Innovators in Action 2016
Counties and municipalities across the country use private firms to handle a growing number of services through various forms of public-private partnerships (PPPs), including full privatization and competitive contracting. While many of these decisions cite cost savings as a major factor, some are instead motivated by a desire to improve the quality of public services. Sumter County Florida, one of the fastest-growing counties in the nation, is one jurisdiction embracing this approach.
Reason Foundation’s Austill Stuart recently spoke with Bradley Arnold, county administrator for Sumter County, who led the drive toward the many partnerships that make Sumter County one of the most contracted-out counties in the country. Mr. Arnold spoke of the process that led to these decisions, with a particular focus on a recent decision to contract out library management and operations.
Austill Stuart, Reason Foundation: Please describe your role in Sumter County, a little about the county itself, and how long you have been active there.
Sumter County (FL) County Administrator Bradley Arnold: I am Sumter County administrator, and I have been working here since January of 2006. Our community has been—for the 10.5 years that I’ve been here—one of the fastest growing counties in the United States. We also have a couple of other claims to fame: We are the oldest, by demographics, county in the entire United States. The Villages (a large age-restricted community within the county) itself contributes a great deal to that.
We are still considered small and have a significant rural character to our county, but it’s continuing to grow. We do a lot of pre-planning. We are typically looking at our capital projects out 30 years, and operationally, we look out five years, not only for financial planning purposes, but also to ensure that we are aligning our investments for continued growth.
Stuart: What are some of the county services that you have had contracted out or privatized in your time there? Do you typically contract out, fully privatize, etc.?
Arnold: Of course, there are different types of contracting out of services. I view privatization as one of those types of activities—for example, our county attorney’s office. We don’t have an in-house county employee that’s an attorney. So we fully privatized our legal services—that means they provide their brick-and-mortar office, personnel, everything. All that I am looking for is delivery of the legal advice and legal services. Outsourcing requires the county to provide materials, property, etc., there’s just a company that’s providing the personnel within the county facilities, to provide the service delivery.
We have a multitude of both privatized services and outsourced services, and a lot of that started when I came on board in 2006 and two new commissioners were elected on November 2006. Each year, we contracted out something new, either through privatization or outsourcing. As a matter of fact, last year my board said, “OK, Brad, you have well-exceed our expectations, you can slow your pace now.”
We are probably the most contracted-out services county in the state of Florida. My board has a strong business background and business sense. I come from family businesses before going into local government, and my view aligns with my Board’s view—that government should stick to its core mission, and in implementing that core mission, if there are private entities that are out there that can deliver that service, then look at it, and if the costs are equal or below our costs, but the service level is equal to or higher than what we are delivering, then we should move forward with using the private firm.
The reason for that type of philosophical approach is that in such a scenario, every privatization implemented ends up being a win. Even if the services and stated costs are equal, the hidden factor is liability. You can’t quantify, other than through premium payments, what liability costs really are, so anytime we can shift a liability to some other entity, that’s good for our business—that’s true for both the private sector and government.
We outsourced, rather than privatized, library operations. You can lose control over some of the decision-making activity when you fully privatize, but when you outsource, you continue to have a lot of control and influence over the delivery of service. So that’s what we wound up doing. We looked at existing operations, where we were, and where we wanted to be, and we felt that outsourcing was the fastest, most efficient means to get to the level of service that we wanted.
So when we went forward with that process, it was publically stated that this is the direction that we’re headed. As we were negotiating a contract with Library Systems & Services (LS&S), we were receiving input from the public, and the open process allowed me to address the public’s concerns within the contract as I was receiving them. So, at the end of the day, even those citizens who were opposed to the direction to outsource the library, the only remaining complaint that they had was that the existing employees were going to go through a transition from county library employees to private-sector employees or to some other employment opportunity of the employee’s choosing.
