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Regionalization of fire protection and emergency medical aid services: A comparative case study analysis of economic and socio-political impacts

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Regionalization of fire protection and emergency medical aid services: A comparative case study analysis of economic and socio-political impacts

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REGIONALIZATION OF HRE PROTECTION A M )
EMERGENCY MEDICAI All) SEKVK ES
A COMPARATIVE CASE STUDY ANALYSIS OF ECONOMIC AND
SOC IO-POLITICAL IMPACTS
by
Brian S. Nakamura
A Dissertation Presented to the
FACULTY OF THE SCHOOL OF POLICY, PLANNING
AND DEVELOPMENT
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment o f the
Requirements for the Degree
DOCTOR OF PUBLIC ADMINISTRATION
May 2002
Copyright 2002 Brian S. Nakamura
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UMI Number: 3073823
Copyright 2002 by
Nakamura, Brian Seichi
All rights reserved.
_ ___ ( B )
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UNIVERSITY OF SOUTHERN ■ : ALIFORNIA
SCHOOL OF POLICY, PLANNING, ANi: DEVELOPMENT
UNIVERSITY PARK
LOS ANGELES, CALIFORNIA 90089
This dissertation, written by
Brian S. Nakamura
under the direction o f h.h?.. Dissertation
Committee, and approved by all its
members, has been prese. \ted to and
accepted by the Faculty of he School o f
Policy, Planning, and De\ elopment, in
partial fulfillment o f require nents for the
degree o f
DOCTOR OF PUBLIC ADM USTRATION
Dean
DISSERTATION C O !
P e rso n
Srr..
copyright owner. Further reproduction prohibited without permission.
ACKNOWLEDGEMENTS
This research could not have been completed without the relentless support,
dedication, and guidance, provided by Dr. Ross Clayton, Dr. Chester Newland, and
Dr. Daniel E. O’Toole. My sincere thanks for sharing with me distinguished
knowledge and invaluable insight in the field of public administration and
providing a foundation from which I have grown, academically and professionally.
A large portion of this dissertation could not have been conducted without
the support provided by the City of Oregon City, the City of Milwaukie, the
Tualatin Valley Fire and Rescue District, and the Clackamas County Fire District I
elected officials, administration, and citizenry. My thanks go to all who took the
time to answer questions and inquiries, provided invaluable research data and
archival records, and freely offered ancillary support.
Most importantly, I wish to thank my wife, children, and parents for their
patience and support for my desire to pursue this eternal personal and professional
journey. Sharon, your perseverance, encouragement, and commitment to me are
treasured and everlasting. Brice, and Trevor, I promise to make up for making the
family late for the soccer and baseball games, declaring family vacations as
weekend trips to the library, and becoming overly possessive of the computer while
trying to convince both of you that sharing is a good trait. Mom and dad, from as
far back as I can remember, thanks for impressing upon me the importance and
value of education.
ii
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TABLE OF CONTENTS
ACKNOWLEDGEMENTS
LIST OF FIGURES
ABSTRACT
CHAPTER
1 INTRODUCTION AND OVERVIEW
Introduction
An Overview
Statement of Problem
Further Background - Definition of Terms
Summary
2 LITERATURE REVIEW
Introduction
Economic Thought Regarding Contracting
of Public Services and Programs
Socio-political Thought Regarding Contracting
of Public Services and Programs
Summary of Contracting Out Theory
Fit with Literature on Contracting Out
Gap in Contracting Out Literature
3 METHODOLOGICAL TECHNIQUES /
RESEARCH DESIGN
Design Elements
Measurement Techniques
Interviews/Inquiries
Documents and Archival Records
Participant Observer
Research Techniques and Integration of Case Study
Evidence
Contract Convergence Model Explained
Integration of Contract Convergence Model
Page No.
ii
vi
vii
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TABLE OF CONTENTS (continued)
CHAPTER
4 FIRE PROTECTION AND EMERGENCY MEDICAL
AID SERVICES IN OREGON CITY AND
MILWAUKIE, OREGON CASE STUDIES
Introduction
Overview of Case Studies
Historical Context of Fire Protection and
Emergency Medical Aid Services in
Oregon City
Intergovernmental Agreement (IGA) Between
Oregon City And Tualatin Valley Fire and
Rescue (TVF&R)
Historical Context of Fire Protection and Emergency
Medical Aid Services in City of Milwaukie
Intergovernmental Agreement (IGA) Between
Milwaukie And Clackamas County Fire
District 1 (CCFDl)
5 ANALYSES OF CASE STUDIES
Introduction
Application of Researcher’s Convergence Model
for Contracting Out
City of Oregon City/Tualatin Valley Fire and
Rescue (TVF&R)
City of Milwaukie and Clackamas County Fire
District 1 (CCFDl)
Outlook for the City of Oregon City
Outlook for the City of Milwaukie
Comparative Analysis
Case Specific Criteria for Contracting Out Fire
Protection And Emergency Medical Aid Services
Conclusion
Page No.
48
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TABLE OF CONTENTS (continued)
CHAPTER Page No.
6 PRINCIPAL FINDINGS, CONCLUSIONS,
SUMMARY, AND RESEARCH IMPLICATIONS 105
Introduction 105
Principal Findings 106
Conclusions 110
Summary 122
Research Implications 123
BIBLIOGRAPHY 126
APPENDICES
A ELECTED OFFICIAL INQUIRIES
B ADMINISTRATIVE INQUIRIES
C COMMUNITY/NEIGHBORHOOD ASSOCIATION
MEMBERS INQUIRIES
135
138
140
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LIST OF FIGURES
FIGURE
1. Contract Convergence Model
2. Milwaukie, Oregon/CCFDl Contract Convergence Model
3. Oregon City/TVF&R Contract Convergence Model
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Brian S. Nakamura Dr. Ross Clayton
ABSTRACT
REGIONALIZATION OF FIRE PROTECTION AND
EMERGENCY MEDICAL AID SERVICES
A COMPARATIVE CASE STUDY ANALYSIS OF ECONOMIC AND
SOCIO-POLITICAL IMPACTS
Contracting out of general fund services and programs to regional service
producers is often viewed as an opportunity for local governments. The regional
distribution of services can produce significant benefits to municipalities seeking
reductions in labor and equipment costs, provision of a broader spectrum of
services, and expansion of service areas to meet emergent needs.
This dissertation’s overarching question is, why? Why is contracting out
successful in some cases and unsuccessful in others, and what empirical
generalizations and conditions are useful when considering contracting out?
Specifically, since two cities of similar populations, budgets, and within the same
county contract out fire protection and emergency medical aid services to two
different regional service producers, what structural and operational differences
exist that affect the outcomes of entering into these contractual relationships?
This dissertation explores and integrates economic and socio-political
theory and contracting out practices, explores the benefits and shortcomings of
providing an essential public service through a contractual relationship with a
vii
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regional service producer, and compiles the elements essential for a successful
contractual relationship.
The case study analysis focuses on two cities in Oregon that contract out
fire protection and emergency medical aid services to regional service producers.
Oregon City contracts with Tualatin Valley Fire and Rescue, (TVF&R) and
Milwaukie contracts with Clackamas Fire District 1.
This research supports existing literature that contracting out to regional
service producers is a viable alternative for providing government services. Core
research techniques for conducting this dissertation’s case studies consist of open-
ended interviews/inquiries, gathering documents and archival records, and this
researcher’s insights and knowledge as a participant observer.
A Contract Convergence Model is offered as a tool that government
managers and organizations can utilize to anticipate and address pertinent economic
and socio-political elements linked to successful contract situations. Further, this
dissertation identifies key decisions made during the policy-making process by
regional service producers, municipalities, and communities. These decisions
contributed to successful and discordant contractual relationships.
vui
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CHAPTER 1
INTRODUCTION AND OVERVIEW
Introduction
Public sector contracting out of services and programs has a significant
history and survives years of debate, controversy, and contentiousness. The
Lakewood City Plan (Ostrom, 1974, 1977; Tiebout, 1983; Sonenblum & Kiri in,
1973), also known as the Contract City Model, represents an effective method for
government organizations wishing to purchase essential public services from a
regional service producer. In a sense, contracting out represents government’s
endeavor to function like a business, considering cost efficiencies and economies of
scale as motivators for externally purchasing, rather than internally providing,
services and programs.
At the local level, government continues to wrestle with and strive towards
securing more efficient and effective methods for providing services and programs.
One option that has existed for decades and continues to be a primary method for
achieving structural, operational, and fiscal stability at the municipal level is the
use of contract services from regional service producers, such as counties or special
districts. As mentioned, the Lakewood Plan of 1954 is arguably the most appealing
example of successful contract municipal services. The Lakewood Plan
exemplifies the success of the City of Lakewood in entering into contracts with Los
Angeles County, private industry, non-profit agencies, and several special districts
1
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to provide essential government services, such as police, fire, and library services.
The Lakewood Plan, envisioned and endorsed by John Todd (1954), continues as a
successful method for providing cost-effective and flexible government services
and programs.
The field of public administration involves the study of government’s role
in producing and providing essential public safety services and other social services
the private sector chooses not to produce or perform. It is not difficult to find
numerous academic and practitioner case studies demonstrating government’s
ability to successfully produce and deliver public services and programs internally
or by purchase. Regardless of method, government represents a mix of market
(customer satisfaction and efficiency) and non-market practices (social equity).
A great deal of controversy exists today regarding contracting out as an
effective method for providing and producing public services and goods. There are
academicians and practitioners who contend that contracting out is a natural
progression toward government efficiency and market-like practices which should
be government’s primary focus (Ross, 1987; Miranda, & Anderson, 1994). Then,
there are those that argue for a more holistic approach to government’s decisions to
explore contracting out opportunities. Hodge (1993) argues for at least five
different areas or dimensions that might provide a framework for judgments on
contracting out government services; these include economic performance, social
performance, democratic performance, legal performance, and political
performance.
9
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This dissertation, utilizing a variation of Hodge’s framework, focuses on a
comparative case study analysis of two cities in Oregon that contract out fire
protection and emergency medical aid services to regional service producers.
Oregon City contracts with Tualatin Valley Fire and Rescue (TVF&R) and
Milwaukie contracts with Clackamas County Fire District 1 (CCFDl).
Specifically, this dissertation will examine and analyze the dynamics of two
municipalities contracting out fire protection and emergency medical aid services;
it will examine regional versus local control and the provisions of contracting out
for these two Oregon cities.
The overarching question for this dissertation is, why? Why is contracting
out successful in some cases and unsuccessful in others, and what empirical
generalizations and conditions are useful when considering contracting out? This
dissertation examines two cities of similar populations, budgets, and within the
same county that contract out their fire protection and emergency medical aid
services to two different regional service producers and examines and evaluates
what structural and operational differences exist that affect the outcomes of
entering into these contractual relationship. Contracting out is not new.
Contracting out is in (Behn, Kant, 1999), and academic and practitioner desire to
better understand elements of contracting out for successful implementation
continues to grow. The opportunity for municipalities to transfer fiscal,
operational, and structural responsibilities of public services and programs to
regional service producers can be desirable and has been successful in many
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instances, but underestimating the complexities in making this decision may lead to
terminal results.
An Overview
The subject of this dissertation is to address the overarching complexities of
contracting out and how successful contracts rely upon sound policy-making,
administration, contract design, and provider-producer relationships (i.e.,
communications and community). Specifically, a comparative case study analysis
will be conducted of two cities in Oregon that contract out fire and medical aid
services to regional service producers: (i) Oregon City to Tualatin Valley Fire; and
(ii) Rescue, and Milwaukie to Clackamas County Fire District I.
The issues to be focused on are: (1) What roles did the political bodies,
administrations, and communities of both providers and producers played in the
transfer of fire protection and emergency medical aid services from local to
regional control? In other words, what were the key elements that allowed a
service transfer to occur?; (2) How were the contracts designed, and how did
politics, negotiations, and communities impact each contractual relationship’s
success?; (3) What challenges were faced by both contractors as service producers
(Tualatin Valley Fire and Rescue and Clackamas County Fire District 1) and
providers (City of Oregon City and City of Milwaukie) subsequent to contracting
out in adapting to new service delivery models, with different organizational
structures, operational standards, and expectations?; and (4) What important issues
4
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and challenges face the City of Oregon City as it considers termination of its
current contract with Tualatin Valley Fire and Rescue? Contract termination will
likely result in Oregon City resuming its internal fire and medical aid operations, or
contracting to Clackamas County Fire District 1.
This case study embraces four components. First, a comparative analysis is
done of two municipalities that provide fire and medical aid services through
contractual arrangements with regional service producers. Second, both
municipalities are examined for degrees of convergence through a Contract
Convergence Quality Circle (see Figure I). Third, key elements o f convergence are
identified that political bodies and administrations may/must address prior to and
during contract negotiations and throughout the life of a contract. Fourth, a useful
knowledge base is developed for political bodies and administrators to use when
considering contract services in order to minimize city and contractor fiscal,
operational, and structural concerns and hindrances.
Statement of Problem
Contracting out of general fund services and programs to regional service
producers is often viewed as an opportunity for local governments. The regional
distribution of services can produce significant benefits to municipalities seeking
reductions in labor and equipment costs, provision of a broader spectrum of
services, and expansion o f service areas to meet emergent needs.
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FIGURE 1. Contract Convergence Model
Achieving Convergence1
Policy and
Administration
Community
Involvement
and
Participation
Contract
Duration
(Time)
Economics
Convergence
Contract
Duration
(Time)
Policy and
Administration
Community
Involvement
and
Participation
Economics
1 The Contract Convergence Model offers four key elements when considering contracting out,
policy and administration, community involvement and participation, contract duration (time), and
economics. The dissertation proposes that alignment and fitting together of the four key elements
provides for a successful contractual relationship between a provider and producer of fire protection
and emergency medical aid services.
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Given the opportunities and benefits of contracting out, why has Oregon
City’s effort to contract out fire protection and emergency medical aid services to a
regional service producer, Tualatin Valley Fire and Rescue, been less successful
than that of Milwaukie, Oregon, which contracts for performance of fire protection
and emergency medical aid services with Clackamas County Fire District 1.
Clearly, overarching concerns are associated with the contracting o f public services
to regional service producers. This dissertation attempts to assess the theory that
contracting of services can provide benefits to municipalities fiscally, operationally,
and structurally; and that successful results depend upon an effective policy
making process, prudent negotiations and administration of contracts, flexibility
and adaptability by both providers and recipients of services, and open
communication.
Further Background—Definition of Terms
As with any research topic, exploring the effectiveness of contracting out
and regional versus local control assumes some common understanding of
terminology. However, definitions provided by the writer are subject to academic
and professional discussion and debate.
Key terms formulated as questions for purposes of this research are, at
minimum:
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Contracting out— focuses on a municipality’s decision to allow a regional
organization or entity to produce a general fund service that would otherwise be
provided internally by that government. This action occurs when a municipality’s
governing body, typically the city council or commission, takes a formal policy
action that puts into effect a legal contract directing the municipality to pay a
regional organization or entity for services produced.
Regional service contractor, producer, and performer— refers to an organization or
entity not governed directly by a municipality. A regional service producer is
typically a county agency, special district, or private organization that functions
under a fee-for-service model. Services normally provided by municipalities with
unrestricted general fund monies include, but are not limited to police, fire, parks
and recreation, and library services.
General fund monies— those monies generated from property taxes, franchise fees,
transient room taxes, intergovernmental revenues and charges for services. The use
of general fund monies is unrestricted.
Convergence— a term drawn from Tushman and O’Reilly (1997). It involves a
multi-step process that enables organizations to achieve political, administrative,
and fiscal stability through organizational problem solving. For this dissertation,
convergence shall be determined to exist if a fiscally sound contractual
arrangement is in place that enhances regional and local services being provided by
government, and the arrangement is accepted politically, administratively, and by
the community.
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Summary
Municipalities, for years, have utilized contracting out as a method to
improve their operational efficiency and fiscal stability and, in many cases,
contractual arrangements do accomplish such ambitions. Contracting out of
municipal services and programs is a structural organizational change that
sometimes conforms to the theory that consolidation of municipal services may
result in improved fiscal and operational efficiencies. The basic proposition of this
dissertation is: Contracting out of municipal services engenders organizational
convergence when it includes a thorough policy-making process, a flexible and
adaptable contractor to perform services, a government provider of services that
acknowledges operational and structural changes delineated by contract, and
ongoing purposeful communication at political, administrative, and citizen levels.
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CHAPTER 2
LITERATURE REVIEW
Introduction
Sonenblum and Kirlin (1975) describe the service structure for
governmental jurisdictions as “a pattern of relationships among corporate actors
(governmental and private) with respect to the three activities involved in providing
a service namely: planning; producing and distributing; and financing”
(Introduction xvii). Their statement clearly reflects government’s purpose and
more importantly breaks down critical elements of its operation so that effective
analysis of services provided can be performed systematically within a rationale.
Academics and practitioners, with good reason, persistently explore
operational efficiencies in providing public services and programs. As policy
makers experience pressure from constituents to ‘reduce taxes,’ ‘eliminate
bureaucratic red tape,’ and ‘do more with less,’ there appears to be an inherent
belief that removing service(s) from a jurisdiction’s control leads to more cost
effective methods in providing public services and programs. Evidence of this
belief is found in academic and practitioner literature grounded in contracting out
as an efficient and effective method for providing public services.
An “out of sight out of mind, contract out” maxim can and, in many cases,
successfully lead to a more efficient and effective method for providing
government services and programs. However, usurping other viable delivery
10
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alternatives may create an environment that negates its intended outcome. Fiscal
errors of any magnitude in politically sensitive environments have enduring
impacts politically and administratively. It is of utmost importance for politicians
and administrators to fully examine options for service and program delivery.
A time-tested method for providing more efficient and effective municipal
governmental services, improving and expanding service and program levels,
and/or reducing fiscal stress, is through contracting with a county or special district.
A plethora of academic and practitioner research studies identify characteristics of
contracting out that appeal to many municipalities, small and large.
Literature reviewed for this dissertation reveals two streams of thought in
contracting of public services and programs, the first being economic and the
second socio-political. It is clear that economic and socio-political theory carry
significant weight when considering and evaluating opportunities for contracting
out. Notwithstanding various problems with contracting, this case study
dissertation will raise and integrate both economic and socio-political aspects,
considerations important to municipalities in choosing to contract out services. The
dissertation fortifies the argument that economic and socio-political aspects
complement one another in successful contractual relationships.
Touche Ross (1987, p. 5) and Miranda and Anderson (1994, p. 26) show
cost savings to be the top advantage of contracting out. A survey conducted by
Touche Ross (1987) finds, in descending order of importance, that cost savings,
solving labor problems, sharing risk, obtaining higher quality service, providing
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services not otherwise available, experiencing shorter implementation time, and
solving local political problems, are elements to consider for contracting out.
Economic Thought Regarding Contracting of Public Services and Programs
For a capitalist society that relies on a market driven economy, such as the
United States, there is a strong rationale for contracting for services. This rationale
is in the premise that in a market economy competition brings forth the best prices
and services. There are policy-makers and administrators throughout the nation
who believe government services and programs can and should be treated like
market-produced goods and services.
Economic theories and rationales regarding public services assume an
ability to quantify fiscal, structural and performance impacts of services and
programs. Tangible measurement has shown a direct correlation between cost,
services, and programs received. Whether government services are provided in-
house or under contract, those services (and programs) are based upon revenues
and expenditures. As revenues increase, so do the levels of service and vice versa.
At a conceptual level the economic view is that, when it will be to their benefit,
individuals, groups, politicians, and bureaucrats will seek to maximize their gains
in the public market by competing with others for the benefits offered by collective
action (Downs, 1957; Niskanen, 1971; Olson, 1965).
As noted, the Lakewood Plan is considered by many academics and
practitioners to be the most successful with regard to serving a community’s public
12
