Aug. 23: “”
  • Aug. 20: “”
  • Aug. 2: “”
  • July 20: “”
  • July 18: “”
  • June 21: “”
  • June 11: “”
  • May 24: ""
  • May 24: ""
  • May 18: “”
  • May 16: “”
  • May 14: “”
  • May 2: “”
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  • April 25: “”
  • April 20: “”
  • April 20: “”
  • April 18: ""
  • April 16: “”
  • April 16: “”
  • April 13: “”
  • April 12: “”
  • April 11: “”
  • April 10: ""
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  • March 28: “”
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  • March 20: “”
  • March 14: “”
  • March 8: “”
  • Feb. 23: “”
  • Feb. 9: “”
  • Jan. 18: “”

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Richie Davis September 07, 2012 at 10:37 AM
Whether the employees are laid off so that the service can be privatized or the employees are laid off to cut staffing numbers, the employee is laid off. How could the saving account towards the 2% tax cap for a layoff in one circumstance but not the other? I am a resident who is 100% in favor of privatizing the ambulance and dispatch services. Lets get it done. The union president is quite silly to think paying for medial benefits is a concession. His comments are juvenile.
Michael Ratcliffe (Editor) September 07, 2012 at 11:00 AM
The police union does not represent the civilian police dispatchers. The dispatchers are part of a different union. I apologize if this was unclear in the story.
Plant it September 07, 2012 at 11:48 AM
What about these potential cost cutters: Semi annual brush collection instead of the monthly service. Fine people with piles in the street all the time, isn't there an ordinance on that? Do we really need the streets swept? Cut the grass at all township properties every other week. Offer an incentive to attract township taxpayers to volunteer (fire or ems.) Don't just talk to the unions work something out with them. How much would a 1% salary concession from every Lawrence twp employee save us? Are there any plans to pave roads that don't really need to paved in 2013? Is there any unused equipment or property the township can sell off? How much does the red light camera cost us annually? I've got more...
Blueline September 07, 2012 at 12:36 PM
"I am a resident who is 100% in favor of privatizing the ambulance and dispatch services. Lets get it done. " Remember that quote pal. When they privatize dispatch and you get inexperienced dispatchers that know nothing about the town demographics and HAVE NO ACCOUNTABILITY within the police department since they are hired by a private company. Then with the ambulance - the first time you need it or your elderly relatives do and they get whacked with a crazy bill that the private service hammers their credit for due to the fact that they hard bill and DO NOT SIMPLY ACCEPT what the insurance company pays them. Good luck pal for you as a citizen on board with this surely will be one of the first to bitch and complain when the services you expect diminish even further than they are now. Good luck, glad I don't live in the town anymore.
Tom September 07, 2012 at 01:19 PM
Brilliant. Save $25 per year in taxes and put 10 of your neighbors on the unemployment line. I actually have another word for you other than brilliant but I am too much of a gentleman to use it.
Richard September 07, 2012 at 02:09 PM
Plant it, I agree with you. At least you are contributing constructive ideas and, not just complaining. It's all about the math; all these small items add up to thousands of dollars. It's called...cutting the waste. We don't need so many brush and, leaves pick-ups....their machinery uses alot of fuel and, employee hours. I agree , the street cleaning is a waste in the suburbs. That is a service only needed in the cities. There's no reason why we can't sweep in front of our own houses and, our elderly neighbor's house. They do this everywhere else in the world. The township needs to generate more money the old fashion way with traffic tickets. I bet if they had a police block just at the corner of Denow Rd. and, Lawrenceville Penn. road they could generate about a million dollars in one year! I'm tired of the township gov't always expecting the taxpayers to fix their own inability to balance the budget. They are like spoiled children.
