The Palo Alto Finance Committee voted unanimously to back outsourcing street-sweeping services, but with a few caveats that would help save employees' jobs.
The committee voted to add a phase-in option to the contracted services over a one-year period so that the city employees can be placed in other positions or hired by the contractor. A second clause would require the contractor to hire prospective laid-off employees. The contract should come back for review to the finance committee to make a recommendation to the council.
The Tuesday vote was preceded by a protest outside City Hall by 20 Service Employees International Union (SEIU) workers, who called the move an ongoing erosion of city jobs to private contractors.
The proposal could save at least of $413,000 annually, Ron Arp, Palo Alto solid waste program manager, said. The savings would replenish the city's refuse rate fund, which has a $2 million deficit.
The vote builds on a recent trend of city job outsourcing, which has included landscaping at the Palo Alto Municipal Golf Course. The private landscaping contract to Kachina Landscaping has improved on the quality and efficiency of the work the city had done, according to city staff.
The proposal would keep weekly sweeping in residential areas during the months when leaves fall, but it would reduce neighborhood street sweeping to every other week from March 1 through October. Sweeping in critical areas, such as the Downtown and the California Avenue business district, dead ends, parking lots, sidewalks, garages and bike paths would not be reduced, Arp said. Emergency-response cleanups, from accidents, floods and other incidents, would be done by city employees or a contractor.
Rates to customers for street-sweeping services won't necessarily be reduced due to the cost savings, Arp said.
"We wouldn't recommend cuts, but I think this would take some pressure off future increases. There are prices that are going up in a lot of different areas right now," he said.
The overall street-cleaning program costs $2.3 million annually, and street sweeping takes up $1.1 million of that amount. One third of the savings, $138,000, would be achieved by sweeping every other week. Outsourcing is expected to save $295,000, Arp said. The savings could be greater, since the estimate doesn't include employee pensions and other labor-related costs. The city would sell half its sweeper fleet, reducing it from 14 to seven vehicles.
Public Works ran a pilot program from mid-May through September in five out of 20 residential routes. A complaint log found there were only five calls related to too many leaves during those months, which is not excessive, Steve Banks, manager of street sweeping operations, said.
The proposal would eliminate seven out of 11 positions and put responsibility for sweeping El Camino Real back on Caltrans. Palo Alto took over street sweeping on El Camino, a state highway managed by Caltrans, because the state agency did not do a good job in the past, Committee member Greg Schmid said. But staff said that if Caltrans does take over the job, the city will monitor the work to be sure it is satisfactory.
Currently, the city does the cleanup and submits the bill to Caltrans. If the city does outsource the street sweeping jobs and Caltrans rejects taking over El Camino, the city could contract a company to clean El Camino and would be reimbursed by Caltrans.
Schmid noted the city would bear responsibility for non-point source pollution from debris that ends up in storm drains, and the Regional Quality Control Board has recently implemented new, stringent rules.
Union representative Margaret Adkins echoed those concerns prior to the meeting.
"Outsourcing is a bad idea. It will affect the quality of service. It will not bring accountability. We want to see the community get the services they deserve," Adkins, chapter chairwoman for the Service Employees International Union (SEIU) Local 521, said.
But Arp said performance standards could be written into the contract to maintain the city's high quality of service.
Palo Alto's service level is already above that of other nearby cities, Public Works Director Michael Sartor said. A survey of nine municipalities found the cities sweep streets every two weeks or every month.
If the City Council approves the proposal by Public Works Department staff, seven employees would probably be transferred to other positions. But committee members added that a clause should be included in any contract that would give jobs to employees who might lose their jobs from the outsourcing after trying to place them in other city positions.
The savings are significant, and the committee could not ignore the cost reductions, Committee member Marc Berman said. Committee members said the public has wanted to have more efficient staffing, which the outsourcing would help achieve.
Committee Chairman Pat Burt noted that the city does not currently have a policy to protect contracted employees with a fair wage. The city "should not be indifferent" if the savings creates a significant detriment to the workers. He called for a provision in any contract that would establish a "fair" or living wage for contracted workers. That addition should be figured into the cost savings before the item returns to the finance committee or goes to the City Council, he said.
"If we set those standards, we might have less savings. As a policy, getting savings is important. Getting savings at any cost is not a right value decision," he said.
A broader discussion should consider an overall policy about what would constitute a living wage and benefit levels for outsourcing contracts, he said.
Schmid noted the city should be careful about its wording. Applying terms such as "fair wages" could have implications under state law.
The committee voted unanimously to ask the council to assign an appropriate committee to consider what constitutes living wages.