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service and program needs through contractual arrangements. In 1954, the City of
Lakewood, California, incorporated with little or no means for providing essential
internal services such as police, fire, public works, libraries, parks, and recreation
(Kirlin, 1973; Hollinger, 1971; Warren, 1966). Lakewood became a “contract
city.”
Lakewood’s contribution towards academic and practitioner research
continues to be its enduring relationship with regional service providers and private
firms. Lakewood’s contract philosophy in 1954 and still to this day enables
essential public services to be provided through contract. The City’s basic
approach is to seek services that best fit in the organization that continues to ensure
the satisfaction of its elected officials, administration, and community.
Although many cities have followed suit and attempted to model their
organizational structures similar to Lakewood, not all have been as successful in
providing public services and programs under contract with a county, regional
service provider, or private firm. Other cities’ successes and failures appear to
stem from both economic and socio-political factors, including but not limited to,
reaction to fiscal crises, subsequent federal, state, and local policies, and the
community’s understanding and expectations for public services and programs.
The City of Lakewood and its residents, when considering contractual services,
found themselves accepting levels of service already being provided by the county,
regional service providers, and private firms. The State’s property tax structure in
1954 for addressing local government services and programs was not as complex as
13
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it is today. Working under today’s structure, cities are responsible for meeting
greater demands and providing more complex levels of services.
Nevertheless, the Lakewood Plan (Contract City Plan) continues to support
the economics of cityhood and provides justification for contracting out. Cities
considering contracting out model their efforts after the Lakewood Plan or some
derivative of it. Economic incentives such as keeping property taxes low while
maintaining or improving municipal services remain a core focus for contracting
out. Further, fiscal crises in municipalities have caused political officials and
administrators to examine service delivery alternatives. Tradeoffs associated with
any change in service delivery, if acceptable to communities, will continue to allow
contract services to remain a viable alternative.
In 1973, John Kirlin used organizational theory to analyze the impact of the
Lakewood Plan on Los Angeles County and the Los Angeles County Sheriffs
Department (LASD) in order to better understand the operations of contractual
relationships and suggest ways in which organizations are changed by contract
services. The Kirlin study focuses on economic indicators, such as cost for
services, modifications to organizational structures, and public policy implications.
It also delves into the realm of what this writer interprets as socio-political theory,
emphasizing the importance of networking and mutual dependencies between the
LASD (agents) and the contract cities (principals).
In his consideration of the Lakewood Plan (Contract City Plan), Kirlin
concludes that the Plan further reveals unexplored, yet key elements o f importance.
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First, benefits derived by the city councils and city managers of contract cities
suggest that the (Lakewood) Plan will continue in existence after its “economic”
and “service” benefits are exhausted; second, mutual dependencies have led to
limited accountability, thus keeping intact the core values of the principal’s and
agent’s organizations; third, within the context of the value system of the LASD
and city managers of contract cities, the contract cities receive better services than
do the residents of unincorporated areas served by the LASD; and fourth, contract
cities have chosen increased control over the quantity of police services provided at
the cost of decreased influence over the type of services rendered (Kirlin, 1973, p.
581-582).
Richard Box (1999, p. 19) surmises from the intense ideology that
government should mimic the market that “public administration practitioners and
academicians are faced with demands from politicians and citizens that government
should be operated like a business. By this they mean that it (government) should
be cost efficient, as small as possible in relation to its tasks, competitive,
entrepreneurial, and dedicated to pleasing the customer.”
Evidence that market concepts and models have an impact on the public
sector are recognized by the mass of literature revolving around strategically
profound terminology, such as downsizing, rightsizing, reinventing, reorganizing,
and entrepreneurial. Box focuses on the broad issue of running government like a
business and compares public-private relationships. Nonetheless, there is a desire
by academics and practitioners to reexamine the structural, institutional and
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economic elements of contractual relationships. Further, there are socio-political
elements of contractual relationships that need to be examined, including the effects
of contracting out on interpersonal, political, and social interactions.
Why should government contract out? (Butler, 1985; Savas, 1982), when it
should contract out (Donahue, 1989; Prager & Desai, 1996), and how it should
contract out? (Harney, 1992; Rehfiiss, 1989) are questions that give purpose to
contracting out studies. The historical philosophy of conventional government
contracting, which includes economic incentives, such as time and materials,
percentage of revenues, and fixed prices with escalators, meets the various needs of
the public in a business like manner. From an economic standpoint, government
contracts out because it cannot provide or produce a service as efficiently due to
lack of resources (Chi, 1993; Kettl, 1993; Globerman & Vining, 1996).
The benefits of contracting out when relying on economic theory are
measured simply by inputs and outputs. Economy correlates to revenues and
expenditures available for services and programs, and efficiency is a measurement
of the unit cost of services and programs provided. Logically stated, the greater the
input, the greater the output. So, for conventional government contracting the
providers and producer of services and programs have carefully scrutinized and
defined roles. The provider and producer agree to quantifiable objectives; and, as
long as the conditions of the contract are met, mutual satisfaction is typically
attainable.
16
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Qualitative outcomes, on the other hand, are more desirable in current
contracting out relationships. Literature reveals greater attention being paid to
private and nonprofit production of government services. As evidenced by much of
the current contracting out research (Behn & Kant, 1999; Smith & Lipsky, 1993;
Kettl, 1993; Savas, 2000), there is a desire by both providers and/or producers to
meet and exceed expectations of the clients and consumers. Such motivations by
providers and producers result in performance based contracting out that focuses on
outcomes rather than on inputs, processes, or activities, and seeks to maximize the
producer’s flexibility in meeting client and consumer needs.
Performance-based contracting out is quantitative and qualitative. Carsten
Greve (2000) suggests there is an overwhelming desire by contractors to form
alliances with governments, produce services and programs economically and be
socio-politically attractive to providers. Behn and Kant (1999) further support
performance-based contracting; they see a shift from conventional or regulatory
contracting, defined as firm fixed price, fixed price with escalators, fixed price with
incentive, and cost plus fixed fee contracts, to a more inclusive style of producing
services that are unique and adaptable to situations. There is no one best way or,
certainly, no one best way for all times and all circumstances. In fact, the advocates
of performance-based contracting assume that there may well be many different
ways to achieve any specific purpose under any specific circumstances at any
particular time (Behn & Kant, 1999, p. 473). The traditional rules for contracting
out have clearly changed over time. Various forms of performance contracting are
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replacing conventional regulatory contracting out and forging a unique
convergence of fiscal, social, and political convictions.
Socio-political Thought Regarding Contracting of
Public Services and Programs
Socio-political theory examines qualitative and humanistic frames of
thought when considering contracting out of public services. As a result,
arguments for the economics of contracting out, fiscal reform, reorganization, and
performance-based operation, are replaced with human intuition, emotion, and
instinct. Typical economic questions such as “What fiscal impact does contracting
out have on a budget?” or “What personnel costs are associated with a transition of
services to a contractor?,” are replaced by questions of human emotion such as
“How will constituents react to outsourcing an essential government service and/or
program?” or, “What happens to the employees if contracting out is implemented?
Will they have jobs or be unemployed?”
Socio-political thoughts at times overlap and create conflict with economic
rationales. While economic data and information may support efforts to contract
out public services and programs, inherent questions of community good tend to
emerge in policy-makers’ and administrators’ minds. Likewise, human emotions
can adversely affect rational decisions in providing public services and programs.
Constituent pressures tend to create environments that cause political and
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administrative officials to place economic rationales such as fiscal, structural and
performance elements aside.
Grame A. Hodge posits “contracting reform is a fundamental change in the
way society is itself increasingly working and in the way public sector services are
delivered” (Hodge 1999, p. 467). In order to adapt to this fundamental change
Hodge suggests a framework for examining contracting out to assess and evaluate
the successes of contracting activities. This framework is constructed utilizing five
performance indicators: economic, social, democratic, legal, and political; and
when comparatively examined and evaluated, are key towards establishing
successful contracting out situations for government services. Hodge finds that
contracting does appear to have some real financial advantages for specific
government services. However, complete contracting out of government services
should not be a leap of faith experiment, nor based wholly on economic
justification.
Bailey (1987) and Halachmi and Holzer (1993) suggest that contracting out
may result in a lessening of public will and welfare considerations as emphasis is
placed on the integrity of the contract instead of public accountability. Examples
of this are evident in situations where contractors provide services to easy and
profitable customers while opting not to provide services for difficult or
unprofitable organizations (Bamekov & Raffel, 1990, p. 137). Contracting out also
creates risks (Kettl, 1993) to the integrity of public service delivery; some of these
risks are corruption potential, conflicts of interest, service disruption potential when
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contractors do not perform well, inflexibility and management problems, loss of
important sources of information by government, and data sharing that might give
an advantage to some participants over others (Halachmi & Holzer, 1993. p. 57).
Mil ward and Provan (2000) expand upon their 1993 research question
“What does the Hollow State Look Like,” which refers to any joint production
situation where a governmental agency relies on others (firms, nonprofits, or other
government agencies) to jointly deliver public services, by further examining the
theoretical development and the empirical findings of networking of organizations,
principal-agent relationships, and solving social dilemmas. The hollow state also
refers to “the degree of separation between government and the services it funds”
(Milward & Provan, 2000, p. 361).
The general principle behind Milward and Provan’s argument is that
networking creates an environment that enables multiple organizations to work
cooperatively together. Unlike direct government services and a bureaucratic
mechanism that can be used to control them, the hollow state uses very few if any
control mechanisms. This situation allows for flexibility and an ability to adapt by
the providers and producers of public services and programs, when necessary.
However, flexibility and adaptability can also create unstable environments for
political and administrative officials. The instability arises in the negotiating and
monitoring of services being provided by contractors particularly concerns
regarding risks and data and information sharing (Kettl, 1993, Halachmi & Holzer,
1993).
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Principal-agent relationships according to Milward and Provan are network
relationships that attempt to place rationality in line with the socio-political plane
of contracting out. Miller (1992) argues that “The principal’s job is to anticipate
the rational responses of agents and to design a set of incentives such that the
agents find it in their own interests (given the incentive system) to take the best
possible set of actions (from the principal’s perspective). The reality of a principal-
agent relationship is that a principal may desire to take certain political risks to
capture or retain business, for fear of losing market share to a competitor, but will
not take so much risk that such efforts are fiscally costly.
Paul Light (2000) suggests that the new policy system in the contract
regime relies upon three models of accountability: compliance-based
accountability; performance-based accountability; and capacity-based
accountability.
“Compliance-based accountability is built around the idea that
organizational improvement flows from a set of precise rules for
conduct, performance-based accountability puts its emphasis on
setting goals that pull the organization toward a hoped-for future,
and capacity-based accountability...puts its faith in providing the
tools (be they human, technological, or motivational) needed for
improvement” (Light, 2000, pp. 46-47).
In an effort to summarize the recurring issues related to contracting out,
Carsten Greve isolates four fundamental questions that academic and practitioner
literature has attempted to address over the past 10 to 15 years. The questions are
as follows: (I) How can we measure performance of companies that win contracts
from the government?; (2) What happens to the accountability o f governments if
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tasks are contracted out to private sector companies or nonprofit voluntary
organizations?; (3) What kinds of tasks are appropriate for governments to contract
out?; and (4) What constitutes a smooth contracting out process?” (Greve, 2000, p.
277-279). Beyond these typical questions, which can be answered on a case-by-
case basis, Greve implies that contract performance is contestable and that
performance indicators are influenced by economics and socio-political values
(Savas, 2000; Boyne, 1998; Hodge, 2000). Kettl argues that all types of
government types of services may be appropriate for contracting out (Kettl, 1993),
and can be analyzed as a “best practice” exercise (Organization for Economic
Cooperation and Development 1997).
Greve attempts to further analyze contracting out efforts as a way to explore
providing government services in a more practical manner, economically and
socially. Greve frames his theory as an effort to “explore new avenues of
contracting out” (p. 277) to answer questions that go beyond economic rationale.
This theory supports DeHoog’s (1984, p. 16) argument that public
administrationists must go beyond the economists’ deceptively simple cost
comparisons of private versus public production of services to examine the
contracting out process, including its political, administrative, and performance
components.
The new issue for contracting out that researchers need to be aware of is
that many tasks previously considered to be public have come to be contracted out
to private providers. In practice, private-sector providers are keen to please
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government purchasers’ wishes, and closer cooperation between government and
private sector providers is imminent (Greve 2000, p. 279). Supporting Greve’s
theory is evidence related to worldwide efforts by private firms and nonprofit
organizations to compete with or establish a working relationship with
governments and by the growing number of public-private partnerships.
An important aspect of the socio-political ramifications of contracting out is
system (organizational) stability. Federal, state, county and municipal
organizations typically do not provide just one service. For example,
municipalities that provide internal public safety services typically do so under
multiple umbrellas, differentiated by departments and budgets, such as police, fire,
and code enforcement. Contracting out one or more of the divisions of public
safety does not necessarily ensure fiscal or structural stability for a municipality or
its departments. Removing a fire department does not directly affect the structural
stability of the police department, nor does it add fiscal stability as a transfer of
service that usually results in a transfer of most, if not all, revenues to a contractor.
Summary of Contracting Out Theory
Substantial research reveals volumes of literature on contracting out
responsibility for government services and goods to private enterprise and
nonprofit organizations. Contracting out has occurred for centuries. In fact,
contracting is such a normal occurrence academicians and practitioners sometimes
forget that a simple purchase of pencils is one form of contracting for public goods.
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Likewise, government’s desire to protect its populace from the threat of outside
military force leads to its constructing a complex national missile defense system
(clearly a public good). Yet, the system’s construction is thought to be best left to
private enterprise to design and build.
Government agencies wishing to establish a public-public or public-private
contractual relationship include economic and socio-political theory and practice in
their decisions. Governments, like private enterprise, are concerned about revenues
and expenditures, policy decisions and implementation, and community impact;
therefore, they focus on providing quality services and programs that are able to
effectively deal with social problems. In the event a government cannot efficiently
and effectively provide internal services, it must consider service and program
delivery alternatives, such as contracting out. Academicians and practitioners alike
agree that governments will rely on contractual relationships to some degree as
long as there is a demand for public services and goods. Analyses on contracting
out, over time, have begun to intertwine economics, sociology, psychology,
political science, and a myriad of other fields of study, just as public administration
spills over into public management, political science, and other academic domains.
This dissertation explores and integrates economic and socio-political
theory and practice focused on contracting out. It explores the benefits and
shortcomings of providing an essential public service through a contractual
relationship with a regional service producer, and compiles elements essential for
successful contractual relationships.
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Fit with Literature on Contracting Out
Academicians and practitioners recognize that successful contractual
relationships consist of a combination of economic and socio-political
arrangements and pragmatism. To this day, politicians and administrators, due to
fiscal realities, seek alternative methods for providing essential government
services and programs, specifically those involving public safety. Their search
conclusions can be based on any given contract model or mix thereof, such as best
practices, entrepreneurship, fiscal reform, etc.
This case study dissertation is consistent with Kettl (1993) and other
academicians’ and practitioners’ beliefs that government services should be given
consideration for contracting out. However, whether or not efficiency and
effectiveness in government services and programs are improved by contracting
out, is debatable.
This researcher’s review of academic and practitioner literature finds two
key elements related to providing public services and programs. First, public
services and programs are typically those provided by governments as a result of
the private sector’s lack of interest or realization of profits. Second, contracting out
and shifting of public services and programs from one government agency to
another or to private enterprise because of new or revised statutes and regulations
may not create economic and socio-political benefits to either the provider or
producer of services and programs. This dissertation attempts to corroborate
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existing research through use of economic and socio-political analyses and
exploration of a contract convergence model.
Lakewood, California, subsequent to its incorporation, realized that it was
reasonable, practicable, and economical to contract with Los Angeles County for its
municipal services. Rather than painstakingly establish city policies and
procedures that were bound to overlap with Los Angeles County’s existing policies
and procedures, Lakewood decided to accept and honor those currently in place.
The key to Lakewood’s success was that contracting out was not only justifiable
economically, but socio-politically as well. At that time, Lakewood’s citizens
(customers) were receiving satisfactory government services, and there was a
majority sentiment that no changes were needed (Hollinger, 1971, iii). Today, the
City of Lakewood continues to function as a thriving contract city that provides
customer service via public-public and public-private partnerships (City of
Lakewood, Budget Narrative, 2000).
The City of Oregon City and Milwaukie, Oregon approached contracting of
fire protection and emergency medical services with similar thoughts, i.e., to
contract with regional service providers in an effort to gain efficiencies and
minimize overlaps in policies, procedures and services. Comparatively, Lakewood
had never had the opportunity to directly provide its services as an unincorporated
area o f Los Angeles County, and subsequent to incorporation continued providing
its services under contract. The Lakewood model does, however, illustrate the
benefits and success of a contractual arrangement with a regional service provider
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and provides a comparison model for the Oregon City and Milwaukie arrangements
for fire protection and emergency medical services.
A review of contracting out literature identifies economic, political,
administrative, and performance components as justifications for externalizing
services. The regionalization of services provides for access to a broader base of
specialized personnel, operations and equipment.
The pooling of resources, referred to as specialization or regionalization, in
contracting out literature is referred to by some as networks (DeHoog, 1984;
Milward & Provan, 1994). These networks tend to be highly specialized linked
organizations that serve large geographic areas with greater efficiency and
effectiveness than independent smaller agencies within the boundaries of their
service districts. Networks, according to Milward and Provan (1994), provide for
economies of scale, allow providers and producers to optimize levels of service,
and provide flexibility to continually alter services to better meet the needs of the
citizenry. Just as buying and selling in bulk quantities, tends to yield better prices
per quantity purchased, networks provide a way for government to provide
standardized services over a broader population and tax base.
Gap in Contracting Out Literature
Contracting out of essential government services is not new, nor is it an
exact science. It is likely that many, if not all government services, at some time
may be considered for contracting out to private and nonprofit organizations. Over
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time, exploration, examination, or evaluation of contracting out processes will
reveal novel information and lead to updating and forging new contracting out
databases. Historical and present contracting out literature and research may well
be challenged by this information.
The development of this dissertation will further expand on contracting out
literature and specifically catalog elements related to Oregon City and Milwaukie,
Oregon, contracting out their fire protection and emergency medical aid services.
This research will assemble descriptive and deductive explanations for contracting
out successes and failures, examining economics (fiscal stability), political and