That was it; that was the only remaining issue that in their eyes was material, and in our eyes, it’s not, because LS&S was going to provide an opportunity—we don’t believe in forcing county employees on a private provider. What we wanted was to make sure the private provider selects the most qualified people to deliver the best service. LS&S did allow for our employees to go through an interview process, and LS&S got to select the cream of the crop, and filled the gaps as necessary to move forward with the service.
So it was a positive process, and ultimately, when we moved toward implementation, I have our seasonal people that come into our county, into The Villages—they walk in, they couldn’t tell the difference. Some of the old county employees were now LS&S employees; all the customers care about is the level of service. So that was the benefit of really having a seamless transition, but the big thing for the customers was “Wow, the level of service has picked up!” Specifically, the technology advances that we were hopeful for, that we put in the contract, and that LS&S delivered on exceeded our expectations related to technology timeline implementation, as well as continued improvements in our delivery of service.
Stuart: In the three years since the county outsourced with LS&S, from the customer standpoint what have been the biggest changes—technology, hours, etc.?
Arnold: Yes, the technology has been the biggest boon that we’ve had for our customers by moving into the contract with LS&S. And it’s also the biggest benefit for our organization as well, and I’ll explain why. The technology advances—we were able to move very quickly into eBooks, providing eBook reader loans, moving into digital music downloads, and not too long ago, digital magazine downloads—are what’s driving the huge jump in circulation at our library. We now have e-games, e-comic books, and e-self publishing. Our visitations—that is, the actual customers coming into the library—are about the same, but because of all this digital access, our circulation rates went up exponentially since they can do much more from our website than before, so they don’t have to come into the library.
So we’ve actually been reconfiguring, and we actually went through a lot of expansions of our library, not as much for books, but to add more computer access for our patrons. For libraries, the trend is less checking out real books and more time spent on the computer or downloading what they need online. To draw a small parallel, consider Macy’s announcements of dropping all of the stores and laying off a bunch of people because the digital market is eating their retail lunch in their actual brick-and-mortar stores. Libraries are no different from that type of retail environment—customers are coming to us for products, and if they can get those online, then why not? Why do they have to spend time getting in their vehicle—here, predominantly, their golf cart—to come and visit the library itself?
So what that does for me, from an organizational and capital improvement plan standpoint, is that that bought me more capacity in my library, meaning I am not going to have to do another expansion in my library for quite some time, so we recognize the trend is more digital access, and that means I don’t have to spend as much money adding additional brick-and-mortar square footage. So that’s the thing that LS&S helped us get to, in the timeframe that we needed, because we recognized these trends that are out there for consumers. So, let’s not be a Macy’s—we don’t need to build libraries all over the place; let’s see how much capacity we can meet through the digital offerings that we have.
Stuart: So it worked really well, in that, in spite of your population growing very quickly, this move allowed for less relative traffic due to no longer needing to go the library for many things for which your citizens used to have to go there.
Arnold: Yes, while total site visits aren’t down, if you look at it on a percentage of growth of our total population, then our physical library visits are less than the growth of the population. That buys us capacity in the existing footprint in our library, which is awesome.
Stuart: Yes, because normally facing population increases so drastic, expansion becomes a question of when and how much, not if. Instead, while the population was growing, digital access allowed enough new free space from less hard copies of items to serve as a sort of expansion in itself, likely delaying any new construction by years.
Arnold: There’s also the fact that for some of our underprivileged customers, LS&S was able to help us reach them. We have a book-by-mail program now; we also have braille books access. We weren’t providing those services to our customers, so not only were we able to focus on the larger consumer population, but within the same contract we were also able to immediately address our underprivileged and disabled population, as well.
The only early challenge that we had was our relationship with Friends of the Library. We had two Friends of the Library organizations, and one was led by a lady whose final comments were, “One of the main reasons I don’t want you to do this is because I wanted to have one of the county jobs with the benefits.” That was basically the icing on the cake to be able move forward, because that is not our job as the government.