Concerned September 07, 2012 at 02:24 PM
I can't listen to this garbage any longer. The answer is simple, look at what we pay our employees and I don't blame the Police on this one. We pay our Construction Official over $100,000, Health Official $118,000, Public Works Director $128,000, Clerk $118,000 and the list goes on and on. There are way too many positions that should not be full time or should at least be shared services. Look at the salaries across the county with this link and look at the difference, it's not pennies we're talking, it's an enormous amount. Check this link for proof. http://www.app.com/section/DATA
Blueline September 07, 2012 at 02:37 PM
consolidate twp. departments such as health department, code enforcement, animal control, and recreation with all of the other twp.'s in the county for a county wide service. all of these departments are pretty uniform or can be streamlined into uniformity pretty easily. THESE are the easy routes that Krispy Kreme governor is looking for towns to consolidate with
SHSB September 07, 2012 at 02:39 PM
I have worked for 2 paid ambulance services, and I can tell you that you do not want them providing your EMS coverage. Many paid ambulance companies hire EMTs who have zero experience, no knowledge of your town, and put them in service to respond to 911 calls. I've lived in Central NJ for 18 years, yet when I worked for a paid ambulance service I could find myself in Elizabeth, Newark, Burlington, or anywhere in the state--areas I knew nothing about. I had to look up on a map where to find every address I was dispatched to. Not what you want when seconds count. Paid ambulance services are fantastic for routine transports--taking patients to dialysis, non-emergency transports from nursing homes, etc., but most aren't great at EMS. Yes, I understand this is a broad generalization, and yes, there are some people that work for paid services who are great at what they do, but the Town would have no control over who responds if a 3rd party service is hired. Remember that EMS workers go into people's homes when they respond. Combine this with the fact that PD will not be responding to many EMS calls like they used to, and Town Council is basically suggesting that residents be asked to allow EMTs who are total strangers, even to our police department, into your homes without a police escort. Also, be prepared for hefty bills. I had to use the services of a paid ambulance company in a local town, and the bill was $698.
Steven September 07, 2012 at 03:08 PM
SHSB, Your comments are 100% correct. As an EMS professional in NJ since 1990 I can not agree more with absolutely every point you made. I will say that I do not live in Mercer County but I did for many years prior to moving to Burlington County. In my opinion, Mercer County is light years behind many of their neighboring counties (Bucks, Burlington, Hunterdon) with the manner in which they provide 9-1-1 Fire/Police/EMS call taking and dispatch. All of the aforementioned counties provide a county based centralized communications system for ALL police, fire, ambulance, paramedic and 9-1-1 services. Mercer County municipalities across the board would save thousands of dollars annually in costs. An additional benefit to all county residents would result from streamlining this vital service. The current system of duplicate services provided by local police departments, Mercer County Central and Capital Health System is expensive, fragmented and inconsistent. Just the reduction in manpower and elimination of unnecessary infrastructure alone would likely save untold thousands of dollars. It's time for Mercer County to get out of the 1970s and into the 21st Century.
Chief Wahoo September 07, 2012 at 05:33 PM
i must of missed it.....so how exactly does Dick plan on closing the $750,000 gap.....and what happens in 2014 and 2015 and 2016........LOL !!!!!!!
Ira L. Marks September 07, 2012 at 06:13 PM
Still waiting for some comment to appear in the Patch that we need to elect people to township council that have the financial experience and know how to make cost effective changes in the management of the budget without resorting to employee layoffs, which should be the absolute last resort.
Last one out...turns the lights off! September 07, 2012 at 06:29 PM
How about privatizing the township administrator's position?
Richard September 07, 2012 at 07:01 PM
Concerned, I agree with you 100%. Great website. Most of the financial problems in Lawrence are the extreme salaries. Even volunteers could work at the recycling dirt place on Princeton Pike. How much is the man getting paid to hand you a clip board to sign your name? If you look at the township salaries all over the nation even, Ca. the township manager's are making around $65,000 yr... These salary cuts would be a permanent fix to our problem and, not a bandaid !!!
Richard September 07, 2012 at 07:04 PM
Steven, This is such interesting information. Everybody in the township should know about this....how can we get this info out?
Richard September 07, 2012 at 07:06 PM
Good idea. Just like President Clinton said "Arithmetic" It's just simple math....That's how he got U.S. out of debt and, left with a surplus.
Samuel Gaskin September 12, 2012 at 03:36 AM
Reduce salaries and you reduce the competition for the position. You want a lower salary for some of these positions, you drive the current people out and replace them with less experience, less able people. Competitive salaries are necessary to ensure that we have the best people for the job. Just cause you are jealous that someone is getting paid a 6 digit salary, doesn't mean you can go around threatening salary cuts. And @Richard, volunteers are no source of workers. You are advocating eliminating a person's current job. You are the kind of person that is causing the employment rate to be so high. Cutting public positions is not an efficient way to solve our issues. The more you cut, the less services that can be provided.
Samuel Gaskin September 12, 2012 at 03:38 AM
If you think you know how to solve these kind of issues, Call your local freeholder and stop passively posting things like a coward.
Samuel Gaskin September 12, 2012 at 03:42 AM
There are only so many ways to trim the fat from the budget before you have to cut muscle. If you cared to actually pay attention to the township, you would realize that there aren't a plethora of areas that are left to be cut before vital services are removed. These kinds of services are what make a town, a community. No one wants to lay off people, but sometimes it is required as to preserve a service that is used by 100's of townspeople.

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