administrative purposes, community, and contracting out performance. Clearly,
there is still much to be learned about contracting out through research in
economics, political science, public administration, and other related fields.
This case study dissertation will overlap much of the literature already in
print on contracting out; its intent will be to expose critical elements pertinent to
successful and failed contracting out efforts. Specifically, this dissertation will
compare and contrast two municipal organizations’ efforts to contract out an
essential public service, fire protection and emergency medical services to regional
service providers, and develop a model that government organizations can use as a
tool for improving their likelihood for success when exploring public-public and
public-private partnerships.
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CHAPTER 3
METHODOLOGICAL TECHNIQUES / RESEARCH DESIGN
The basic proposition of this dissertation is that, regardless of what types of
services or programs are considered for contracting out, the success of outsourcing
depends upon a grounded policy-making process, efficient administration, and
effective communication. In many situations, municipal governments’ decisions to
contract out have proved successful when measured fiscally and by service and/or
program improvements. Today, the scope of governmental services and programs
contracted out is broad, ranging from police and fire services to parks and
recreation programs, and to copy and cleaning services.
Behn and Kant (1999) cite numerous research articles that examine
examples of contracting out of public services and programs to private enterprises,
such as design, construction, and maintenance of roads and bridges (Chi, 1993, pp.
14-15); for production of nuclear weapons (Kettl, 1993); for management of
prisons and the delivery of services within prisons (Allen, 1989); for information
technology (Globerman & Vining, 1996); solid waste collection services (Dilger,
Moffett, & Struyk, 1997); and a myriad of other public goods and services provided
on a daily basis. It is conceivable that many, if not all, government services and
programs are eligible for privatization. There are some services and programs,
however, that have over time and through trial proved more suitable for
governments to provide internally or purchase under contract with other
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governmental or nonprofit entities; services and programs such as police and fire
protection, child protective services, and judicial systems.
Change in service delivery has become a more common occurrence for
government over the past two decades. A model that has shown much success at
the federal, state and local level is contracting out. Contracting out as a tool, when
implemented correctly, can have lasting positive impact on organizations.
Government typically takes advantage of contracting out services and programs for
the purpose of optimizing efficiency and effectiveness. This dissertation offers a
comparative case study analysis of two municipalities that have implemented
contracting out for fire and medical aid services to non-profit regional fire
protection districts.
Municipalities that contract out to a regional service producer are trying to
take advantage of size, the desire to enhance service levels provided and to reduce
costs for services produced. Depending upon negotiations, a municipality can
either retain or dedicate its resources (employee and capital) to the contract service
performer. Decisions to enter into contractual relationships are likely to be
determined on economic grounds, in most cases for reducing general fund
expenditures. Contractual arrangements are also sought for operational and
structural purposes.
This descriptive, retrospective research study, uses a case-study method to
examine contracting out as a mechanism for bringing an organization into
convergence (alignment) based on “organizational structure and systems,
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organizational culture, tasks and workflows and human resources” (Tushman &
O’Reilly, 1997, p. 220). This dissertation also attempts to outline the successes and
failures experienced by two municipalities in contracting out fire protection and
emergency medical aid services to regional service producers. This experience has
enabled political and administrative officials to understand better the complexities
associated with contracting out. This dissertation also identifies key decisions
made during the policy-making process by regional service producers,
municipalities, and communities that contributed to successful and discordant
contractual relationships.
Conceptually, this dissertation suggests that contracting out is similar to a
puzzle (see Figure I) that relies on interlocking pieces that unite and create a
model. The numerous interlocking pieces are analogous to key contracting out
elements that this dissertation describes as economic worth, sound policy decisions,
administration, citizen participation and acceptance, and communication.
Conceptually thoughtful preparation, implementation, and post analysis are key to
contracting out success. The dissertation examines contracting out using
comparative case study analysis and a contract convergence approach.
Design Elements
1. A comparative analysis is done of the City of Oregon City’s decision to
contract out essential fire and medical aid services to Tualatin Valley Fire and
Rescue and the City of Milwaukie’s contractual relationship with Clackamas
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County Fire District 1 for the same services. In order to analyze organizational
convergence, collected data is integrated into a Contract Convergence Model
(see Figure 1).
2. The Contract Convergence Model (see Figure 1) is used to represent
contracting out for both municipalities which have similar populations and
budgets. Areas of resistance are identified that cause misalignment and
divergence (misfit or mismatch of key elements). Similar to a puzzle when
interlocking pieces are matched up with one another, the elements for Contract
Convergence align when economic, political, administrative, and citizen
expectations are satisfied. The data once organized into a Contract
Convergence Model underscore the importance of economics, a sound policy
making process, administration, citizen participation and understanding, and
communication when contracting out.
The Contract Convergence Model incorporates the City of Oregon City and
City of Milwaukie, Oregon’s pre and post-contractual political, administrative, and
community input data to establish alignments within the convergence model (see
Figure I). The data collected are analyzed for degrees of convergence, with the
proposition being that alignment of the key pieces provides a greater chance for a
successful contracting out situation.
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Measurement Techniques
What are the elements of convergence, and how can they be measured?
There are many tools available for conducting contracting out analyses. Core
research techniques for conducting this dissertation’s case studies consist of
interviews, gathering documents and archival records including consultants’ notes,
internal memoranda, and external correspondence from the cities of Oregon City
and Milwaukie and regional service producers, Tualatin Valley Fire and Rescue
(TVF&R) and Clackamas County Fire District 1 (CCFDl), and this researcher’s
insights and knowledge as a participant observer (Yin, 1994, p. 78-79).
Interviews/Inquiries
Open ended interviews/inquiries of key elected officials, administrators,
personnel, and citizens with knowledge of Oregon City and Milwaukie’s efforts to
contract out fire protection and emergency medical aid services are conducted to
gathering historical information, qualify accuracy of data and information
collected, and for clarification. The interview questions are not asked in a formal
interview setting, but are random inquiries solicited by this researcher as a limited
participant observer. The results then are used to corroborate documents and
archival information collected in the exploratory phase of this dissertation.
The questions noted in appendices A, B, and C, are purposely structured as
broad probes to allow the respondents the opportunity to provide candid and
thoughtful answers and expand upon and substantiate this researcher’s exhaustive
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documents and archival records collection. Direct quotes from respondents are
omitted in this dissertation to protect their candid responses and ensure
confidentiality.
Interviews with Oregon City, Milwaukie, Tualatin Valley Fire and Rescue
and Clackamas County Fire District 1 elected officials focus on policy. The
initiation of contracting out studies and subsequent contractual relationships
between Oregon City and Tualatin Valley Fire and Rescue and Milwaukie and
Clackamas County Fire District 1 began with these policy officials’ direction. This
direction was provided for specific reasons driven by economics, socio-political
factors, or a combination of both. As a participant observer, this researcher’s
questions were asked randomly in meetings of the Oregon City Commission,
Milwaukie City Council, Intergovernmental Council, and the contracting out Task
Force. Questions for elected officials focused on expected fire protection and
emergency medical aid service levels, economic incentives, and policy direction
(see Appendix A).
Administrative and personnel inquires focus on implementation of policy
directions provided by elected officials. This researcher asked questions to further
explain and clarify economic and socio political information and data gathered.
Interview questions were directed to Oregon City and Milwaukie’s city managers,
fire chiefs, Tualatin Valley Fire and Rescue’s Fire Chief and Chief Executive
Officer and Clackamas County Fire District l ’s Fire Chief and Chief Executive
Officer (see Appendix B).
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This research also incorporates additional socio political information and
data obtained through unprompted dialogue with Oregon City and Milwaukie’s
citizen involvement committee members, various neighborhood association
presidents, and citizens that actively participated in contracting out deliberations in
both cities. Questions were asked to more fully understand the extent and depth of
analyses Oregon City, Milwaukie, Tualatin Valley Fire and Rescue and Clackamas
County Fire District 1 undertook to provide public information regarding efforts to
examine and subsequently purchase contract fire protection and emergency medical
aid services (see Appendix C).
Documents and Archival Records
Documents and archival records collection for this dissertation was
comprehensive and exhaustive and began with securing public records related to
the cities of Oregon City and Milwaukie’s initial written correspondence to
Tualatin Valley Fire and Rescue and Clackamas County Fire District 1.
Documents and archival records were related to both cities inquiries to provide fire
protection and emergency medical aid services through regional service producers.
For the City of Oregon City case study, documents and records procurement
began at city hall. The documents and records were classified into three categories:
I) staff reports and internal memoranda and correspondence; 2) City of Oregon
City and Tualatin Valley Fire and Rescue correspondence; and 3) community
correspondence and media information. Examples of documents and archival
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records include: Oregon City Commission meeting minutes, city manager and city
fire chief correspondence and memoranda, Oregon City News/Clackamas Review
news articles, Intergovernmental Council (IGA) meeting minutes, Tualatin Valley
correspondence to City o f Oregon City, Oregon City Strength, Weaknesses, and
Opportunity Study, the adopted Intergovernmental Agreement between City of
Oregon City and Tualatin Valley Fire and Rescue, the adopted Intergovernmental
Agreement between City of Oregon City and Clackamas County Fire District I,
and the Vantage Consulting Report.
The City of Milwaukie case study utilized the same methods for analyzing
collected documents and records. Examples of documents and archival data for
this research include the adopted Intergovernmental Agreement between City of
Milwaukie and Clackamas County Fire District 1, Draft Emergency Services
Consulting Group Document, City Council work session notes, consultant
strengths, weaknesses, and opportunities analysis, city manager and fire chief
memoranda and council correspondence, Clackamas County Fire District 1 and
Oregon City Correspondence Summary, Clackamas County Fire District 1 Five
Year Strategic Plan (1999-2004), and Clackamas County Fire District I Standards
of Response Coverage Document.
Participant Observer
As suggested by Becker (1958, p. 652-660) the major problems related to
participant-observation have to do with the potential biases produced. Yin, in
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support of Becker, finds three concerns that should be addressed as a participant
observer: “first, the investigator has less ability to work as an external observer and
may, at times, have to assume positions or advocacy roles contrary to the interests
of good scientific practice; second, the participant-observer is likely to follow a
commonly known phenomenon and become a supporter of the group or
organization being studied; and third, the participant role may simply require too
much attention relative to the observer role” (1994, p. 89).
Becker and Yin’s statements are important. However, this researcher is
confident that advocacy and support for the outcomes reported in Chapter Six,
Principal Findings, Conclusions, and Recommendations, are fully supported in
Chapter Four, Case Studies, and Chapter Five Analysis of Case Studies, which are
based on multiple sources of evidence, a sound case study database, and detailed
chain of evidence.
This researcher’s role as a participant-observer in Oregon City’s discussions
and contracting out of its fire protection and emergency medical aid services to
Tualatin Valley Fire and Rescue was limited. Initial discussion of contracting out
fire protection and emergency medical aid services began in the late 1980’s and a
contractual relationship between Oregon City and Tualatin Valley Fire and Rescue
was established in July 1999. This researcher assumed the role of Oregon City’s
city manager and became a participant-observer in November 1999.
In 1997 the City of Milwaukie entered into a contractual arrangement with
Clackamas County Fire District 1 to produce fire protection and emergency
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medical aid services. This researcher’s participant-observer role was based upon
interviews of City Milwaukie and Clackamas County Fire District 1 elected
officials and personnel, documents and archival records for Chapter Four, Case
Studies, Chapter Five, Analysis of Case Studies, and portions of Chapter Six,
Principal Findings, Conclusions and Recommendations.
Research Techniques and Integration of Case Study Evidence
This dissertation applies three research techniques to explore and integrate
economic and socio-political theory and practice focused on contracting out,
explores the benefits and shortcomings of providing an essential public service
through a contractual relationship with a regional service producer, and compiles
elements essential for a successful contractual relationship. In conducting the
research, the researcher assembled descriptive and deductive explanations for
contracting out success and failure and provided a tool for analysis, a contract
convergence model, which can be used to assess the contractual arrangements and
the success of regional partnerships.
The research technique, offered by Graeme Hodge, provides a framework
for examining various dimensions of contracting government services by defining
dimensions as performance indicators, broken down into the following:
• Economic performance, economy, economic efficiency, financial returns,
increased competition, and private market development.
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• Social performance, promised benefits to the community for better services,
lower prices, and increased choice.
• Democratic performance, representing the extent to which processes remain
open for public action and collective citizen actions are enhanced.
• Legal performance, government performance in terms of legal appeals or
criticism from an independent umpire such as the ombudsman.
• Political performance, covers a multitude of possible performance areas such as
election results, fiscal management, increased business confidence, and reduced
corruption” (1999, p.457-458).
Tushman and O’Reilly (1997) developed a process for organizational
analysis. The authors’ build on managing organizational change, they focus on
critical tasks, power and politics, transition, culture, and people. Emphasizing
change as a crucial source of competitive advantage, these authors propose that
managing change involves moving an organization from its current state to its
desired future state through a transition period (Tushman & O’Reilly, 1997, p.
184). Successful implementation of change relies on three key elements, dealing
with the problem of power and politics, dealing with individual anxiety and
resistance, and maintaining control during the transition period (Tushman &
O’Reilly, 1997, p. 189).
Gilbert Siegel (1999) provides evaluative research generalizations from
various contracting out studies. Siegel’s condensed guidelines provide a base from
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which exploratory and evaluative data can be compared and referenced. The
following guidelines are abstracted from Siegel.
• Governments are subject to economic interests whether services are provided
internally or through contract.
• Governments frequently confront the dilemma of a political choice between the
unacceptability of contractor service quality and inability to afford high-quality
in-house services.
• Political influence can potentially threaten any realizations of economic gain.
• Poor quality of pre-contracting research by governments vitiates the worth of
decisions on contracting.
• Competition can reduce and control costs of services.
• Contracting may not improve service delivery when there is an unwillingness of
government to pay for clients who are difficult to serve.
• Contracting may not be cost-effective when there is a limited pool of potential
suppliers, when goals and standards are difficult to define, and/or when
technologies are uncertain.
• There is evidence that government service performance has not been improved
by contracting (1999, p. 373).
To develop a contract convergence model this dissertation shall integrate
open ended interview responses (inquiries), comprehensive data from the cities of
Oregon City and Milwaukie and regional service producers, Tualatin Valley Fire
and Rescue (TVF&R) and Clackamas County Fire District 1 (CCFD1), consultants’
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notes, internal memoranda, and external correspondence, with this researcher’s
insights and knowledge as a participant observer. Hodge’s, Tushman and
O’Reilly’s, and Siegel’s prescriptive evaluative research techniques informed the
construction of this researcher’s model. The contract convergence model, similar
to the force field analysis model and congruence models seeks to situate key
elements to create symmetry between the provider and contract producer of fire
protection and emergency medical aid services. The symmetry represents a win-
win situation economically and socio-politically for the provider, producer, and
community served. Convergence in this dissertation, then, relies on economics,
policy-making processes, administration, citizen participation and acceptance.
The Contract Convergence Model, as offered by this researcher, also draws
from co-alignment qualities (Thompson, 1967). Thompson’s administrative co
alignment theory posits that organizational unification is influenced by powerful
internal and external environmental forces. Organizational survival then, requires
adaptive as well as directive action in those areas where the organization maintains
discretion (Thompson, 1967, p. 148).
This researcher’s Contract Convergence Model’s politics and administration
element focuses on an ability to adapt and provide and accept directive action. This
dissertation examines contracting out of fire protection and emergency medical aid
services to regional service producers and relies greatly on politics and
administration in constructing and implementing a successful contractual
relationship. Similarly, Thompson indicates that administrative co-alignment
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consists of environmental changes and the administrative process must deal not just
with which domain, but how fast to change the design, structure, or technology of
the organization. The organization must conform to the “rules of the game” or
somehow negotiate a revised set of rules (Thompson, 1967, p. 148).
Three separate techniques will be used to examine the concept of
contracting out. The first involves exploration consisting of an in-depth literature
review and collection of pertinent data. To assist with engaging the exploration
and data-gathering phase of the dissertation this writer subscribes to Tushman and
O’Reilly’s rules of congruence as important tools and guides that offer insights for
diagnosing and solving problems.
Rules of engagement are roughly defined as follows:
1. Be clear about the unit of analysis; that is, who owns the problem. What is
controllable and what isn’t?
2. If the strategy emphasizes the wrong product or service, to the wrong market,
with the wrong technology and bad timing, no amount of organizational
problem solving can help. Tight alignment with the wrong strategy ensures
quick failure.
3. Comprehensive diagnoses are necessary.
4. For any diagnosis, there may be many possible interventions. As such, there is
no single best solution. Rather, the question is what set or combination of
components needs to be changed to achieve congruence?
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5. Sometimes, a diagnosis shows that the root causes o f the performance gap are
beyond the control of the focal manager.
6. The congruence approach emphasizes gathering data prior to taking action.
7. Successful problem solving is a function of both what managers do and how
they do it. Effective managers do the right thing and do it well. Knowing what
to do is half the solution.
8. Disciplined problem solving occurs from one’s actions and is associated with
greater effectiveness over time (1997, pp. 77-79).
Once the exploration and data gathering phase of this dissertation is
complete, evaluative case study analyses are performed. Finally, Oregon City and
Milwaukie’s contractual relationships are critiqued and evaluated to answer the
overarching question of why contracting out is successful in some cases and
unsuccessful in others, and what empirical generalizations and conditions are useful
when considering contracting out.
Contract Convergence Model Explained
The framework for the Contract Convergence Model integrates four key
components for establishing a successful contracting out situation for
municipalities. Achieving convergence (see Figure 1) involves alignment of the
four interdependent elements, policy and administration, contract duration (time),
community involvement and participation, and economics.
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Convergence occurs when the four interdependent elements align and come
together, which is achieved in the contractual relationship between the City of
Milwaukie and Clackamas County Fire District 1 (see Figure 2). Non-convergence
is exemplified by the City of Oregon City and Tualatin Valley Fire and Rescue
contractual relationship (see Figure 3), where contract duration (time) and
economics are misaligned, creating a situation less likely to succeed.
This researcher defines convergence as contract viability with respect to
economics, socio-political factors, community, and contract duration. The
interconnectedness of all four elements is time dependent and is not to be confused
with contract duration. This assertion is based upon the premise that the four
interdependent elements require in-depth analysis prior to contract establishment
and implementation. This researcher posits that the more thorough the analysis
performed on each element of convergence the greater the likelihood for
contracting out success. This dissertation provides evidence that supports the
convergence model and its elements.
Integration of the Contract Convergence Model
As the Oregon City Commission, the policy-making body for Oregon City,
contemplated contracting out fire protection and emergency medical aid services to
a regional service provider, a simple economic model of benefit cost analysis was
implemented to determine potential impacts for such an organizational change.
The economic model developed by Oregon City and Tualatin Valley Fire and
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FIGURE 2. Milwaukie, Oregon/CCFDl Contract Convergence Model2
Policy and
Administration
Contract
Duration
(Time)
Community
Involvement
and
Participation
Economics
2 The City of Milwaukie Contract Convergence Model indicates a stable contract situation as all