Our job is not to create more government jobs; our job is to meet our constitutional and statutorily required provision of services. But there is nothing in the Constitution, nor state statutes, that says that it has to be provided by county employees. So because of her personal views, ultimately that Friends of Library disbanded, and we no longer had a relationship with that one.
So that’s not good, to lose one, but on the other hand, my Villages Friends of the Library, during that same year, they still were skeptical, but they saw that we really were increasing the level of the service. And really, a lot of the concerns they had were unfounded. Just for this year to date, they have turned over $22,100 to the library system for putting on programs. So we do have a lot of increase of attendance for specific program events that we have at the library, so that’s another outreach opportunity and another improvement that LS&S brought to us.
But our Villages Friends of the Library, they basically looked at the bigger picture, looked at the long-term, and they said “You know, things are really good.” And we actually worked with them when we did our last renovation of the library, and we increased our Friends of the Library space, because they were partnering with us. LS&S has a great relationship with them. So that was honestly our only challenge in that first year—helping the Villages Friends of the Library understand that there had been no harm through this decision, and in fact there had been a tremendous amount of benefit, and they accepted that. As matter of fact, they had my person who manages the contract of LS&S, Leslie Smith (who also has a degree in library science) attend one of their recent meetings, and they were praising her. Because we looked each year from a budget standpoint, and asked, “What’s our next step in technology services that we can provide?”—they know that we’re still focused on that.
The other big thing for those people who were anti-outsourcing—there was general fear that LS&S would control the content of available books and materials, and that’s the furthest thing from the truth. We made it clear in the contract that the company reviews selections based on what the customer demands are, and Leslie, my county employee who manages contracts, reviews all the materials, approves the materials, and the acquisitions are made. So we still maintain, if you will, content control, and we continue to have an open range of materials available to our customers.
Stuart: Also, you had mentioned that the Villages Friends of the Library helped out in terms of providing funding of programs, and with the foot traffic growing at slower rate due to online content, and the freed space in the library from the elimination of needing to have keep as many hard copy materials, it probably frees more space to have more programs and events to get people to the library, too.
Arnold: Exactly—that’s exactly right.
Stuart: You initially did a five-year contract for library operations?
Arnold: Not too long ago we amended the contract to cover more years, and because we did make some changes—for example, we did have a library on wheels, and the vehicle had about had it, so it was time to move away from it because it came in handy during our expansion and renovations—but once we were done implementing some of the changes, we didn’t need the service, especially because of the digital availability. There was no need to have a physically-mobile library anymore, so we made some swaps within the contract. But generally speaking, we can call it five years.
Stuart: What are some of the other things that the county has either outsourced or contracted?
Arnold: Transit operations is one. We own the buses, and Ride Rite is our outsourced provider. They handle the scheduling of the bus rides, they provide the manpower to drive the buses, to pick up our customers for our “door-to-door” type of service. We also contract out our building plan reviews and building inspections. We contract out all of our generator and preventive maintenance, including all of our HVAC, plumbing, roofing, and debris management.
We actually have kind of a hybrid with fleet maintenance for fire vehicles and heavy equipment. First Fleet is the company that provides the maintenance on that equipment, and they do that on county property within the same bay area, where some of my county employees handle the smaller vehicles. My team gets along great with the other team, and we participate in their training activities, so it’s a win-win activity. Our misdemeanor probation services are also fully privatized. All of our IT is outsourced, every bit of it, similar to LS&S in that their project manager for the contract is located within the facilities.
For my operations, I have 210 positions. Out of the 210, 100 are my fire personnel, so 110 roughly provide every single other service that I have; the bulk of them are contract managers. We manage all of the different providers, whether privatized or outsourced. And I am little biased—my dissertation that I will be working on starting January, because I’ve almost completed all of my classes for my Doctorate program—is on contracting out services.
Stuart: A lot of the privatization and outsourcing activity has come in the last decade when you’ve been there. Maybe there’s no way of making such a broad statement, but if there is one overall change that you’ve seen as an administrator as your country has made these transitions, what would it be?
