May 08, 2013 - If this were a math test in school, it would be one heck of a story problem.
If two villages combine their dispatch centers into one, how much money will this consolidation save each of them and will it be enough for one of them to keep a customer?
Last week, the Oxford Village Council voted 3-1 to authorize Manager Joe Young to work with interim Lake Orion Village Manager Darwin McClary on a joint dispatch services proposal for Orion Township.
This proposal was presented to the Orion Township Board on Monday, May 6.
In a nutshell, Lake Orion is proposing closing its dispatch center and housing its operations and employees in Oxford's dispatch center. The two villages would then share the costs of operating a joint center.
"Our call numbers are so close, it makes sense for us to just share the cost 50/50," McClary told Oxford's council.
It's proposed that two dispatchers – one from Lake Orion and one from Oxford – would begin working side-by-side in the center 24-7 on Jan. 1, 2014.
"If one dispatcher is busy on a call, the other dispatcher would pick up the (other) call regardless (of which community it was coming from)," McClary told this reporter. "They would be answering each other's calls as needed."
"They're going to be cross-trained, obviously, to back each other up," Oxford Village Manager Joe Young told this reporter. "In an ideal situation, they would take their calls, we'd take our calls, but it depends on how it gets set up. There may be a 9-1-1 (call) and you can't distinguish whose it is. We've got to work those logistics out."
Although they'd work in the same center, the dispatchers would draw paychecks and benefits from the village for which they work.
"Our employees would remain our employees," McClary told council. "Oxford's (dispatchers) would remain your employees."
"Is your union all right with this?" asked Oxford Village attorney Bob Davis.
"Very much so," replied Lake Orion Police Chief Jerry Narsh. "Everybody kind of understands the economy of scale. These blendings of dispatch centers are happening all across Michigan, really the United States. Due to our proximity, this just made a lot of sense."
It should be noted that neither village council has given a final approval for this consolidation proposal.
It's anticipated that doing this would allow Lake Orion to save $52,873 annually, according to McClary, who based this on an analysis completed by the Southeast Michigan Council of Governments (SEMCOG) in July 2012.
This savings would allow Lake Orion cut its price in half for dispatching Orion Township's fire/EMS calls.
"That cost-savings (for Orion Township) is going to be offset by the cost-savings the Village of Lake Orion was going to see from collaborating with the Village of Oxford," McClary explained.
Currently, Lake Orion is charging Orion Township $91,800 annually for dispatch services under a contract that expires Dec. 31. Orion subsidizes a good portion of Lake Orion's $273,228 dispatch budget, of which $177,472 is derived from the village's general fund and $3,956 from 9-1-1 phone revenues.
Under its joint proposal with Oxford, Lake Orion would charge approximately $46,000 beginning Jan. 1, 2014 (or $24.96 per call based on 1,837 calls annually) with a 2 percent increase each year after.
Even though it is a joint proposal based on figures from a joint dispatch center, if Orion Township chooses to stay with Lake Orion, it would still hold the contract. Oxford would not have any dispatch contract with Orion Township. "It's really their proposal," Young told this reporter. "We're supporting what they're proposing."
Lake Orion is hoping this discount will make it more competitive with the Oakland County Sheriff's Department, which has submitted a proposal to Orion Township for dispatching its fire/EMS calls.
"It's really the Village of Lake Orion giving up a substantial portion of the cost-savings we were going to see to make it affordable for (Orion) township to stay with us," said McClary, who noted his village may still realize a net savings of about $6,000 annually.
The sheriff's department is also proposing to charge $24.96 per call and that price would increase to $25.46 on April 1, 2014. Based on an annual call volume of 1,735, which is a three-year average for the Orion Township Fire Department, the township could pay $10,826 for the first three months of 2014, then from April 1 until March 31, 2015, the cost would be $44,173. County dispatch rates have historically risen an average of 2-3 percent per year.
McClary made it quite clear to Oxford's council that Lake Orion needs to retain Orion Township as a dispatch customer or the village's days of providing local dispatch services are finished.
"If we are not able to keep Orion Township on board with our dispatching services, if they do decide at some point to go to Oakland County, that is going to put Lake Orion in a situation where we're going to have to get out of the dispatching business," he said.
"We're going to end up being a customer for someone else whether we contract with the Village of Oxford to provide those services to us or whether we have to go to Auburn Hills or somewhere else."
McClary said if Lake Orion loses Orion Township as a customer, the village would not be able to recover from that revenue loss.
"It's simply going to price us out of being able to provide our own local dispatching," he told Oxford's council. "Unless we were able to come up with the difference in funding to be able to do it ourselves and based on the village's financial situation, I just don't see that as an option right now."
Oxford Village President Tony Albensi indicated he's open to the joint dispatch concept. "Personally, I think it's an interesting idea," he said. "I'm open-minded to this."
But Albensi wants to see all the figures before any definite decisions are made. "I want to see some hard numbers," he said. "I personally don't have a problem with at least opening the door and seeing where it leads us."
Oxford Councilman Elgin Nichols also wants to see some "realistic numbers." He recommended "tacking" 20 percent onto the projected figures "because there's always going to be some problems."
Right now, there's a discrepancy concerning how much savings would result from the villages sharing a dispatch center.
While McClary indicated the SEMCOG analysis stated each village should save $52,873, Young told this reporter, he's calculating the annual savings to be somewhere between $10,000 and $20,000, "depending on what we negotiate."
McClary told this reporter he believes the savings might even be higher for Lake Orion.
"From Lake Orion's standpoint, the understanding I have is that our savings may actually increase a little bit because we have had some staffing changes," he said. "I'm just going off what the SEMCOG analysis indicated."
When asked about this discrepancy, Young told this reporter, "The SEMCOG (study) was preliminary. They didn't go into a lot of detail."
Young said the villages could split the cost of things like utilities, cleaning, office supplies, building and equipment maintenance, etc.
"In essence, it's like paying rent," he said. "I'm anticipating they should pay for using our space. We've got to maintain the building. The air conditioning's going to need replacing, things like that."
In addition to saving on annual operating costs, Lake Orion would also realize a onetime cost-savings of $50,000 to $60,000 because it would not have to upgrade the dispatch equipment at its current facility.
Lake Orion would help pay to upgrade the outdated 9-1-1 technology in Oxford's center, a project that's currently estimated to cost $95,000, but could end up being more.
Oxford Village already has $50,000 from Oxford Township set aside for that purpose, plus it's anticipating receiving $30,000 from the county for the upgrade, so the two villages would end up splitting the remainder of the cost 50/50, Young said.
"We do understand that we have to participate in the cost of upgrading the equipment at Oxford, but those costs are fairly minimal compared to what we would have to pay here," McClary told this reporter.
Young told council there could be funding available from the state since this proposal involves two municipalities collaborating.
McClary noted that Lake Orion could save another $8,000 annually over the next five years because its dispatchers would be using new equipment in Oxford's center that would require no maintenance.
Oxford Township Supervisor Bill Dunn, who frequently attends council meetings as a village resident, noted he hopes that before Oxford Village enters into any agreements with Lake Orion, village officials would have the courtesy to approach the township board and "at least talk to us."
Oxford Township contracts with the village for fire/EMS dispatch services.
"I cannot predict what the township board's going to do," Dunn noted. "There may not be any problem whatsoever."
Albensi assured Dunn that the village would keep the township in the loop.
"I wouldn't want it any other way," he said. "It would be my hope that any sort of agreement, if this were to go forward, would not affect the agreement we have with Oxford Township, nor the services that are provided to Oxford Township."
CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.