four elements of convergence are aligned and fit together.
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FIGURE 3. Oregon City/TVF&R Contract Convergence Model3
Policy and
Administration
Community
Involvement
and
Participation
Contract
Duration
(Time)
Economics
3 The Oregon City Contract Convergence Model indicates an unstable contract situation as contract
duration (time) and economics remain are not aligned and do not fit together with policy and
administration and community involvement and participation. Oregon City adequately addressed
policy and administration and community involvement and participation as they are aligned.
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Rescue’s (Oregon City’s Contract Fire Protection and Emergency Service Provider)
policy-makers and administration, provided limited analysis, essentially ignored
key elements and avoided community consensus and administrative
recommendations. This simple model’s key function was to serve as a mechanism
for transfer of internal financial and operational responsibilities o f fire protection
and emergency medical aid services to a regional service district.
Similar to Oregon City and Tualatin Valley Fire and Rescue, the City of
Milwaukie and Clackamas County Fire District I (Milwaukie’s Contract Fire
Protection and Emergency Service Provider) entered into a contractual for fire
protection and emergency medical aid services primarily for economic reasons.
Although policy-makers and administration for both entities evaluated economic
and socio-political interests, no specific model was applied to aid in the contracting
out process. This dissertation notes that many contracting out efforts are planned,
implemented, and analyzed, without models for reference.
The Contract Convergence Model is offered as a tool for analysis that can
be used to assess the contractual state of both cities and services and the success of
regional partnerships. These case studies and analyses identify important criteria
municipalities should consider when contemplating or implementing contracting of
services to a regional service provider. The analysis of these two comparable cities
and their contracting out to regional service providers will help explain why
contracting out to regional governance may be successful, but not if there is a lack
of congruence.
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CHAPTER 4
FIRE PROTECTION AND EMERGENCY MEDICAL AID
SERVICES IN OREGON CITY AND
MILWAUKIE, OREGONCASE STUDIES
Introduction
The purpose of this chapter is to provide a detailed narrative of the
development, implementation, and outcomes of contract fire protection and
emergency medical aid services for the cities of Oregon City and Milwaukie,
Oregon. The chapter is structured to first provide an overview of the parameters
enabling Oregon City and Milwaukie to provide contract for fire protection and
emergency medical aid services through regional service producers, Tualatin
Valley Fire and Rescue and Clackamas County Fire District 1, respectively.
Next, a chronological account of fire protection and emergency medical aid
services for each city is provided. Integration of open-ended interviews, documents
and archival data, and participant observer perceptions and knowledge, are
collected to present a detailed account for the cases studied. Finally, a
comprehensive examination of both cities’ intergovernmental agreements with
regional fire protection and emergency medical aid service producers is performed.
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Overview of Case Studies
Two Oregon cities, Oregon City and Milwaukie, provide fire and rescue
services through contractual arrangements with regional service districts, Tualatin
Valley Fire and Rescue (TVF&R) and Clackamas County Fire District I (CCFD1),
respectively. Both cities are able to provide contract fire and rescue services as per
Oregon Revised Statute 190.010. Oregon City in July 1999 entered into a four (4)
year contractual agreement with TVF&R and Milwaukie in December 1997 entered
into a ten (10) year contractual agreement with CCFD1.
Both agreements enable TVF&R and CCFDl to provide twenty-four hour
fire protection and emergency medical services in concert with one another to
Oregon City, as both TVF&R and CCFDl’s geographic service area boundaries
overlap Oregon City. This does not apply in the case of the City of Milwaukie
however, as its city limits and service area are not contiguous with TVF&R
regional service area boundaries. In the Oregon City case, it receives fire
protection and emergency medical services through an Intergovernmental
Agreement (IGA) with both TVF&R and CCFDl, with mutual aid agreements in
force creating an overlapping city/county area for both service district providers.
The decision of both municipalities to contract out fire protection and
emergency medical services results from common objectives and intentions. First,
the cost of providing municipal services with general fund monies is financially
becoming more difficult as personnel, materials and services costs, and capital
expenditures escalate more rapidly than revenues. Second, municipalities
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nationwide are experiencing an increasing number of situations where voters
overwhelmingly approve general fund tax cut measures that impede efforts to
provide and expand services to meet growing community needs. The ‘do more
with less’, ‘become more efficient’, and ‘cut government waste’, philosophies are
being felt by all levels of government when considering expenditures and
developing annual budgets.
Specifically, in the State of Oregon, services such as fire protection and
emergency medical services are feeling the adverse impacts of providing public
services and programs in an era of strict revenue and expenditure control. Like
other states throughout the nation, there appears to be overwhelming voter intent in
Oregon to reduce taxes and even eliminate some forms of government revenues.
The most common sentiment among Oregon voters is to reduce property taxes,
which serve as a vital revenue source for municipal governments in their provision
of public services such as police and fire protection, libraries, parks, and recreation
programs.
Oregon tax laws have changed dramatically in the past 15 years. Measure 5
was the first tax initiative in Oregon that caused significant changes for State and
local governments. Measure 5 established that the maximum tax that could be
collected from each property could not exceed $5 per thousand dollars assessed
value for school districts and $10 dollars per assessed value for all other local
government units, excluding bonded indebtedness. If taxes exceeded the $15 per
thousand dollars assessed value in a municipality or district, compression would
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occur and the taxes collected would be reduced so that the total taxes collected
would not exceed the $15 limit.
In November 1996, Oregon voters approved Measure 47, limiting property
taxes imposed on property owners. Measure 47 requires voter approval for new or
increased property taxes and further restricts certain alternative means by which
state or local governments could raise revenue in lieu of property taxes. More
specifically, “Ballot Measure 47 directs that revenue reductions arising as a result
of these tax limitations be implemented so as to give priority to public safety and
public education, and to minimize loss of local control of cities and counties to
state government. Further Ballot Measure 47 prohibits using new or increased fees,
assessments or other charges to pay for government services and products
previously funded by property tax revenues, unless a new or increased fee,
assessment or charge has been approved by voters” (Voters Pamphlet, Explanatory
Statement, 1996). To make revenue capture more cumbersome for governments,
Measure 47 also imposes a fifty-fifty rule, “property tax levies that have been
approved by 50 percent or more of voters voting on the question in a general
election in an even-numbered year, or by 50 percent or more of voters in any other
election provided at least 50 percent of eligible voters cast a ballot” (Voters
Pamphlet, Explanatory Statement, 1996).
Oregon State’s Budgets since Measures 5 and 47 show substantial losses in
property tax revenues for cities in Oregon. Property valuations are limited; they
may be increased by three percent each year. In 1997, Oregon voters were
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presented with and subsequently approved in a statewide special election, Measure
50, adding to Measure 47, a maximum assessed value of real property and directed
the Legislative Assembly to generally reduce property tax levies by an average of
17 percent. Measure 50 creates an additional property tax burden for cities and
counties and adds further limitations on a taxing district’s ability to impose local
option property taxes to five years or ten years, if used to fund capital projects,
while adhering to Measure 47 fifty-fifty requirements.
It is debatable whether government agencies in the United States have been
successful in addressing or meeting the demands of the public to reduce spending,
become more efficient, and reduce waste, but the reality of providing services with
limited resources is factual. Specifically in Oregon, Measures 47 and 50 have
caused a tremendous backlash for citizens as a result of unmet expectations with
respect to adequate public safety services, parks and recreation programs, library
services, and other general fund services and programs.
Numerous academic and practical studies and analyses are available for
review and consideration, identifying opportunities that can be employed to meet
the growing demand for public services and provide efficient and effective services
on limited budgets. One such opportunity continuously examined and offered as a
reasonable method for providing general fund financed public services and
programs in light of fiscal limitations is contracting out or outsourcing. The cities
of Oregon City and Milwaukie, located in Clackamas County, Oregon rely upon
contracting out for fire protection and emergency medical services.
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Historical Context of Fire Protection and
Emergency Medical Service in Oregon City
The Oregon City Fire Department (OCFD) is rich in heritage. Recognized
as the oldest fire department in the State of Oregon, OCFD’s formation was
authorized by the Oregon City Commission in 1853. Appointment o f the first fire
chief, then known as a “chief engineer,” occurred before the State o f Oregon was
admitted to the Union. OCFD is credited with drafting the first fire prevention
ordinance in the West in 1854, just ten years subsequent to municipal
incorporation. OCFD, in the 1920’s, began providing emergency medical services.
Oregon City’s current population is 27,695 (2000 Census), a significant increase
from the 1990 census of 13,826. Oregon City encompasses approximately 7.4
square miles and is the County seat for Clackamas County; its population growth
strongly reflects residential and commercial growth, with scattered industrial
development.
Significant challenges facing Oregon City in providing fire protection and
emergency medical services date back to 1990 when Oregon City voters rejected a
request for a local option tax levy to supplement the City’s general fund. These
monies were needed to prevent potential staff reductions that would result in
limited operation of the City’s Fire Department, it was to be reduced to operating
only one of its three fire stations with only two firefighters per shift. During the
campaign for the 1990 levy, the local newspaper, the Daily Enterprise Courier,
suggested that “a reduction to two firefighters will not allow operation of a fire
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engine, so the two firefighters might have to show up at some fire scenes with a
ladder or rescue truck, both vehicles that can’t pump water” (Andrew Oman, Daily
Enterprise Courier, August 7, 1990). Informational flyers prepared to educate
voters stated that failure of the local option tax levy would result in the loss of three
positions from the fire department, “resulting in reduced capability for fire
suppression and prevention” (Andrew Oman, Ibid., August 7, 1990).
Oregon City’s desire for fire protection and emergency medical services
funding increases was in response to its growing population and greater demand for
services. Between 1988 and 1990, OCFD’s number of fire and medical aid
responses increased by twenty percent. Although potential staffing level reductions
would not necessarily result in delayed response times for fire and medical aid, the
City’s Fire Chief noted, “There remained a possibility that one of the three fire
stations being short-handed, might result in delayed response of specific fire
fighting apparatus” (Oregon City Fire Chief, Letter to City Commission, June 26,
1990).
OCFD participates in, as do many fire departments throughout the nation,
mutual and automatic aid agreements to ensure appropriate response to major
emergencies. In 1991, Oregon City entered into an IGA with CCFDl as the City
realized an emerging need to enhance existing fire protection and emergency
medical service to better serve its community. The 1991 IGA served two purposes:
“to provide mutual fire and medical aid services to a recently annexed County
service area; and to enable the City to provide first response services in the
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expanding south area of the City” (Oregon City Fire Department / Clackamas
County Fire District 1 Intergovernmental Agreement, June 1991).
In 1992, Oregon City’s Fire Department sought the services of Vantage
Consulting to establish OCFD’s mission, define values, and identify its strengths
and weaknesses. The central theme of Vantage Consulting’s report was to,
“provide consistent services within Clackamas County and further study
opportunities to ‘consolidate services,’ recognizing that such a recommendation
may be viewed as an opportunity, but perceived as an external threat” (Vantage
Consulting Report, 1992). Regardless of perceptions and the arguments of local
versus regional control of services, subsequent to Vantage Consulting’s findings
OCFD and CCFDl’s Fire Chiefs began discussions of engaging CCFDl to provide
all fire protection and emergency medical services in Oregon City.
In January 1993, the Oregon City Commission approved an amendment to
the 1991 IGA, between the City and CCFDl in order to provide expanded regional
fire protection and emergency medical services in Oregon City and allow the City
to finish the construction and equipping of two fire stations in the east and south
areas of the City. Further, the 1993 amended agreement called for OCFD and
CCFDl to redefine service response areas for the region without regard to
jurisdictional boundaries in order to employ the closest fire station for response.
The amended agreement was to be implemented upon completion of construction
and equipping of the two fire stations and remain in effect for five years, with one-
year renewal options.
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Three years later, in 1995, OCFD’s Fire Chief returned to Vantage
Consulting’s final report and implemented another element of the report, the
establishment o f a Community Focus Group with a mission to provide external
review and analysis of OCFD’s provision of services, staffing levels, and long
range plans. The Community Focus Group, consisting of ten citizens, identified
critical service delivery and strategic plan issues notwithstanding perceptions that a
cooperative agreement might entail an external threat to OCFD and a potential loss
of local control of one of the City’s essential departments. Specifically, of concern
to the Community Focus Group was “that two engine companies were not
sufficient to respond to simultaneous emergencies. The group suggested that
perhaps a regional special service district consisting of OCFD and CCFDl might
provide more effective and efficient fire and medical aid services. The focus group
acknowledged the loss of local control” (OCFD Community Focus Group meeting
minutes, 1995).
In response to the Community Focus Group’s findings OCFD’s Fire Chief
prepared a memorandum to the Oregon City Commission that maintained OCFD’s
plan would allow the City flexibility in allocating general fund monies and enable
the molding of the department around unique City values and needs, and at less
cost. Further, the memorandum suggested a financial difference in favor of OCFD
indicating that consolidation of services into a regional special service district
would cost significantly more than maintaining the City’s own fire department.
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A further outcome of the work completed by Vantage Consulting was a
five-year strategic plan for OCFD, covering the periods of 1996 through 2001. A
draft strategic plan recommended that a fourth fire station be constructed in Oregon
City to better serve the growing community’s needs. With construction of a fourth
station there would be a need to add nine career positions to meet additional
staffing needs. The draft strategic plan suggested, “Oregon City should evaluate
consolidation with CCFDl as it looks into the future; but in constantly evaluating
such an option, and while CCFDl offers fine services, there is, at this time, no
financial benefit to the City, which would relinquish control of this vital urban
service” (Draft Strategic Plan, OCFD, 1996).
In November 1996 a Citizen Review Committee was formed with a primary
goal of developing a customer centered strategic plan. By March 1997, that
committee identified the following areas of customer concern:
• Inadequate number of fire personnel to provide effective and efficient services;
• A need to improve methodology for delivery of training to career and volunteer
fire personnel;
• Isolation of fire and medical aid services and non-participation in regional
activities;
• Inadequate information dissemination to the public regarding OCFD programs,
services and needs;
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• A need to improve OCFD’s appearance within the community, specifically
related to personnel and apparatus; and
• Lack of leadership within OCFD for its future.
Given the expressed citizen concerns, OCFD responded with the following
recommendations:
• Build and staff a fourth fire station in Oregon City to address response times
and provide adequate levels of personnel to staff all fire stations;
• Hire a training officer to provide professional training to career and volunteer
OCFD fire personnel;
• Actively participate in regional specialty teams, such as Drowning Accident
Rescue Teams (DART) and Water Patrol;
• Purchase modem fire fighting equipment that will reduce the City’s ISO Rating
Classification; and
• Hire additional personnel to provide strong direction for day-to-day fire
fighting operations.
In April 1997, the Citizen Review Committee approved an OCFD Strategic
Plan incorporating the above issues and recommending that OCFD work closely
with neighboring regional fire protection and emergency medical service
jurisdictions in order to further develop strategic alliances and continue exploration
of future services being provided by CCFDl, and/or TVF&R. In addition, Oregon
City’s Fire Chief was directed to proceed with a proposal to construct and staff a
fourth Oregon City fire station.
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In August 1997, the OCFD Fire Chief presented to the Oregon City
Commission a proposed budget and staffing plan for the construction and manning
of a fourth fire station. The budget for fire station construction was set at $1.4
million. At that time, city staff estimated current general fund monies were
available to staff the station when construction was completed. Within a week of
the presentation, CCFDl’s Fire Chief presented Oregon City with a proposal to
provide regional fire protection and emergency medical services to Oregon City in
concert with Oak Lodge, a rural service area within CCFDl’s regional service area.
Initiation of this proposal arose from discussions between OCFD’s Fire Chief,
OCFD’s Fire Marshal, and CCFDl’s Fire Chief regarding consolidation of regional
services through either a joint service agreement or annexation into CCFDl. This
group agreed to objectively examine efforts to efficiently and effectively locate
future fire stations and personnel necessary for twenty-four hour staffing needs.
October 1997 saw the termination of efforts to achieve some measure of
functional or administrative efficiencies among fire protection and emergency
medical services as both OCFD and CCFDl realized the complexities of
consolidating three cities and one regional service provider. In a letter from
CCFDl’s consultant who was hired to examine such a consolidation, it was noted
that, “there are barriers to successfully pursuing the project, despite interest
expressed by each city in developing some measure of consolidation, there are a
number of strongly held values or principles which would likely inhibit a consensus
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or implementation of possible scenarios” (Swanson Consulting Letter, February 15,
1997).
Summer 1998 brought forth significant changes for OCFD. Formal notice
from CCFDl to OCFD announced its redeployment of resources out of Oregon
City as per its amended 1993 IGA. Once professionally staffed by CCFDl
employees, Oregon City would now rely upon volunteer CCFDl staff for its east
division station. That same summer Oregon City commissioned Moore
Information, to conduct a detailed public opinion survey on all city services. With
respect to fire protection and emergency medical services, respondents gave OCFD
“an average of eight on a scale of one to ten, with one being poor and ten excellent”
(Moore Information Report, March 1998). The survey noted, “while voters
recently approved a bond measure to build a fourth fire station in Oregon City,
when asking respondents if they would support a local option levy for staffing of
the new station, 51% strongly support, 29% somewhat support, 14% would not
support such a measure, and six percent were undecided” (Ibid., March 1998).
CCFDl’s decision to change its service delivery model, from professional
to volunteer staffing in Oregon City was considered a violation and breech of
contract by Oregon City officials. Dismayed with CCFDl’s decision, Oregon City
sought a fire protection and emergency medical service delivery proposal from
TVF&R, a neighboring rural fire protection and emergency medical service district.
On hearing of this news and after five months of negotiations with CCFDl, CCFDl
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rescinded its latest proposal and resumed professional staffing in Oregon City’s
third fire station.
In December 1998 TVF&R introduced its service delivery proposal to
Oregon City officials. City staff performed a financial analysis of TVF&R’s
proposal, and in January 1999 Oregon City’s Commission, manager, and legal
counsel developed a proposed IGA to allow TVF&R to provide fire protection and
emergency medical services in Oregon City. The IGA included staffing and
operations of two of three fire stations in Oregon City, the option to staff and
operate the fourth fire station once constructed, as well as a future opportunity to
annex Oregon City into TVF&R’s service district.
On July I, 1999 TVF&R began serving Oregon City through a four-year
IGA. Within that period, Oregon City and TVF&R would mutually support efforts
to annex the city into TVF&R District, placing full control of Oregon City’s Fire
Department under the auspices of TVF&R, a rural fire protection district.
Intergovernmental Agreement (IGA) Between
Oregon City and Tualatin Valley Fire and Rescue (TVF&R)
The structure of the IGA between Oregon City and TVF&R is established
through Oregon Revised Statute 190.010, which enables municipalities to legally
provide specific public services through contractual arrangements with other
governmental organizations. This arrangement is not uncommon throughout the
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nation. Many cities pursue formal arrangements with other public or private
entities to provide public goods and services.
The IGA confirms that Oregon City desires to contract fire protection and
emergency medical services to TVF&R, that TVF&R has the capabilities and
capacity to provide such services on a contractual basis, and that both parties agree
to enter into a short-term IGA to explore the feasibility of future annexation of the
territory within Oregon City to TVF&R’s District. In consideration of the above,
under the scope of service of the contract TVF&R agrees to provide twenty-four
hour, seven day per week, fire protection and emergency medical services, with
TVF&R responsible for maintaining mutual aid and automatic aid agreements, fire
and life safety plan review and compliance with applicable federal, state and local
codes and ordinances, fire investigation and inspection responsibilities, educational
programs, related record keeping, participation within the community, and
emergency management services.
Compensation for the four-year IGA was based on TVF&R’s service
delivery proposal; the agreement includes all services identified by the scope of
services and provides staffing levels consisting of three firefighters per shift, or