Arnold: My focus is making sure that—and actually our mission statement includes—being the most effective and efficient local government in the provision of services. So with public-private partnerships, if you aren’t considering them, then there’s no way to meet that mission. We won’t necessarily always go to that solution, but we always consider that solution. Some people simply just won’t consider it; I think of that as irresponsible stewardship.
We have to consider those things, and for me, I’ve taken these changes in steps over time. I didn’t come in and do everything. Each success in the contracting-out of services has led to a level of trust to move to the next success of contracting-out of services. So I’m still batting 1000, I don’t want to lose that reputation as far as trust with my elected officials, so they can demonstrate that trust back to citizens that the right decision was made.
Strategically, we walk in to these things with a lot of planning, and a lot of analysis, and that’s the reason why we’re with LS&S. I made it very clear at the very beginning in my discussion with them that some of the company’s past marketing was about providing cost savings. To that I said, “Stop right there—I need to find out how you deliver services; I need to understand how you can bring quality improvements to our existing services. Let’s talk about that, and let’s talk about that before we can get to the discussion about cost.” Because if you cannot meet my desired level of service, and where we want to go in regards to our level of service, then there’s no need to talk about money.
And so LS&S was able to focus on quality and delivery of service to a point where it was convincing enough to talk about money. And though our savings was fairly small, if it’s at or below the current cost, then we’re golden, because of not having to worry about workers’ comp, not having to worry about post-employment benefits liability, some of the general liability of employees doing negligent things. So, if I am at that breakpoint, then the thing that I can’t quantify—we know that we’re going to have some sort of long-term savings with it. My Board is always that way: “Can they deliver the same or greater level of service?”, and the second question is, “Can they do it at the same, or at less cost as the current arrangement?”
We even took the company’s structure to make an apples-to-apples comparison by asking “If our employees went to the same level in-house, what would costs look like?” That’s something many local governments don’t do—they ask a contractor to provide a higher level of service but comparison is with an in-house arrangement with a lower level of service—that’s not comparing apples-to-apples.
Stuart: Overall, how would you summarize Sumter County’s experience with PPPs?
Arnold: We prepared our organization to withstand any sort of economic change, but that doesn’t change the fact that contracting out provides an organization with the flexibility to be able to shift with external market impact. I’ve had government people say “We’re insulated from that,” which is flat-out wrong. They are tied to the greater economic cycle, just like everyone else, so you can’t ignore it.
Contracting out services provides us flexibility because, let’s say there’s a recession that hits us again. Well, I don’t have to lay off anyone in my building plan review and building inspections. The contractors may have to lay people off because there will be less work—and therefore less manpower they need to provide services—but my quality of service does not suffer.
Under public-private partnerships, ultimately you are lockstep with this partner that is private and providing services, and if you don’t look at the private entity as a partner, then the arrangement will not be successful. So as things change—even the case with LS&S, where we’ve modified the agreement with them because we want something, or we can drop something off cost-wise—that’s a partnership, so it’s very “open book” on both ends when we work together contractually, and work in the same facility, delivering these library services to our customers.
Since 2006, Bradley Arnold serves as county administrator for Sumter County, Florida, making him responsible for supervising most of the county’s government operations for functions such as Fire/Emergency Management, Economic Development, Public Works, and Library Services.
Mr. Arnold’s career in public service goes back over two decades, starting as an environmental engineer and director of utilities in Lowndes County Georgia in 1994. Mr. Arnold then became county administrator in Whitfield County Georgia in 2001, a position held until taking the same position in Sumter County. He also served as an intelligence specialist for the U.S. Navy Reserve from 2003 to 2011.
Before starting a career in public service, Mr. Arnold served as vice president for two small businesses—one providing cleaning services for office buildings, and one providing consulting, operations, and training services for power systems—from 1983 to 1994. Mr. Arnold holds a B.S. in Physics from The Citadel, a Master of Public Administration from Valdosta State University, and is currently pursuing a Doctorate in Business Administration from Saint Leo University.