Evaluate both options and come up with the financial impacts of each of the decisions.

The information provided was:

The City of River City is a small, low-income, rural, retirement community of approximately 70,000 people. The Town incorporated (became a city/town) 30 years ago. At incorporation, the City formed its own Police department - believing that it would provide better service than contracting with the county. The Police department currently has a sworn staff of 70 officers and 40 non-sworn personnel. Most of the police department (senior officers, management) are within 3 years of retirement. The Chief is 55 years of age.

The City participates in the CalPERS retirement system, with a 3% @50 retirement benefit for current employees. Current employees do not contribute anything towards the cost of their retirement. The City has implemented pension reform such that all new employees are enrolled in the 2.0%@55 retirement benefit. The new City Manager has examined the financial records of the police department and is concerned that it is overspending on an annual basis. He hired an outside consultant, over the objections of the police union and the Chief, to examine the cost effectiveness of outsourcing police services. A staffing audit is underway. The Mayor's son-in-law is the Police Chief, and he has publicly defended the integrity of the man who married his daughter. The Mayor has scheduled a Public Hearing for 5/3/23. The Mayor is going throughout the community raising fear among the City's senior citizens that the new Town Manager wants to contract police services which will increase crime and fear within the community. Concerns to be addressed: There really are only two options for the City to consider: Contract for Police Services with the County Sheriff Keep the police services in house.

Strategies for each option: Contracting Out (Outsourcing Police Services) to the Sheriff's Department Employees could be offered early retirement incentive / severance package -assume that each of the employees would accept an early retirement incentive of 6-months' salary. The Police Chief will not be offered an incentive - he is an at- will employee and will be given the option to retire with dignity or be released (with cause: mismanagement). The council will need to authorize a contract proposal (Schedule A) from the Sheriff's Dept. Retaining the department - Chief of Police is terminated for cause (no severance) The City will have to recruit a new police Chief Current retirement costs are 25% of salary (paid to CalPERS). The employees contribute 0% to those costs. The Town is negotiating with the current union and is pushing employees to cover 9% of those costs. Assume that is accepted to keep the service in-house. New employee retirement cost is 10% of salary (paid to CalPERS) and new employees will pick up those costs.