nine firefighters per station. Compensation is based upon service delivery for two
stations for the first year, and three stations for the subsequent years. Since
inception of the IGA, Oregon City and TVF&R have agreed to two IGA
amendments, as the fourth Oregon City Fire Station will not be constructed until
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the fourth and final year of the four-year IGA. The IGA specifically excludes the
manning of the fire station located in Oregon City, served by CCFD1.
Oversight ofTVF&R service in Oregon City is provided for through an
intergovernmental council (IGC), composed of six representatives, two elected
representatives from Oregon City, two elected officials from TVF&R’s District,
Oregon City’s Manager or designee, and the TVF&R District Fire Chief. The IGC
“shall meet quarterly to receive information of interest to the parties and to make
recommendations to the governing bodies on policy relating to fire protection and
emergency services within Oregon City” (Intergovernmental Agreement, City of
Oregon City and Tualatin Valley Fire and Rescue, July 1, 1999). Quarterly
meetings continue to this date.
Effective on the first day of the term of the IGA, TVF&R assumed all
OCFD full-time equivalent employees. Negotiations between Oregon City and
TVF&R established salaries and benefits equivalent to positions at TVF&R, and in
exchange, OCFD employees accepted TVF&R personnel policies regarding hours
of work, vacation accrual, sick leave, and union policies and dues. All OCFD
employees were allowed to transfer accumulated vacation and sick leave hours.
Oregon City was responsible for these benefits and required to keep budget
appropriations for such accrued payout. At the point where the OCFD employee
transferred balances for vacation and sick leave are exhausted, TVF&R becomes
responsible for such payouts. As employment security for transferred OCFD
employees, the IGA includes return rights to OCFD if the four-year agreement
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expires, terminated, or if annexation into TVF&R’s District is not approved by
voters.
Regarding fire facilities, TVF&R is granted exclusive control and discretion
of use; however, the City remains in control of routine maintenance, property
insurance, utilities, and modifications and upgrades that are agreed to by both
parties. If the IGA is terminated or annexation cannot occur, TVF&R will return
possession of the facilities to the City. The facilities shall be in a condition equal
to, or better than, the condition when TVF&R assumed occupancy, less normal
wear and tear.
Fire and rescue apparatus and vehicles remain in control of the City, but on
loan to TVF&R for the duration of the four-year IGA, unless annexation into
TVF&R’s District occurs, at which time TVF&R assumes ownership of all fire and
rescue apparatus and vehicles. All routine maintenance and operating costs o f
apparatus and vehicles are included in the contract price, except for repairs or
replacement of equipment due to age. Again, except for normal wear and tear,
upon termination of the IGA, TVF&R agreed to return apparatus and vehicles in
condition equal to, or better than, the condition when TVF&R assumed
responsibility.
Communications remain in control of Oregon City, as do the costs for
dispatch services. All communication equipment, including regular maintenance
and upgrades, are bome by the City. OCFD communication, now under the
purview of TVF&R, continues to be through Clackamas County’s police and fire
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emergency dispatch services. Although TVF&R maintains and operates its own
communication system, it is incompatible with OCFD and its neighboring
jurisdictions including CCFD1, as the primary response for TVF&R’s District is
Washington and Mutnomah Counties, Oregon. Oregon City pays for fire and
emergency medical service communication; however, annexation into TVF&R’s
District will require such costs to be transferred to TVF&R.
Historical Context of Fire Protection and
Emergency Medical Services In Milwaukie
The City of Milwaukie is located in Clackamas County, Oregon, it was
founded in 1847 and incorporated in 1903. The City encompasses approximately
4.8 square miles and serves approximately 22,000 residents. Milwaukie is
primarily a residential community with moderate commercial and industrial
districts scattered throughout. Given the demographics of Milwaukie, local
businesses are supported by a population base significantly larger than the local
area population.
Prior to contracting for its fire and emergency medical services with
Clackamas County (CCFD1), Milwaukie employed 23 fire fighters to provide fire
and emergency medical services from two city owned facilities within the city
limits. According to City records, the desire to provide fire protection and
emergency medical services through a regional service provider, such as CCFD1,
began as early as 1983.
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In 1983 the City of Milwaukie and Oak Lodge held several meetings to
discuss options for providing efficient and effective joint fire and emergency
medical services for the two communities in Clackamas County. That plan known
as FIRESTOP initiated considerable discussions lasting four months, but it was
determined that FIRESTOP could not be implemented due to “lack of community
support” (Oregonian Article, 1984). In February 1984, the same month FIRESTOP
was shelved due to lack of support, Milwaukie began discussions about closing its
city hall fire station and consolidating services at its southeast station.
In December 1985, Milwaukie’s City Council adopted an Urban Services
Policy and began efforts to establish a Fire Protection Master Plan, which was
completed in January 1996. A Fire Protection Master Plan Committee concluded
with forty-three (43) recommendations for improving fire protection and
emergency services within Milwaukie’s city limits. Recommendations ranged
from enhanced training of fire personnel to relocation of fire personnel and
apparatus to better serve residents and businesses.
In February 1990, the Milwaukie Fire Chief developed a Fire Service Plan,
which examined and evaluated its existing service delivery model, capital, and
equipment condition. Upon completion of the Fire Chiefs findings, direction was
provided by the City Council to seek ways to improve its current delivery model.
Similar to the efforts documented in 1983, Milwaukie officials approached Oak
Lodge and CCFD1 to discuss various cooperative ventures to enhance fire
protection and emergency medical services.
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By November 1990 a formal fire service options report was presented to the
Milwaukie City Council for consideration. The formal report focused on three key
proposals: “(1) a South Metro Fire Marshal’s Office, which would serve as a
central administrative hub for fire protection and emergency medical service
delivery; (2) joint fire protection ventures, opportunity for the provision of regional
fire and emergency medical services via CCFDl; and (3) cooperative ventures for
fire apparatus maintenance, thus consolidating and hopefully controlling costs of
repair and replacement of essential equipment and vehicles, which implied
significant impact on Milwaukie’s general fund budget” (Milwaukie Fire Chief
Letter, February 1990). Also, during this time discussions with Oak Lodge and
CCFDl resumed to refine a consolidation of services proposal.
In January 1991, Milwaukie’s City Council and CCFDl’s Board entered
into an agreement to establish a South Metro Fire Marshal’s Office, implementing
the first of three options proposed in the November 1990 Fire Service Options
Report. This action initiated two-years of discussion and public works sessions and
produced an in-depth analysis of current fire protection and emergency medical
services; it also outlined the future of Milwaukie’s Fire Department and potential
cooperative ventures with Oak Lodge and CCFDl as prescribed by the Fire
Services Options Report.
An independent study group consisting of representatives from Milwaukie,
Oak Lodge and CCFDl was established in August 1992, to conduct a detailed
service, financial, and timeline analysis of regional provision o f fire and emergency
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medical services. A comparative financial analysis completed in December 1995
suggests that delivery of fire protection and emergency medical services through
CCFDl is most cost effective.
In February 1996, the resignation of Milwaukie’s Fire Chief led to an
opportunity for the City to reassess the November 1990 Fire Services Options
Report and act on the report’s second and third options, to focus on joint fire
protection ventures and develop a cooperative agreement for fire apparatus
maintenance. During this period the City Manager conducted a Strengths and
Weaknesses, Opportunities and Threats (SWOT) analysis and several critical issues
were identified: “consolidation with CCFDl; the need for two fire stations rather
than one; the restructuring of the organization as a whole, including job duties,
authority, responsibilities and internal and external relationships; resolution of anti-
government sentiments of citizens with respect to City services; and long term
funding of fire and emergency medical services” (City Manager Correspondence to
City Council, 1996).
The Council was presented with the SWOT in October 1996, and wishing to
pursue opportunities with Oak Lodge and CCFDl. The City of Milwaukie directed
the Emergency Services Consulting Group (ESCG) to audit Milwaukie’s Fire
Department, analyze fiscal impacts of service delivery options and recommend the
best course of action for future fire and emergency medical services.
The comprehensive report took more than six months to complete. The
ESCG evaluated nine different program areas within Milwaukie’s Fire Department,
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including: “management and administration, delivery system and deployment; fire
prevention and public education; facilities, apparatus and equipment; training;
capital planning; support systems; financial considerations; and recommended
future service delivery options” (ESCG Draft Report, 1997, p. 4). A critical
element of ESCG’s directive from Milwaukie’s Council and Administration was to
include the community in their analysis process. Contracting out fire protection
and emergency medical services to CCFDl is by its nature political and will have
long-term impacts, over more than ten years.
The final analysis by ESCG revealed, “Consolidation and/or merger of the
Milwaukie Fire Department into CCFDl is the most economical option from a cost
and service level analysis. Initial emphasis, however, should be placed on the
expansion of functional agreements which would include operational consolidation
and a contract for fire protection as a means to an end” (Ibid. 1997, p. 84).
Further, ESCG clarified that “cooperative services do not come without
challenges” (Ibid. 1997, p. 84). ESCG recommended that the Milwaukie Fire
Department and CCFDl adopt a joint vision that will lead to improved operational
efficiency and consistency which will ultimately pave the way to ultimate
integration of both agencies, into a regionally organized fire protection and
emergency medical services. To achieve regional services ESCG recommended
the following:
• Coordinated strategic planning efforts;
• The continuation of the current agreement for personnel coverage with CCFDI;
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• The continuation of the current agreement for administrative services with
CCFDl;
• Consolidation of dispatch functions for fire and medical services;
• Continuation of joint training and multi-company training programs;
• Continuation of unified fire prevention codes and programs;
• Development of a unified Emergency Medical Service delivery system;
• Development of unified operational procedures, policies, and protocols;
• Alignment of accounting and budgeting documentation process;
• Full operational consolidation of the departments, including personnel
integration (Ibid., 1997, p. 85).
ESCG also outlined a timetable for Milwaukie’s goal to consolidate
services with CCFDl. ESCG defined the timetable in three phases, short
(immediate to six months), mid (six months to one year), and long term (three to
five years). “Short-term recommendations involved functional consolidation, the
establishment of committees to address specific objectives including operational
and budgetary plans and develop and enter into an agreement by October 1997, to
address the day-to-day managerial decisions and operations, while developing an
appropriate method for integration of Milwaukie and CCFDl staff’ (Ibid. 1997, p.
86-87).
Within six to twelve months ESCG recommended that Milwaukie and
CCFDl enter into negotiations to sign a contract for fire protection and emergency
medical services with CCFDl. ESCG also recommended that the contract include
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closure of one Milwaukie fire station to reduce costs and overlaps of service areas
with CCFDl fire stations, thereby reducing expenses in personnel, materials and
services, and capital replacement. “The contract will provide the City with the
ability to continue to ‘control’ the level and types of services provided while at the
same time benefit from the savings resulting from the ‘pooling’ of resources.
Benefits will include, increased depth of services, the potential to improve the ISO
rating and reduce insurance costs to taxpayers, as well as increased emergency
scene efficiency and effectiveness” (Ibid. 1997, p. 86).
ESCG’s long-term recommendation was to negotiate the merger of the City
of Milwaukie into CCFDl through formal annexation. “In the event the contract
for fire protection proves to be a success the City may want to annex into CCFDl.
This would be a natural chain of events if the contract(s) prove to meet the financial
and service needs of the City over a period of time” (Ibid. 1997. p. 87).
Intergovernmental Agreement (IGA) Between Milwaukie and
Clackamas County Fire District 1 (CCFDl)
The structure of the IGA between Milwaukie and CCFDl is established
under Oregon Revised Statute 190.010, which enables municipalities to legally
provide specific public services through contractual arrangements with other
governmental organizations. This arrangement is like that of Oregon City and
TVF&R; it shares similarities with respect to structure, but differs in regards to
scope of services, compensation, planning and coordination, and annexation. The
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IGA states that Milwaukie desires to contract fire protection and emergency
medical services to CCFDl, that CCFDl has the capabilities and capacity to
provide such services on a contractual basis, and that both parties agree to enter
into a ten year IGA to explore the feasibility of future annexation of the territory
within Milwaukie to CCFD I ’s District.
In consideration of the above, the scope of services indicates CCFDl agrees
to provide twenty-four hour, seven day per week fire protection and emergency
medical services, with CCFDl responsible for maintaining mutual aid agreements
and automatic aid agreements, fire and life safety plan review, and compliance with
applicable federal, state and local codes and ordinances, fire investigation and
inspection responsibilities, educational programs, related record keeping,
participation within the community, and emergency management services.
Additional scope of services include CCFDl reviewing and proposing fire codes
and ordinances for adoption by the City and conducting studies for facility location
of future fire stations within Milwaukie.
The IGA between Milwaukie and CCFDl establishes compensation
somewhat differently than that of Oregon City and TVF&R. Specifically,
compensation is established through levels of service desired and mutually agreed
upon by both parties. “The City agrees that it will levy taxes during the term of this
Agreement sufficient to provide the payments required to be made to the District
during this Agreement” (City of Milwaukie and CCFDl IGA, 1997). Rather than
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establish a set fee for service, Milwaukie and CCFDl agreed to rate based levels of
service.
“A committee consisting of six representatives, two elected representatives
from Milwaukie, two elected representatives from CCFDl, the Milwaukie City
Manager and CCFDl Fire Chief will jointly consider policy development, budget
development, and financial aspects of the IGA” (Ibid. 1997, p. 84). The oversight
committee met monthly during the first year of the IGA and quarterly thereafter.
Quarterly meetings continue to this date.
Similar to Oregon City and TVF&R, Milwaukie and CCFDl agreed to
transfer all full-time equivalent employees to CCFDl. Negotiations between
Milwaukie and CCFDl established salaries and benefits equivalent to positions at
CCFDl. In exchange Milwaukie employees accepted CCFDl personnel policies
regarding hours of work, vacation accrual, sick leave, and union policies and dues.
Milwaukie employees were allowed to transfer accumulated vacation and sick
leave hours. Milwaukie was to be responsible for those hours and would be
required to keep budget appropriations for their payout. At the point where
Milwaukie employee transferred balances for vacation and sick leave are
exhausted, CCFDl becomes responsible for such payouts. As employment security
for transferred Milwaukie employees, the IGA includes return rights to Milwaukie
if the ten-year agreement expires, is terminated, or voters do not approve
annexation into CCFDl.
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Milwaukie’s fire protection and emergency medical services facilities and
equipment, in accordance with the IGA, become available for use by CCFDl
during the term of the IGA. Milwaukie retains ownership of its equipment and
facilities, CCFDl must take reasonable steps to maintain the City’s facilities and
equipment; however, Milwaukie at its discretion may purchase additional or
replacement equipment or request that CCFDl purchase such equipment on the
City’s behalf. Maintenance of facilities continues to be the responsibility of
Milwaukie, but routine maintenance of fire protection and emergency medical
service equipment and apparatus are the responsibility of CCFDl.
Communications, including dispatch services are provided for through
Clackamas County for both Milwaukie and CCFDl. All communication
equipment, including regular maintenance and upgrades, are handled by
Milwaukie. CCFDl communication is through Clackamas County’s police and fire
emergency dispatch services. Since Milwaukie and CCFDl maintain and operate
their communication systems through Clackamas County, both systems are
compatible. Fire protection and emergency medical service communications
become the responsibility of CCFDl upon annexation.
A caveat within the Milwaukie and CCFDl IGA is that both entities work
in concert with one another in regard to urban planning coordination. As a result,
Milwaukie and CCFDl “shall jointly consider planning, constructing and
maintaining service facilities within the City’s current and future urban growth
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management area” (City of Milwaukie and Clackamas County Fire District 1
Intergovernmental Agreement, December 15, 1997).
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CHAPTER 5
ANALYSIS OF CASE STUDIES
Introduction
Contracting out essential public services and programs at the federal, state,
and local level is a viable option for many governmental organizations.
Governments desire to contract out commonly stems from budgetary and/or
resource reasons. These municipalities cite as justification fiscal constraints,
monetary reductions, lack of technical labor skills, and limited or no availability of
fundamental raw materials for producing such services. An inability to produce
their own services is clearly evident in this dissertation’s case studies of two cities,
Oregon City and Milwaukie, Oregon that decided to provide fire protection and
emergency medical aid services through rural regional service producers, Tualatin
Valley Fire and Rescue (TVF&R) and Clackamas County Fire District I (CCFDl).
This dissertation examines and analyzes the dynamics of contracting out,
regional versus local control and the provisions for contracting out for these two
cities. Both cities are within the same county, have similar populations, and face
similar long-range service issues; but they have chosen to contract out with
different rural regional fire protection and emergency medical aid service
producers. This dissertation adds to and advances existing economic and socio
political theories of contracting out, augments current political and administrative
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thought and understanding of contracting out, and reveals effects and solutions
when contracting out fails to meet the expectations of a provider and producer.
An overarching question for this dissertation, is why? Why is contracting
out successful in some cases and unsuccessful in others, and what empirical
generalizations and conditions are useful when considering contracting out? If two
cities of similar populations, budgets, and within the same county contract out fire
protection and emergency medical aid services to two different rural regional
service producers, what structural and operational differences exist that effect the
outcome of entering into a contractual relationship?
Application of Researcher’s Convergence Model for Contracting Out
Livability is a key component in why people choose to live or conduct
business where they do. Individuals, groups, and organizations tend to value what
a community has to offer in return for payment of taxes. Schools, for example,
may be valuable for families with children while police and fire protection are
essential services for others. How one determines which community best serves
their needs appears to be based on a municipality’s thoughts regarding what
services it will provide and how.
A generalized conceptualization of citizens choosing which community to
be a part of and the community’s decision determining its services focuses on
income and expenditures, political environment, functional wealth (how well does
the city provide its services), citizen involvement and endorsement, population, and
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geography, to name but a few factors. It is these essential elements that have been
used to develop this researcher’s Convergence Model.
In the two case studies presented, both municipalities were able to develop a
methodology for analyzing and integrating contract services into their economic
and socio-political domain, over time. An effort to clarify such tasks forms the
basis for this dissertation’s convergence model. Similar to livability, convergence
in an organization, or municipality in this case, relies upon efforts of its actors and
the elements involved; for example, unification of a specific function;
responsiveness to the needs of those the municipality serves; and seamless
integration into the day-to-day activities of the people it serves. It is the
convergence of sound fiscal policy, politics, administration, and consumer (citizen)
acceptance that creates a successful contracting out environment.
In this chapter, the focus shifts to application of the convergence model.
The convergence model integrates fiscal policy, politics, administration, and
consumer satisfaction as causal factors in the success or failure of contracting out
fire protection and emergency medical aid services to regional service producers.
City of Oregon City/Tualatin Valley Fire and Rescue (TVF&R)
Facing continuous pressures to meet minimum acceptable local, state, and
federal (National Fire Protection Agency/NFPA) standards for personnel, Oregon
City consented, in 1998, to examining the contracting out of its fire protection and
emergency medical aid services. Given the geography of Oregon City, two viable
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requests for proposals were received, one from TVF&R and the other from
CCFDl. In July 1999, after careful consideration and much deliberation of
convergence elements identified in this dissertation, a contractual relationship was
established for fire protection and emergency medical aid services between
TVF&R and Oregon City.
Economic analysis
In 1999, Oregon City, in providing its own fire protection and emergency
medical aid services spent approximately $2.00 per thousand dollars of assessed
property value. The cost of providing such services internally was expected to rise
to approximately $2.85 per thousand dollars assessed property value by the year
2001. TVF&R’s Rural District, with its own tax rate, provided services for
approximately $1.50 per thousand dollars assessed property value, in 1999.
In July 1999, Oregon City began purchasing fire protection and emergency
medical aid services from TVF&R through a four-year contract agreement. The
City’s intent was to pay TVF&R for producing contract services for a four-year
period and pursue annexation into TVF&R’s District prior to that contract’s
expiration. Clearly, Oregon City benefits from annexing itself into TVF&R’s
District, assuming the City applies TVF&R’s tax rate and reduces its permanent tax
rate by an amount equal to the cost of providing internal fire protection and
emergency medical aid services.
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Unfortunately, economic analysis reveals no economic gain for either
