In a controversial move, the HB Finance Commission on May 22, 2019, voted 4-3 to recommend that the City Council consider issuing a request for proposal to outsource the city’s 31 technology employees.
The Finance Commission is an advisory panel made up of seven residents each appointed by a Council member. FC chair Ron Sterud (councilmember Lyn Semeta’s appointee) argued at the meeting that outsourcing would save significant money and lessen future pension liabilities.
The action was taken despite some concerns from the City Council. At an earlier May 20 City Council study session, council member Mike Posey said the RFP proposal by the Finance Commission amounted to setting policy, which is outside of the Commission’s scope. Barbara Delgleize said talk about outsourcing both the IT and Human Resources departments (HR has 15 employees) had “caused undue concern among departments.” Patrick Brenden added that “If I’m an employee and I hear I might be outsourced, I’m starting to look.” Kim Carr claimed the outsourcing idea was “politically motivated.” And assistant City manager Lori Ann Farrell said an outsourcing process would require hiring a consultant to analyze and document everything a department does, including making a risk assessment of privatizing.
But both Peterson and Semeta said the Finance Commission was free to make recommendations to the Council, and the ultimate decision about an RFP would be made by the elected Council members.
Meanwhile, City management is worried about losing experienced employees through retirements. At the study session, Farrell said close to one-third of city staff is eligible to retire—a record number for the City. Budgetary restrictions, lack of interest in government work by young people, and an involved hiring process have made recruitment difficult, she said. City managers have been working to streamline the process, but HB is still “very constrained” in building management talent and needs to ensure succession plans are implemented. If it fails to do so, the City could see significant gaps in management coverage, Farrell warned.