organization when considering annexation into TVF&R’s District, given that there
is no permanent rate reduction for the consumers (taxpayers of Oregon City).
Annexation to TVF&R’s District results in a transfer of consumers’ tax burdens
from one taxing entity to another and payment of a supplemental tax from the City
to the District. This a direct result of Statewide Ballot Measure 50 (1997) that
prohibits a taxing authority from subsidizing annexations of taxable properties of
lesser value than currently within its jurisdictional boundaries.
Measure 50 also establishes tax bases and operating levies outside tax bases
for taxing entities by combining local tax bases within counties and applying the
combined rate to establish a permanent rate limit for all local jurisdictions within a
county. This measure affects each taxing entity’s ability to levy taxes. When a
jurisdiction approaches a determined maximum combined tax base and operating
levy, compression occurs and prevents a taxing entity from applying its permanent
rates in full. To effectively reduce the tax burden on Oregon City consumers, the
City would have to voluntarily choose not to impose a portion of its permanent rate
limit. In effect this is tantamount to reducing taxes by the equivalent amount of the
TVF&R permanent rate levy, minus a City’s supplemental tax rate required to
fulfill its financial obligation for paying for contracted fire protection and
emergency medical aid services.
An important element of economic analysis that neutralized incentives for
Oregon City is that annexing to TVF&R’s District requires compliance with an
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amendment to Oregon City’s municipal code that refers any annexations of
property to voters. During TVF&R’s fiscal analysis of annexation feasibility it was
contemplated that Oregon City would annex to its urban boundaries, thereby
generating a much needed property tax base for meeting the contract’s four-year
term and future annexation financial obligations.
Political and administrative analysis
As stated, economic analysis reveals a mutual consent by Oregon City and
TVF&R to enter into a four-year contract, setting annual costs sufficient for the
services provided Oregon City and produced by TVF&R. Further, both parties
share a mutual interest in seeing that within or by the end of the fourth year of the
contact Oregon City would seek annexation to TVF&R’s District.
In their efforts to make this contract relationship work, two key hurdles
were faced by Oregon City and TVF&R’s political and administrative bodies.
First, TVF&R had a policy that prohibited services from being provided for non
contiguous jurisdictions. This policy made production of services for Oregon City
dependent upon providing services to TVF&R’s neighboring jurisdiction, the City
of West Linn. This policy meant providing overlapping services with another
regional service producer that was currently serving areas within and surrounding
Oregon City, Clackamas County Fire District 1.
The option for TVF&R to produce fire protection and emergency medical
aid services for both cities, West Linn and Oregon City, was not originally
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envisioned, but it was deduced logically. If the City of West Linn agreed to
contract with TVF&R’s District and also agreed to seek annexation, then it was
reasonable to suggest that Oregon City, a contiguous jurisdiction, consider the
same. An agreement between the City of West Linn and TVF&R occurred two
months prior to the establishment of an Oregon City TVF&R contract. (Analysis of
the contracting process between the City of West Linn and TVF&R is not a part of
this dissertation; however, their negotiations and contract outcomes are similar to
those of Oregon City’s).
Prior to contracting with TVF&R, Oregon City provided fire protection and
emergency medical aid services both internally and through contract with CCFDl.
However, the latter existing relationship continued to face its own political
instability, not because of service deficiencies, but because of jurisdictional
boundaries. Original political and administrative thoughts for contracting out fire
protection and emergency medical aid services were based on enhancing CCFDl’s
ability to produce services for Oregon City as CCFDl’s jurisdictional boundaries
are contiguous and surround Oregon City. This arrangement did not require the
City of West Linn’s coordination and participation. In addition, CCFDl currently
staffs and provides services to Oregon City under a contract.
Community analysis
Community confidence is mixed regarding contracting out essential public
safety services. Oregon City is recognized as having the oldest fire department west
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of the Rocky Mountains and has a rich heritage. Contracting out has in effect
created a double-edged sword for City and TVF&R policy-makers and
administration as many citizens share sentimental reasons for retaining internal
control o f fire protection and emergency medical aid services. Citizens express
concern about a significant increase in the citywide permanent property tax rate
levy if maintaining other general fund services and programs would offset any
potential savings as a result of annexation to TVF&R’s District.
Another contentious issue involves the construction of a third fire station.
Oregon City voters approved bond funding in 1998 for this project that was to be
completed by Fall 2000. This project has not happened. Delays in the station’s
construction are a direct and purposeful result of a lack of fund availability to
provide full staffing of the new third station. TVF&R’s contract for staffing the
third fire station presents a significant expenditure increase that Oregon City cannot
pay for without reducing other general fund services and programs. This reduction
is a scenario Oregon City taxpayers are not willing to allow. It is the sentiment of
many citizens that 1998 bond approval occurred as a result of Oregon City’s
political and administrative assurance that funds would be available for full staffing
and operation of the third fire station.
Oregon City’s community is also divided regarding transfers of personnel
from Oregon City fire stations to other locations. Due to the size of TVF&R’s
organization, many Oregon City firefighters have chosen to promote within,
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causing personnel shifts and leaving Oregon City with new personnel unfamiliar
with Oregon City.
The strong presence of a formal Neighborhood Association has also
influenced the community’s decision to pursue contract fire protection and
emergency medical aid services with TVF&R. Entering into an agreement with
TVF&R was somewhat of a surprise (for political and geographic reasons) for at
least three of the twelve neighborhood associations. Many of the post contract
discussions among citizens and neighborhood groups include defining and
clarifying the logistics of entering into a contractual arrangement with TVF&R.
These citizens and groups question Oregon City’s having a new regional fire
protection and emergency medical aid services contractor when it is already
contracting for partial services with CCFDl.
Geographically, the cities of Oregon City and West Linn are divided by the
Clackamas River which makes TVF&R’s intra-departmental mutual aid efforts
difficult as there are only two modes for accessing service areas on either side of
the river, a historic two-lane bridge and a major interstate. A geographic analysis
indicates that contiguous service from CCFDl results in limited or no barriers to
serving Oregon City. Both organizations are located east of the Clackamas River
and CCFDi’s District is contiguous with and surrounds the City of Oregon City.
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Model integration and discussion
Compiling data into the Contract Convergence Circle Model shows that the
City of Oregon City and TVF&R are unable to meet criteria for economic, socio
political and community symmetry (see Figure 3). Contracting out is a dynamic
process that requires constant monitoring of costs, services produced, and
consumer satisfaction. Oregon City entered into a relatively short four-year
contract specifying level of services and actual costs. This arrangement has caused
financial problems for Oregon City and TVF&R. The community continues to
share unrest about a shift from an internal to a contract service delivery model; that
unrest also contributes to a sense of instability.
Divergence rather than convergence appears to be occurring in the
contractual relationship between Oregon City and TVF&R. Economic analysis
indicates that contracting out can be beneficial if Oregon City’s policy-makers
make a conscious effort to reduce the City’s permanent tax levy rate when they
annex to TVF&R’s District. The likelihood of Oregon City being able to reduce its
permanent rate without limiting other general fund services appears unpromising;
therefore, neither providing fire protection and emergency medical aid services
internally or through contract alleviates the fiscal burden that Oregon City policy
makers and administration must contend with.
Political and administrative analysis reveals that past actions and long
standing memories do adversely impact a fair and thorough analysis. As evident in
many policy decisions and administrative actions, impartial analysis has been
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limited and hardly scientific in its nature. Sound fiscal, procedural and
administrative decisions are sensible to those making such decisions. However,
those decisions are left to interpretation by those outside of the decision-making
process.
Community convergence is arguably less empirically demonstrable than
that of policy-making bodies and administration. The art of making genuine
decisions requires personal mastery, knowledge, and courage. Citizens and
communities are not always going to agree with policy decisions and administrative
determinations regarding what is paramount for a community, but through some
form of multifaceted composite analysis by elected and appointed community
leaders, decisions are made which citizens must tolerate until future elections
determine otherwise.
City of Milwaukie and Clackamas County Fire District 1 (CCFDl)
The City of Milwaukie’s explored contracting out of fire protection and
emergency medical aid services for reasons similar to Oregon City’s. Their
rationale was similar economically, but different politically and administratively.
Due to budgetary constraints the City of Milwaukie began to phase out positions
that provided administrative support for the fire department in favor of retaining
line personnel. Tax base compression caused Milwaukie to realize static general
fund revenues, at best. Forced to analyze its strengths and weaknesses, the City of
Milwaukie addressed numerous specific key issues related to its fire department.
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These issues included: (i) What are the roles of fire and rescue?; (ii) What
resources are needed to fulfill those roles?; (iii) How does the City ensure adequate
and stable funding to support these roles?; and (iv) What structure will best enable
it to fulfill those roles.
Economic analysis
The City of Milwaukie faced flattening revenues as a result of Statewide
Ballot Measures 5,47, and 50. The City of Milwaukie was facing a permanent
property tax rate of $9.98 per one thousand dollars assessed property value, just
two cents per one thousand dollars of assessed property value under the maximum
allowed. The City had little room for increasing general fund revenues. Without
an ability to raise property tax rates by an amount equal to the annual inflation
index, Milwaukie was forced to explore creative alternatives.
Further, in June 1996, Milwaukie acknowledged an imminent general fund
shortfall caused by the pending expiration in 1998 of a voter approved local option
levy supporting fire department operations. With a likelihood of future Milwaukie
voters would not approve an extension, the City faced a 1997/98 Fire Department
budget exceeding $3.1 million which is a cost of $2.97 per thousand dollars
assessed property value. In 1996 CCFDl’s permanent rate was at $2.19 per
thousand dollars assessed property value, prompting negotiations for an
intergovernmental agreement with CCFD1
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In 1996 the City of Milwaukie hired a consultant to analyze fire protection
and emergency medical aid services within Milwaukie’s Urban Service Boundary.
The outcome o f the consultant study revealed two viable financial scenarios: 1)
provide and expand internal services to meet current needs of consumers, and
increase the annual fire department budget to more than $5.6 million; or 2) allow
incorporation of urban service areas and contract with CCFD1 to produce
Milwaukie services for a cost of approximately $4.7 million. The latter scenario
would generate a savings of approximately thirty-four cents per one thousand
dollars of assessed property value for Milwaukie taxpayers.
Political and administrative analysis
In light of the consultant’s recommendations two critical decisions by the
City Council were made. First, a determination was made that internal fire
protection and emergency medical aid services must be transferred to CCFD1.
Second, a determination of the length of a contractual relationship with CCFD1
was made before annexation into its District. On December 15, 1997, the City of
Milwaukie entered into a ten-year contract with CCFD1 to provide citywide fire
protection and emergency medical aid services. The transition from internal to
contractual fire department services was relatively painless. The analysis of this
transition to CCFD1 was to span more than ten-years.
In addition, Milwaukie’s elected and administrative officials were
experiencing community pressure to formulate policies that ensured current levels
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of city services. These elected officials considered establishing a contract with a
regional fire protection and emergency medical aid service provider to be a
straightforward approach. This option was justifiable based on a number of public
discussions and studies addressing this matter. Duplication of overlapping
services, mutual aid agreements, and conflicting policies were noteworthy building
blocks for transitioning command and control of City resources including personnel
and equipment, to CCFD1.
An administrative aspect that assisted in a relatively trouble-free transition
involved establishment of a Milwaukie and CCFD1 management team responsible
for developing functional and operational transition plans. The City established
several internal ad-hoc committees charged with specific objectives. These
committees developed specific detailed operating and budgetary plans for the
unification of the agencies and day-to-day transitional plans for personnel
assimilation and procedural standardization. The latter action was attributed to
quickly identifying gaps in both organizations’ standard operating policies and
procedures, which if addressed properly would minimize political and community
concern and opposition.
Community analysis
A majority of Milwaukie and CCFD1 citizens were in agreement that
regionalizing fire protection and emergency medical aid services would be
beneficial to both the City and District. The City of Milwaukie initiated at least
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three community surveys before arriving at a policy decision to contract out fire
protection and emergency medical aid services to a regional service producer.
Specifically, community surveys and focus groups demonstrated that Milwaukie
wished to investigate opportunities that might be seized through a change in the
basic way the City provides fire protection and emergency medical aid services to
the community. Citizens favored a proactive approach to examining alternatives
and charting a fixture course for the Milwaukie Fire Department.
Clearly changes of this magnitude were seen at times as threats to
individuals or groups, but the City of Milwaukie had taken several steps over a
period of years to overcome traditional barriers to progress. The City’s
development of a Fire Protection Advisory Committee in 1986, a Revenue Review
Task Force in 1988 a Joint Fire Service Board in 1994, and numerous citizen task
forces clearly signaled the City of Milwaukie’s desire to fully understand a myriad
of fire protection and emergency medical aid service delivery models.
The general viewpoint of Milwaukie’s elected body, administration and
community was formulated into one statement, “the weakness of independent small
fire departments is their inability to provide sufficient administrative and support
services such as training, fire prevention, public education, and health and safety
programs. Small organizations lack the depth of services typical of larger regional
organizations that can provide the capability of response to simultaneous
emergency situations and incidences. Consolidation or merger o f organizations, if
properly implemented, can address administrative and support needs more
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efficiently and effectively” (ESCG, 1997, p. 87). Given the nature of this statement
and the content of ESCG’s comprehensive analysis, the City o f Milwaukie
determined that adequate community involvement occurred and a transition to
contracting out with CCFD1 was appropriate.
Model integration and discussion
Compiling data into the Contract Convergence Circle Model shows the City
of Milwaukie and CCFD1 to be meeting criteria for economic, socio-political and
community symmetry (see Figure 2). Contracting out is a dynamic process that
requires constant monitoring of costs, services produced, and consumer
satisfaction. This case study reports on an effective contracting out process that
anticipated costs for providing services well, established strong policy direction,
enabled administrative support to be provided, and conducted a successful
community outreach process.
Convergence in this case study analysis is occurring as a result of a
contractual relationship between the City of Milwaukie and CCFD1. The City
clearly took painstaking efforts to provide efficient and enhanced contract fire
protection and emergency medical aid services to the community after extensively
analyzing internal and contracting out options. Specifically, consultant notes,
internal memoranda, and external correspondence between the City and CCFDl
reveal the intense efforts by Milwaukie to provide adequate due process.
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The gathering and compilation of information was exhaustive and complete.
A detailed paper trail was constructed that enabled elected officials to establish
policy and direct administration to carry out that policy. The community accepted
this outcome with minimal reticence. A timeframe of ten-years in which to
contemplate annexation to CCFD1 has been provided. Thus far, an adequate
transition period has enabling both Milwaukie and CCFD1 to conduct ongoing
comparative analyses of internal versus contract services, integration and
acceptance of such services, and provided for community engagement in a regional
service producer environment. The ten-year timeframe also enables both
organizations to provide for regional strategic planning, address budgetary issues
and mandates, and align operational procedures, policies, and protocols. These
steps have made the potential annexation to CCFDl’s District manageable and
controllable if and when it is pursued.
Economically, the City of Milwaukie may face a situation similar to Oregon
City. If Milwaukie annexes to CCFD1, CCFD I will impose its permanent rate of
$2.40 per thousand dollars assessed property value on Milwaukie residents. This
action will force elected officials in Milwaukie to consider reducing its permanent
tax rate by some amount to compensate for imposing an additional property tax
burden on its community. If demand for general fund services continues to rise as
it typically does in growing communities, there is likely to be pressure for
nominally reducing the City’s permanent rate. Likewise, any reduction in the
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permanent rate that is less than that imposed by CCFD1 is likely to cause a political
backlash.
The tax rate decision will place a burden on future elected and
administrative officials when the time for annexation occurs. For Milwaukie, the
likelihood of original policy-makers and administrators being present throughout
this ten-year period is low, given that both case study cities have term-limit policies
in place for elected officials. Also, the average term of city management personnel,
according to city records, is three to five years.
Cooperation between the City and CCFD I in comprehensive planning, plan
amendments, periodic reviews, and amendments to land-use regulations within the
City’s Urban Growth Management Area will be advantageous for elected officials,
administration and the community. Cooperative efforts should ensure that CCFD1
integrates and coordinates operationally with the City on an ongoing basis
throughout the contract period.
Future annexation and the shift of property tax burden will have unknown
effects on the community until an annexation vote is taken and annexation occurs.
According to City of Milwaukie and CCFD1 officials annexation is approximately
six years away. This is enough time for diluting animosities and satisfying
objections by consumers (citizens) in opposition to this contractual arrangement.
The hope of this dissertation to capture all public sentiments for this case study has
not proven realistic. However, information that has been gathered discloses the
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City and CCFDl’s intense efforts to obtain public input at numerous junctures
throughout the contracting out process.
Outlook for the City of Oregon City
In September 2001, the City of Oregon City and TVF&R reexamined
options that best suit each organization. Three primary options for delivering fire
protection and emergency medical aid services were arrived at: I) re-creation of an
internal Fire Department; 2) negotiation of a long-term contract and future
annexation with TVF&R; and 3) negotiation of a long-term contract and future
annexation with CCFD1.
It was decided that re-creation of an Oregon City Fire Department, although
desirable, is not appropriate at this time. Until Oregon City becomes more of an
urban community that requires a defined urban level of fire and emergency medical
aid services, the City cannot justify its rebirth for financial reasons. Nonetheless,
because of the significant population growth over the past 10 years (1990, 2000
Census), the City has grown far too large to settle for less than urban levels of fire
protection and emergency medical aid services. Therefore, economically, the
City’s decision to contract out and consider annexation into a regional fire
protection district is deemed valid and appropriate.
Since the inception of this dissertation, the City of Oregon City and TVF&R
have come to a decision that contracting for fire protection and emergency medical
aid services will continue to provide the best affordable services. In this case, the
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decision does not diminish operational expertise, as both TVF&R and CCFD1 are
large urban service providers that produce fire protection and emergency medical
aid services at or above contemporary and professional standards.
Constraining Oregon City and TVF&R’s current contractual arrangement is
Oregon City’s geography, both agencies have geographic boundaries which are not
contiguous. Conversely, CCFD1 and Oregon City share a large contiguous
boundary making deployment of resources more effective. Future annexations of
unincorporated land by the City will create a need for further extensive
collaboration in cooperative fire protection and emergency medical aid services
between Oregon City and CCFD I. Finally, construction of a fire station in the
south area of Oregon City ensures adequate coverage of service areas for both the
City and CCFD1.
Complications also exist financially. Long-term, Oregon City must
consider the effects of a different tax rate for fire protection and emergency medical
aid services between TVF&R and itself. The City’s current and projected assessed
property value rate will not generate sufficient revenue at TVF&R’s tax rate of
$1.83 per thousand dollars of assessed property value to meet current operating
costs. In contrast, CCFDl’s tax rate o f $2.40 per thousand dollars assessed property
value will allow CCFD1 to recover its basic operating costs without requiring
additional supplemental payments from Oregon City.
Given such impacts, a mutual decision has been made by both Oregon City
and TVF&R to end their contractual relationship. A new contractual relationship
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for Oregon City with CCFD1 is anticipated by July 1, 2002. On that date, CCFD1
will assume responsibility for fire protection and emergency medical aid operations
and facilities in Oregon City. A contract will be established with a long-range plan
for Oregon City to annex to CCFDl’s District.
Outlook for the City of Milwaukie
As Milwaukie and CCFD1 enter into the fifth year of a ten-year contract
both entities continue to support contracting out to CCFDl’s District. Further
discussions regarding annexation, although identified and discussed in internal
memoranda and work session notes, have not been pursued by either agency in any
depth. At this point, it is unclear when and if annexation to CCFD1 will occur.
There appears to be little need to “disturb the apple cart” at this point in time.
Milwaukie shares the same concerns as Oregon City and TVF&R.
Annexation will inevitably result in permanent tax rate transfer discussions and
decisions. Moderate reductions to Milwaukie’s permanent tax rate may enable the
City to continue to provide general fund services at sustainable levels. It is not
unreasonable, however, to suggest that Milwaukie’s policy-makers and
administration will contemplate retaining some portion of its permanent tax rate
now being applied for fire service, to sustain or enhance other general fund
services.
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Comparative Analysis
A comparative analysis of both cities’ decisions to contract out fire
protection and emergency medical aid services reveals similarities and critical
differences. Economically, there is significant cost savings for both municipalities.
For Oregon City and TVF&R the passage o f State Ballot Measure 50 impedes
Oregon City’s opportunity to annex to TVF&R since supplemental tax rates cannot
be imposed to adjust TVF&R’s rate per thousand dollars assessed property taxes to
be equal to that of Oregon City. The City of Milwaukie and CCFD1 ’s decision to
renegotiate service levels and/or service costs on an annual basis has proven
successful. Disagreement regarding compensation does not void the contract;
however, it enables third party arbitration, which includes community participation.
Further, Milwaukie and CCFDl’s contract provides for a levy of taxes sufficient to
provide payments to CCFDl for services produced. Oregon City and TVF&R’s
contract identifies specific monetary payment for services. This substantive
difference becomes readily apparent when choosing to renegotiate levels of
services produced.
Policy formation and administration from city to city vary greatly. Oregon
City’s examination of contracting out fire protection and emergency medical aid
services dates back to the early 1990’s and consists primarily of administrative
analysis and supportive consultant analysis. Milwaukie’s examination of
contracting out fire protection and emergency medical aid services begins in the
early 1980’s and consists primarily of contract consulting efforts and limited
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internal administrative support in feasibility determination. The general realization
that a regional fire service producer has greater resources than internal department
to better serve each community was intrinsic in both organizations; however, their
political and topographic geography differed greatly and influence organizational
change.
Oregon City and Milwaukie reside in the same county, have similar general
fund budgets, and are similar in population size; but they differ dramatically in
service areas and demographics. Oregon City is divided physically by three
elevation levels, which include retail/commercial businesses at sea level elevation
at the confluence of the Clackamas and Willamette Rivers, a second elevation that
is primarily residential, and a third elevation approximately 500 hundred feet above
sea level, which consists of residential, commercial, and industrial. It is these three
physical elevations that make providing contiguous fire protection and emergency
medical aid services difficult. The City of Milwaukie has a relatively flat terrain
with an elevation close to sea level. The community consists o f residential, retail
commercial and industrial.
Geographically, Oregon City, the Clackamas County seat, is located nine
miles south of Portland, Oregon and is designated as a south metro regional
destination point with a daytime population estimated at double its current census.
Milwaukie is located two miles from Portland, Oregon; it is a regionally recognized
town center drawing core retail commercial and industrial clients from within its
city limits. Regional and town center designations have significance in
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determining regional traffic impacts, residential, commercial, and industrial
densities, and types of public services and programs provided.
Demographics show that Oregon City and Milwaukie have similar
population distributions. This researcher’s analysis of public participation finds
more neighborhood associations and citizen groups numerically, in Oregon City.
Likewise, Oregon City appears to have a stronger affinity for public participation.
This researcher’s interviews with neighborhood association presidents found
community recognition of fire and emergency personnel, fire personnel
participation in local events and attendance at neighborhood association and citizen
groups high. Three town hall meetings conducted by CCFDl for Milwaukie
showed dispatch of fire and rescue personnel to be of utmost importance to
citizens. Specifically, a survey of Milwaukie’s community showed citizens ranked
the sound of an emergency service vehicle siren subsequent to dialing 911 first and
foremost. Recognition of fire and rescue personnel in Milwaukie was given a low
ranking.
Analysis of service criteria for both cities and contractors finds response
times for fire and emergency service calls similar, averaging three to five minutes
per call during the contract period. TVF&R and CCFDl, within the parameters of
their contracts, provide residential, commercial, and industrial fire inspections,
provide for accident investigations, hazardous materials response, and swift water
rescue services. A significant difference, TVF&R provides for a District Fire
Chief, who reports directly to TVF&R’s Fire Chief, to serve as Oregon City’s
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liaison, whereas, CCFDl’s Fire Chief serves as a direct liaison to the City of
Milwaukie.
Case Specific Criteria for Contracting Out Fire Protection and
Emergency Medical Aid Services
A development of regional fire producer general service level criteria and
those specific for the Oregon City and Milwaukie are offered as considerations for
cities contemplating contracting out of fire protection and emergency medical aid
services to a regional service producer. This service level standard is a product of
an intergovernmental task force consisting of Oregon City’s city manager, Tualatin
Valley Fire and Rescue’s Fire Chief, and Clackamas County Fire District l ’s Fire
Chief.
General standards of response are divided into three response categories:
urban, suburban, and rural, and are determined by emergency response travel times
to structure fires and emergency medical incidents. Urban area designation is
appropriate for specific geographic areas that have a population greater than 9,000
or consist of a census tract having a population density greater than 2,000 people
per square mile. Suburban area designation is appropriate for specific geographic
areas that are non-urban, but are contiguous to urban areas and consist of a census
tract having a population density between 1,000 and 2,000 people per square mile.
Rural area designation is appropriate for specific geographic areas that are neither
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urban nor suburban, and have a population density of less than 1,000 people per
square mile.
Staffing considerations for contract fire protection and emergency medical
aid services depend on a combination of property and life-risks, which are
established to minimize loss. These factors can be separated into two basic types of
tasks, fire flow and life safety. Fire flow tasks are those related to extinguishing
fire. Life safety tasks are those related to finding and treating ill or injured people
and providing definitive emergency medical care, or rescuing trapped victims and
removing them from a building. The key to success at an emergency incident is
effective coordination and integration of both fire flow and life safety tasks. The
number and types o f tasks that occur in a given emergency will dictate the number
of firefighting personnel needed at different types of responses.
Community involvement is a key element for a regional service producer’s
integration into municipalities with a citizenry accustomed to municipal fire
protection and emergency medical aid services. A community liaison or public
information officer provides citizen access on a daily basis to the regional service
producer.
Emergency management and operations is also an essential function for a
regional fire protection and emergency medical aid service producer.
Municipalities’ potential exposure to a natural disaster is increasing worldwide.
Disaster preparedness operations plans and drills include community involvement
and performance measurement tools.
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Along with the above outlined services, hazardous materials, water rescue,
and technical rescue services are consistent with a regional approach to fire
protection and emergency medical aid services. Both Tualatin Valley Fire and
Rescue and Clackamas County Fire District 1 are qualified and capable of
providing such services.
Specific to Oregon City is a basic staff deployment plan for four fire
stations. Three stations will provide engine companies and one station will provide
a truck company. Each company will have a minimum staffing of three personnel.
A twenty-four hour seven day per week battalion commander is located at one of
the four fire stations. In consideration of service level demands, which are analyzed
on a monthly basis, additional resources will be provided within the city
boundaries.
A regionalization of fire protection and emergency medical aid services in
Oregon City requires a full-time senior chief officer. This senior chief officer acts
as the regional service provider’s liaison to Oregon City’s elected policymaking
body and city manager. In addition, there is a need to administratively support the
senior chief officer and three battalion chiefs.
Emergency medical aid services (EMS) staffing for Oregon City by a
regional service provider calls for one paramedic for each fire company, twenty
four hours per day seven days per week. The EMS staff is counted as one o f the
three personnel per shift or an additional staff person depending upon service level
demands, which are analyzed on a monthly basis.
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Geographic fire inspection zones are established by a fire marshal.
Frequency of inspections will include all ‘target hazards’ on an annual basis.
Target hazards are defined as nursing homes, hospitals, schools, and industrial
facilities that utilize hazardous materials or conduct hazardous operations. Oregon
City inspections o f general businesses such as office complexes and retail outlets
are inspected on a biennial basis. Inspection personnel for specialized services
such as fire cause and determination and specialized occupancy inspections are
available twenty four hours per day seven days per week.
Conclusion
This chapter first examined and analyzed the dynamics of contracting out,
regional versus local control of the provision for contracting out for Oregon City
and Milwaukie. Second, the application of this researcher’s contract convergence
model that integrating fiscal policy, politics, administration, and consumer
satisfaction as causal factors in the success or failure of contracting out was applied
in the two case studies presented. Finally, case specific criteria for contracting out
fire protection and emergency medical aid services are developed.
Chapter six addresses the principal findings, conclusions, summaries, and
research implications of this dissertation. Generalizations developed in chapter six
are intended address a gap in contracting out literature and research, extend
previous research, summarize the rationale for contracting out and regionalization
of municipal services, and offer this researcher’s contract convergence model as a
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tool that government managers and organizations can utilize to anticipate and
address pertinent economic and socio-political elements linked to successful
contract situations.
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CHAPTER 6
PRINCIPAL FINDINGS, CONCLUSIONS,
SUMMARY AND RESEARCH IMPLICATIONS
Introduction
This chapter presents the principal findings, conclusions, summarizes the
research results, and discusses research implications of this dissertation. First,
Hodge, Tushman and O’Reilly, and Siegel’s tools for contract analyses are
integrated into this dissertation to address a gap in contracting out literature and
research. Second, the conclusions reached in this dissertation’s case study analyses
assemble descriptive and deductive explanations for contacting out success and
failure, examining economics (fiscal stability), political and administrative purpose,
community, and contracting out performance, thereby providing the foundation for
the formulation and application of the Contract Convergence Model.
The conclusions reached provide a basis for generalizations that will be set
out in this chapter. These generalizations are intended to extend previous research.
This chapter will conclude by summarizing the rationale for contracting out and
regionalization of municipal services as a viable option for providing government
services. Further, this researcher asserts that the Contract Convergence Model is a
tool that government managers and organizations can utilize to anticipate and
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address pertinent economic and socio-political elements linked to successful
contract situations.
Principal Findings
This dissertation employs, in part, Hodge’s (1993) approach as a framework
for evaluating contracting out of fire protection and emergency medical aid services
for two municipalities. Hodge indicates that successful contracting out relies upon
“economic performance, economy, economic efficiency, financial returns,
increased competition, and private market development, social performance defined
as promised benefits to the community for better services, lower prices, and
increased choice. This dissertation also addresses: (i) Democratic performance,
representing the extent to which processes remain open for public action and
collective citizen actions are enhanced; (ii) Legal performance, government
performance in terms of legal appeals or criticism from an independent umpire such
as the ombudsman; and (iii) Political performance, which covers a multitude of
possible performance areas such as election results, fiscal management, increased
business confidence, and reduced corruption” (1999, p.457-458).
This dissertation builds upon Hodge’s contract research approach by
focusing attention on economics, socio-political factors, and time as key elements
for successful contracting out and regionalization o f municipal services. This
researcher also borrows from Thompson’ co-alignment theory, which posits
convergence are affected by environmental changes and the administrative process
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that must deal not just with which domain, but how fast to change the design,
structure, or technology of the organization (Thompson, 1967, p. 148).
Tushman and O’Reilly and Siegel provide prescriptive evaluative research
techniques that provide opportunity for integration and expansion of economics,
socio-political factors, and time to further develop the Contract Convergence
Model portion of this dissertation. As Hodge’s research helps formulate the
framework for this researcher’s Contract Convergence Model, Siegel (1999, p. 373)
provides evaluative research generalizations that lend validity to this dissertation’s
findings. Further, Tushman and O’Reilly’s (1997, pp. 77-79) rules of engagement
enable this researcher to integrate and define elements of convergence.
A case study approach is taken to contribute to the body of knowledge on
contracting of government services. This dissertation begins with an exploratory
stage, continues with a descriptive stage, and ends with an explanatory stage
(Reynolds, 1971).
In the exploratory stage, described in Chapter Two, the phenomenon of
contracting out by government agencies to other non-profit and private
organizations was studied. This examination found that contracting out in general,
and specifically for two Oregon municipalities, is based on economic and socio
political criteria. In Gilbert Siegel’s, “Where Are We On Local Government
Service Contracting” (1999), Siegel summarizes contracting out efforts as key
alternatives by which cities, counties, and special districts have attempted to cope
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with their problems of diminishing revenues coupled with unrelenting demands for
services and for service improvement.
Because contracting is an increasingly used alternative by local
governments, continuous monitoring of theory, practice, and results in service
contracting is worthwhile and therefore, worth discussing. It is widely
acknowledged that the precursors for contracting out of an essential public service,
such as fire protection and emergency medical aid services, usually include in-
depth internal and external analysis of fiscal and service delivery data.
Unfortunately, there is no clearly defined limit as to how much analysis is enough
when seeking to explain successful contractual relationships.
Chapter Four reflects the descriptive stage of this dissertation, examining in
detail two municipalities’ efforts in establishing contractual relationships with
regional service producers for fire protection and emergency medical aid services.
Oregon City and Milwaukie, Oregon in facing the unfavorable fiscal realities
experienced by many municipalities, explored service delivery options. Policy
direction was provided by elected officials concerned with restricted general fund
revenues as a result of voter approved statewide ballot measures. The objectives
for both municipalities were to find cost effective methods for providing general
fund services while improving the efficiency and effectiveness of their
governments and enhancing the quality of their customer services.
Once it was determined that contracting out was a viable option for both
cities, commencement of a myriad of political, structural, and operational
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proceedings ensued. The case studies seek to provide a deep understanding of the
implementation process. Implementation efforts for Oregon City prompted a
division among the Oregon City policy-making body and turmoil for TVF&R as a
producer of services. The affected community was unsure of and somewhat
opposed to change. These two contracts made as part of larger policy decisions
also meant the end to the oldest recorded internally run fire protection and
emergency medical aid service in the western United States. This in-depth political
and analytical appraisal will prove useful to any municipality contemplating
contracting out an essential general fund service to for profit and non-profit
organizations.
In comparative terms, contracting out of fire protection and emergency
medical aid services from the City of Milwaukie to CCFDl occurred with less
complexity and opposition. This is not to suggest that economic, political and
administrative, community obstacles were not present, but that they were overcome
or resolved to some level of satisfaction. Comparing and contrasting contractual
relationships between the City of Oregon City and Tualatin Valley Fire and Rescue
and the City of Milwaukie and Clackamas County Fire District I provides
important data that addresses this dissertation’s overarching question of why
contracting out is successful in some cases and unsuccessful in others, and what
empirical generalizations and conditions are useful when considering contracting
out.
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A Contract Convergence Model is developed for distinguishing and
coordinating objectives and strategies for the successful transition of an internally
provided essential public service such as fire protection and emergency medical aid
services. The model is developed in Chapter Three and is further explored in
Chapter Five. The Contract Convergence Model integrates economics and socio
political elements of successful contract relationships. To date, no one model
stands paramount for establishing and implementing contracts for services;
however, there is an abundance of applied literature defining specific methods that
have proven successful. This dissertation does not break with this tradition. It does,
however, offer economic and socio-political tools of analysis that will enable
organizations to converge on prudent and constructive contractual arrangements.
Conclusions
Conclusions supported by findings of this research provide a basis for five
generalizations that are expanded upon in the following sections. In summary, these
conclusions are:
1. Economic incentives play a crucial role in determining contract viability, but do
not ensure financial stability for either provider or producer.
2. The duration of pre-contract analysis and the period for agreeing to a
contractual relationships are time sensitive.
3. Policy development and administration (networks) are critical elements for
contracting out.
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4. Community involvement and participation before, during, and subsequent to
contract implementation is essential and likely will reveal conflicting interests.
5. Contracting out at the municipal level is consistent with the theory of a hollow
state. Coordination and accountability are more complex than in the
bureaucratic state (Milward and Pro van, 1994).
Economics
Economics has been and continues to be a primary reason for exploring
contracting out opportunities. The general theory that larger organizations can
produce and provide services for less cost is valid in these two cases. However, the
belief that economics alone influences an organization’s desire for contracting out
is misleading, impracticable, and not empirically supported.
Contrary to Kirlin’s Los Angeles County Sheriffs Department model, there
is a threshold for a producer’s ability to remain passive. Evidence is provided by
Oregon City and TVF&R’s mutual decision to terminate its four-year contractual
agreement eighteen months prior to its original date of expiration. Oregon City has
for the past two years renegotiated payments for reduced services due to budgetary
limitations with TVF&R’s concurrence, TVF&R finds itself unable to comply with
Oregon City’s desire for a more reduced level of service.
As TVF&R evaluated Oregon City’s policy for fire protection and
emergency medical aid services, TVF&R was also forced to consider its own
internal policies and procedures. TVF&R found that significantly reduced levels of
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service for one jurisdiction when severely divergent from what other municipalities
and rural service areas were receiving at fixed contractual rates caused problems.
Additionally, TVF&R faced pressure from the local firefighting union, which
claimed that Oregon City’s reduced levels of service conflicted with adopted
District policies regarding fire personnel safety. A determination to provide
inconsistent levels o f service within the district has caused internal anxiety for the
District’s governing board and administration and also the community.
Further substantiating the need to mutually terminate Oregon City and
TVF&R’s contractual arrangement was passage of State Ballot Measure 50 that
ended specific subsidies for service. With Oregon City unable to create property
values necessary for future annexation to TVF&R’s District, there is no ability to
create financial savings for the City as originally envisioned. A property tax
assessment revision is not on the horizon, nor does Oregon City desire to change
policy regarding property annexations and urban growth boundaries at this time.
Financial analysis of the City of Milwaukie and CCFD1 contract lends
support to Kirlin, Miranda, Anderson, and Dilger’s points of view that economic
efficiencies play a determining role when contemplating contracting out of
services. Milwaukie and CCFDl’s contract determined payment through the levy
of taxes consistent with CCFD1 District wide levels of services being provided.
This action avoided potential financial shortcomings from State Ballot measures
that could adversely impact municipal revenues and compel decisions to adjust
levels o f service inconsistent within CCFD1.
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Overall, contracting out does not dramatically decrease costs for citizens
that pay property taxes in Oregon City and Milwaukie. Contracting transfers the
cost of providing services from municipalities to special districts. Taking this
concept one step further finds annexation to a special district more burdensome for
a municipality’s policy-makers who must decide whether to continue to impose or
reduce its (the municipality’s) property tax assessment by an amount to compensate
for the monetary value of services provided by the special district. This
dissertation’s research and Contract Convergence Model integration support the
argument that economic incentives for contracting out, then, are limited to
incremental service enhancements produced by the special district for the same or
similar costs (Domberger, Meadowcroft, and Thompson, 1986; Berenyi and
Stevens, 1988; Ferris, 1988; Folz, 1985; and Harding, 1990).
Contract duration and contract analyses (Time)
The duration of a contract and the extent of contract analysis prior to
development and implementation of a contractual relationship are noticeably time
sensitive. The case studies in this dissertation support long-term contractual
arrangements and analyses if public agencies plan to contract out services to
regional service producers.
The success of the City of Milwaukie’s contractual relationship with
Clackamas County Fire District 1 dates back to 1983 when the City of Milwaukie
began to explore opportunities to provide fire protection and emergency medical
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aid services through Clackamas County Fire District 1, a regional fire protection
and emergency medical aid producer. Prior to entering into a contractual
relationship with Clackamas County fire District 1, the City of Milwaukie
undertook numerous economic studies, both internally and via outside consultant
assistance, to examine the benefits and costs (economics) associated with providing
internal and contract fire protection and emergency medical aid services.
Further, the City of Milwaukie and Clackamas County Fire District 1
provided opportunity for public input regarding contract fire and emergency
medical aid services. The City of Milwaukie initiated at least three community
surveys before arriving at a policy decision to contract out fire protection and
emergency medical aid services. The City of Milwaukie also developed a Fire
Protection Advisory Committee that continually, to this day, monitors Clackamas
County Fire District 1 ’s performance within the City. A contractual relationship
between the City of Milwaukie and Clackamas County Fire District 1, which began
in January 1997 and is in effect until January 2007, occurred after fifteen years of
detailed analyses and deliberation.
The failure of the City of Oregon City and Tualatin Valley Fire and
Rescue’s contractual relationship is, in part, the fault of the relatively short period
for contract analyses. The City of Oregon City’s decision to contract out its fire
protection and emergency medical aid services to Tualatin Valley Fire and Rescue
was founded on less than one year of economic and socio-political research.
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The City of Oregon City has faced significant economic challenges in
regard to providing fire protection and emergency medical aid services since 1990
when Oregon City voters rejected a request for fire department personnel funding
through a local option tax levy. Oregon City internal analyses, the establishment of
an Oregon City Fire Department Community Focus Group, and the development of
a Oregon City Fire Department Draft Strategic Plan to specifically study
contracting out fire protection and emergency medical aid services dates back to
1988, 1995 and 1996, respectively. However, such efforts focused on a
relationship between Oregon City and Clackamas County Fire District I.
Oregon City’s consideration for providing fire protection and emergency
medical aid services through Tualatin Valley Fire and Rescue began in December
1998, when Tualatin Valley Fire and Rescue presented its service delivery proposal
to Oregon City officials. With only six months of City review and public input
Oregon City on July 1, 1999 entered into a four-year intergovernmental agreement
to purchase fire protection and emergency medical aid services from Tualatin
Valley Fire and Rescue.
This evidence of the importance of adequate time is further supported by
past and current academic and practitioner research on contracting out. Examples
include solid waste collection services (Williams, 1998; Savas, 1981; Miranda &
Anderson, 1994; Paul, 1990; Ammons & Hill, 1995, Wisniewski, 1992), police
services (Kirlin, 1973), and services and maintenance of public facilities and
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equipment (Hodge, 1999), recognize an economic and socio-political desire to
establish long-term contracts, defined in this dissertation as ten or more years.
Long-term contracts enable contracting out to be extensively evaluated and
adjusted by the provider and producer to better serve a community. Mil ward and
Provan (2000) suggest that rebidding contracts frequently has several negative
effects on cooperation among the set of providers who hold contracts with the
authority. Simply stated, a transition from direct to indirect services takes time for
integration and adaptability. In the case of Oregon City contracting fire protection
and emergency medical aid services to TVF&R under a four-year contract proved
to be an insufficient time for the contract producer to fully integrate and adapt to
historical policies and procedures. Further, four-years did not allow sufficient time
for TVF&R to acclimate itself to the community and implement its policies and
procedures.
For Milwaukie and CCFD1 a long-term contract of ten-years provided
sufficient time for the provider and producer to develop and integrate effective
operational and structural policies and procedures. A time intensive analysis of
contracting out for contracts that began in the early 1980’s, supports the success of
Milwaukie’s current contract with CCFD1. Milwaukie began a long-term study of
contracting out fire protection and emergency medical aid services with CCFD1 in
the early 1980’s, more than twelve years prior to entering into a formal ten-year
contract with CCFD1. Oregon City, although it considered contracting out fire
protection and emergency medical aid services since the mid 1990’s lacked
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extensive background analysis, such as that performed by Milwaukie. Further
complicating Oregon City and TVF&R’s relationship was the negotiation of a short
four-year contract that was questionably enough time for Oregon City and TVF&R
to evaluate contract successes and failures.
Policy development and administration
Paul Light (2000) suggests that the new policy system in the contract
regime must rely on three models of accountability, compliance-based
accountability, performance-based accountability, and capacity-based
accountability. Light further argues that “without a sound infrastructure of
technical and leadership capacity, compliance almost always produces plenty of
evidence of implementation, but lacking a parallel investment in capacity building
and a clear sense of how action will produce results, the compliance is always
false” (Light, 2000, p. 98).
Oregon City’s contractual relationship with TVF&R details compliance and
performance-based accountability and exhibits a reverse disconnect for capacity-
based accountability. Capacity-based accountability is reversed in this case study
as TVF&R has capacity to perform fire protection and emergency medical aid
services within defined parameters. Oregon City as the provider is unable to
designate balanced service levels at fire stations due to expenditure imbalances.
The imbalances are in part due to construction of a new station and revenue
limitations, causing a capacity-based service level gap.
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Milwaukie and CCFDl’s contractual agreement, which reflects this
dissertation’s arguments for convergence, meets Light’s proposed models for
accountability. Both entities rely upon sound mutually agreed upon policies and
procedures for compliance, performance and capacity.
Roseanne Mirabella extends Light’s argument proposing an increasing
reliance by government on nonprofit organizations for the delivery of public
services which will require the manager (administration) assigned to monitor
performance under contracts to acquire a different set of leadership and
management skills than those required for managing direct service delivery by
public workers. The central task for these managers within this new regime is to
arrange networks, not manage hierarchies. As noted by Milward and Provan
(2000) networks of providers, governmental, non-profit, and private are an intricate
system for delivering taxpayer-funded services. These authors further contend that
there is a worldwide movement away from government provision to government
procurement of services, but they provide little evidence that governments or
academics know much about how to govern or manage networks.
This dissertation supports the importance of understanding and governing
networks; it illustrates how the integration of elected and administrative officials in
the management and oversight of contracts advances knowledge in network
coordination and accountability. The two case studies lend support to the
importance of establishing sound network management and oversight through
implementation of an Intergovernmental Council (IGC). In both cases an IGC acts
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as a voting oversight subcommittee for the providers and their administration; the
IGC is composed of six representatives, two elected representatives from the City,
two elected officials from the regional service districts, the city manager, and fire
chief.
The objective for IGC’s is to jointly consider policy development, budget
development, and financial aspects of the contractual agreement. Each
organization’s oversight committee members serve as liaisons to the other party’s
governing body and are allowed to participate in work session discussions of each
party’s governing bodies. An IGC attempts to address Milward and Pro van’s
(2000) question related to governance: How can effective institutions be designed
to operate in the world of shared power where few organizations have the power to
accomplish there mission alone? This dissertation argues fire protection and
emergency medical aid services are similar to other complex social services and
programs and cannot be provided as efficiently by a stand-alone agency, especially
when surrounded geographically by regional service producers with larger
operational and structural bases.
Community involvement and participation
Community involvement and participation at the local level is mandated by
the State of Oregon. The budget process, for example, is a very public process that
includes the requirement of a budget committee composed of elected officials and
an equal number of lay people from the community. A community involvement
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and participation process has proved valuable in examining outcomes of contracts
of the two cities studied in this dissertation.
In the case of Milwaukie and CCFDl, cited literature supported the
community playing an integral role during contracting out exploration,
implementation, and review. In Oregon City’s review and eventual transition from
TVF&R to CCFDl community involvement was noted as an important criterion for
determining appropriate levels of services provided. Throughout the exploration
phase for Oregon City and Milwaukie, considerable attention was paid to both
communities’ perceptions and concerns for what were regarded as appropriate
levels of fire protection and emergency medical aid services. Milwaukie’s citizens
during the exploratory data gathering phase of contracting out shared less concern
for how services were provided. Rather, their concerns focused on response times
and types of fire protection and emergency medical aid services provided. Oregon
City’s community analyzed contracting out from an identity perspective. Oregon
City has had the oldest internally provided municipal fire protection and emergency
medical aid service in the western United States. History and nostalgia represented
a significant hurdle for Oregon City’s chosen provider to overcome.
Community evaluation of contracted services became a complex process
when attempting to interpret subjective qualitative measurements quantitatively.
This researcher’s review of Oregon City neighborhood association meeting minutes
and memoranda from the Oregon City Fire Chief finds that the fire protection and
emergency medical aid services produced by Tualatin Valley Fire and Rescue were
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promoted more favorably than similar services produced by Clackamas County
Fire District 1. Documents, archival data, and this researcher’s discussions with
neighborhood association participants finds that the Oregon City Fire Chief and fire
department staff encouraged the residents and business owners to petition, via
letters and email correspondence, Oregon City’s elected and administrative officials
to favor a contractual relationship with Tualatin Valley Fire and Rescue.
The research of the community element of this dissertation supports the
argument that as with any politically driven process, there are likely to be
incentives to shirk responsibilities unless the system develops strict requirements,
penalties, and monitoring devices (DeHoog, 1994; Kettl, 1993; Thayer, 1987).
This dissertation’s research reveals that Oregon City Fire Department employees
took advantage of politicking and were not able to adhere to their administrative
roles. Further, as administration, Oregon City’s Fire Department personnel were
not able to objectively collect evidence and communicate results and
recommendations to the contractors in good faith, which is essential in a
contracting out decision-making process (DeHoog, 1984; Donahue, 1989; Kettl,
1988; Rehfiiss, 1990).
In Oregon City’s case, an inability to communicate effectively was not a
result of shirking of responsibilities by the provider or producer, or skewing of
data. A primary cause of failure in Tualatin Valley Fire and Rescue producing
services in Oregon City arises from operational and structural inequities and a lack
of TVF&R experience in dealing with Oregon City’s community. Milwaukie and
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CCFDl’s success, on the other hand, is based primarily on operational and
structural similarities. Unlike TVF&R, which is based in Washington County and
only began service in Clackamas County in 1999, Oregon City and Milwaukie
residents have been exposed to CCFDl services since the mid 1940’s.
Summary
This case study research supports existing literature that contracting out to
regional service producers is a viable economic and socio-political alternative for
providing government services. The Contract Convergence Model is offered as a
tool that government managers and organizations can utilize to anticipate and
address pertinent economic and socio-political elements linked to successful
contract situations. The overarching question this dissertation has been addressed.
Two cities of similar populations, budgets, and within the same county that contract
out fire protection and emergency medical aid services to two different regional
service producers yield economic and socio-political differences that effect the
outcome of contracting out. This dissertation demonstrates through case study
analyses that the success of contracting out is process dependent and the Contract
Convergence Model is a tool that can support and advance a government’s efforts
to better understand and identify the impacts of contracting out of services and
programs.
Contracting out of fire protection and emergency medical aid services may
have some real financial advantages. Time (duration of contractual relationship
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and contract analyses) is an important consideration for provider and producer
relationships. This dissertation surmises that in depth analyses and long-term
contracts facilitate operational and structural convergence. Finally, as community
members are the actual payers for contract services, community involvement and
participation are indispensable elements for contracting out success. It is these four
elements: economics, socio-political factors, time, and community, when
incorporated into the Contract Convergence Model provide public managers and
organizations a tool for methodically evaluating contracting out opportunities.
Research Implications
As Oregon City and Tualatin Valley Fire and Rescue prepare to terminate
their contractual relationship and a new partnership between Oregon City and
Clackamas County Fire District 1 is formed, the same economic and socio-political
elements will be employed to establish an Oregon City/Clackamas County Fire
District 1 contract. This dissertation’s research supports a contractual relationship
between Oregon City and Clackamas County Fire District 1.
Economic analysis finds that Oregon City’s cost to provide internal fire
protection and emergency medical aid services is comparable to that of Clackamas
County Fire District 1, a cost of approximately $2.40 per one thousand dollars
assessed property tax valuation. Oregon City and Clackamas County Fire District 1
policy direction has been provided to enable administrators from both entities to
proceed with formalizing a contractual relationship. Historical data related to
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community involvement and participation appear to support Oregon City
purchasing fire protection and emergency medical aid services from Clackamas
County Fire District 1. Further, a contract structured similar to the City of
Milwaukie’s will likely increase this contractual relationship’s success.
However, success is never guaranteed. A contractual relationship between
Oregon City and Clackamas County Fire District 1 may fail for economic and/or
socio-political reasons. As stated in Chapter Four the Contract Convergence Model
integrates fiscal policy, politics, administration, and consumer satisfaction as causal
factors for the success or failure of contracting out fire protection and emergency
medical aid services to regional service producers.
If the contractual relationship between Oregon City and Clackamas County
Fire District 1 fails, or the City of Milwaukie discontinues purchasing fire
protection and emergency medical aid services from Clackamas County Fire
District 1, application of the Contract Convergence Model may reveal key elements
not addressed or inadequately addressed by the cities or regional service producer.
Further, it would be of benefit to examine other contracting out cases using the
Contract Convergence Model. Additional case studies are likely to expand upon
and eliminate variables important for a better understanding of contracting out
benefits and costs, economically and socio-politically. Application of the contract
convergence model will further develop it into an effective tool for accurately
identifying contracting out strengths and weaknesses.
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The framework that has been developed through this dissertation can also
be used to further explore and evaluate many other nuances of contracting out.
Researchers may apply the convergence model used in this research to further test
the three distinct benefits of contracting out: (1) a reduction of costs and efficient
management practices; (2) an improvement of service quality, because of service
specialization, regionalization, and/or access to a more qualified labor market; and
(3) reductions in the growth and dominance of the public sector, due to shifting
labor, funding, and service delivery to a more efficient provider (DeHoog, 1999).
This researcher anticipates that additional studies will further define and expand the
list of economic and socio-political elements important to successful contracting
out of fire protection and emergency medical aid services to regional service
producers.
Finally, this same research approach could be utilized to test contracting
efficacy in public-private relationships. The convergence model can test public-
private contracting efforts, and aid fine tuning economic performance and socio
political performance. Through the convergence model and application of
economic and socio-political concepts as noted, more theory-based studies of
contracting out can be undertaken and our understanding of the efficacy of
contracting out can be refined.
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APPENDICES
134
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APPENDIX A
ELECTED OFFICIAL INQUIRIES
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City of Oregon City
1. What prompted Oregon City’s elected body to consider contracting out fire
protection and emergency medical aid services with Tualatin Valley Fire
Rescue, given the extensive research conducted regarding a proposed
contractual relationship between Oregon City and Clackamas County Fire
District 1?
2. What policy direction was provided to Oregon City staff to analyze Tualatin
Valley Fire and Rescue’s proposal for producing Oregon City’s Fire
Protection and Emergency Medical Aid Services?
3. Where there any specific actions by Clackamas County Fire District I that
prompted the Oregon City Commission to refocus contracting out efforts to
Tualatin Valley Fire and Rescue?
4. Did city staff recommendations regarding contracting out of fire protection
and emergency medical aid services have impact on your decisions as a
policy-making body?
5. Did community and neighborhood association input have influence on the
City Commissions decision-making process?
6. Are the fire protection and emergency medical aid service levels consistent
with what is expected and/or anticipated by Tualatin Valley Fire and
Rescue?
7. Other than for economic reasons, does city staff research, time (duration of
contract and further analyses), community input and influence, have impact
on the decision to switch service producers (from Tualatin Valley Fire and
Rescue to Clackamas County Fire District 1)?
136
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Tualatin Valley Fire and Rescue
1. What prompted Tualatin Valley Fire and Rescue to consider producing
services for the City of Oregon City?
2. Were there workshops with the Oregon City Commission to determine
levels of service best suited for Oregon City?
3. Are the service levels in Oregon City consistent with those throughout
Tualatin Valley Fire and Rescue’s service district?
City of Milwaukie:
1. Is the City Council satisfied with the levels of service provided by
Clackamas County Fire District I?
2. Flas the City Council considered annexing into Clackamas County Fire
District 1 ’s service district prior to contract expiration?
3. Did the City Council rely heavily on consultant studies, administrative
input, and citizen participation to make the determination to contract fire
protection and emergency medical aid services?
137
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APPENDIX B
ADMINISTRATIVE INQUIRIES
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1. What prompted city staff to proceed with recommendations to contract out
fire protection and emergency medical aid services with Tualatin Valley
Fire and Rescue, rather than Clackamas County Fire District 1?
2. What financial analyses were performed and presented to the City
Commission?
3. Did voter approval of the issuance of bonds to construct the fourth fire
station prompt city staff to consider contracting out fire protection and
emergency medical aid services? Was such decision based primarily on
economics or were other factors involved?
4. Do you have any thoughts and concerns regarding the current contractual
relationship with Tualatin Valley Fire and Rescue?
5. Do you have any thoughts and concerns regarding contracting out to fire
protection and emergency medical aid services to Clackamas County Fire
District 1?
139
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APPENDIX C
COMMUNITY/NEIGHBORHOOD
ASSOCIATION MEMBERS INQUIRIES
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
1. When the Oregon City Fire Department presented information regarding the
construction of the fourth fire station were adequate staffing levels for that
station addressed?
2. Were the neighborhood association members able to provide input to the
City Commission and staff regarding their concerns with contracting out
fire protection and emergency medical aid services to Tualatin Valley Fire
and Rescue and/or Clackamas County Fire District 1?
3. Do you believe the City Commission’s decision to contract out fire
protection and emergency medical aid services was made with adequate
input from the neighborhood associations and community members?
4. Do you have any thoughts and concerns regarding the current contractual
relationship with Tualatin Valley Fire and Rescue?
5. Do you have any thoughts and concerns regarding contracting out to fire
protection and emergency medical aid services to Clackamas County Fire
District 1?
141
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Asset Metadata

Creator Nakamura, Brian Seichi (author)

Core Title Regionalization of fire protection and emergency medical aid services: A comparative case study analysis of economic and socio-political impacts

Degree Doctor of Public Administration

Degree Program Public Administration

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag Economics, General,health sciences, health care management,OAI-PMH Harvest,Political Science, public administration

Language English

Contributor Digitized by ProQuest (provenance)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c16-225666

Unique identifier UC11334933

Identifier 3073823.pdf (filename),usctheses-c16-225666 (legacy record id)

Legacy Identifier 3073823.pdf

Dmrecord 225666

Document Type Dissertation

Rights Nakamura, Brian Seichi

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

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