2020 -- H 7378 | |
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LC003607 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2020 | |
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A N A C T | |
RELATING TO TOWNS AND CITIES --PRIVATIZATION OF MUNICIPAL SERVICES | |
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Introduced By: Representatives Jackson, Noret, Azzinaro, Casimiro, and Bennett | |
Date Introduced: January 30, 2020 | |
Referred To: House Municipal Government | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby |
2 | amended by adding thereto the following chapter: |
3 | CHAPTER 55.1 |
4 | PRIVATIZATION OF MUNICIPAL SERVICES |
5 | 45-55.1-1. Statement of intent. |
6 | If it is determined that privatization of certain municipal governmental functions may be |
7 | appropriate, the privatization inquiry process should be well defined with appropriate non- |
8 | partisan, institutional oversight. The principles that guide a privatization inquiry shall include the |
9 | following: |
10 | (1) To ensure the potential savings are realized and maximized -- build cost controls and |
11 | containment incentives into contracts to eliminate excessive and unreasonable overhead costs and |
12 | profits at the expense of citizens of each municipality; |
13 | (2) To preserve and promote competition -- permit in-house program managers and |
14 | municipal public employees to bid for the contract on a level playing field; |
15 | (3) To ensure quality and responsiveness -- develop reliable measures of service quality, |
16 | strengthen in-house monitoring capacity and expertise, and write contracts with periodic |
17 | performance reporting; |
18 | (4) To ensure accountability, control, and avoidance of conflicts of interest with |
19 | departmental managers -- write detailed contract specifications, and require record-keeping and |
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1 | periodic reports; |
2 | (5) To address legal and political barriers -- involve affected groups in the decision |
3 | making process; and |
4 | (6) To recognize the impact on service recipients, employees, and their families -- enable |
5 | municipal public employees to have an opportunity to bid for their work. |
6 | 45-55.1-2. Definitions. |
7 | When used in this chapter: |
8 | (1) "Conversion differential" means transition costs and costs associated with starting up |
9 | or closing down during conversion to purchased services or in the event of the need to bring |
10 | services back in-house. |
11 | (2) "Cost comparison" means an analysis of the comparative costs of providing the |
12 | service in-house or by privatization. |
13 | (3) "In-house bid" means the cost of the proposal proffered by in-house municipal |
14 | programs and employees and their representatives pursuant to § 45-55.1-3(b). |
15 | (4) "In-house costs" means a detailed budget breakdown of the current costs of providing |
16 | the service or program proposed for privatization. |
17 | (5) "Privatization" or "privatization contract" means an agreement or combination or |
18 | series of agreements by which a non-governmental person or entity agrees with a municipality to |
19 | provide services expected to result in a fiscal year expenditure of at least one hundred fifty |
20 | thousand dollars ($150,000) (as of July 1 of each year, the amount shall increase to reflect |
21 | increases in the consumer price index calculated by the United States Bureau of Labor Statistics |
22 | for all urban consumers nationally during the most recent twelve (12) month period for which |
23 | data are available or more), which would contract services which are substantially similar to and |
24 | in replacement of work normally performed by an employee of an agency as of June 30, 2020: |
25 | (i) "Privatization" or "privatization contract" excludes: |
26 | (A) Contracts resulting from an emergency procurement; |
27 | (B) Contracts with a term of one hundred eighty (180) days or less on a non-recurring |
28 | basis; |
29 | (C) Contracts to provide highly specialized or technical services not normally provided |
30 | by municipal employees; |
31 | (D) Any subsequent contract which: |
32 | (I) Renews or rebids a prior privatization contract which existed before June 30, 2020; or |
33 | (II) Renews or rebids a privatization contract that was subject to the provisions of this |
34 | statute after its enactment; and |
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1 | (E) An agreement to provide legal services or management consulting services. |
2 | (6) "Statement of work and performance standards" means a clear statement of the nature |
3 | and extent of the work to be performed with measurable performance standards as set forth in § |
4 | 45-55.1-3(b). |
5 | (7) "Transition costs" means the cost of contracting including monitoring vendors for |
6 | accountability, costs associated with unemployment compensation, payment of accrued leave |
7 | credits, bumping, and retention factors for those with statutory status. Transition costs shall not |
8 | include department overhead or other costs that would continue even if the services were |
9 | privatized. |
10 | 45-55.1-3. Preclosure analysis. |
11 | (a) Prior to the closure, consolidation or privatization of any municipal facility, function |
12 | or program, the chief municipal administrative officer or their designee, shall conduct a thorough |
13 | cost comparison analysis and evaluate quality performance concerns before deciding to purchase |
14 | services from private vendors rather than provide services directly. |
15 | (b) The chief municipal administrative officer shall notify the bargaining representatives |
16 | of municipal employees who will be directly impacted by a potential privatization in writing at |
17 | least six (6) months in advance of its consideration of privatizing a municipal service and |
18 | complete the following process: |
19 | (1) Document the current in-house costs of providing the services with a detailed budget |
20 | breakdown. The in-house cost shall include any department overhead and other costs that would |
21 | continue even if the service was contracted out; |
22 | (2) Prepare a statement of work and performance standards which shall form the basis for |
23 | the requests for proposals (RFP) and which shall include the following: |
24 | (i) A clear statement of work with measurable performance standards including |
25 | qualitative as well as quantitative standards that bidders must meet or exceed; |
26 | (ii) Requirements that contractors meet affirmative action, disability and other |
27 | nondiscriminatory and service standards currently required of municipal agencies; |
28 | (iii) A clear format that will enable comparison of competitive bids and in-house bids. |
29 | The format must require detailed budget breakdowns. |
30 | (c) Prior to the issuance of the RFP current public municipal employees must be notified |
31 | of the intent to solicit bid proposals and of the decision timeline. Additionally, at least sixty (60) |
32 | calendar days prior to the issuing of an RFP, the cost analysis and statement of work shall be sent |
33 | to the bargaining representatives of state employees who will be directly impacted by a potential |
34 | privatization. |
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1 | (d) Prior to, or up until the time when a prospective offeror is required to submit to the |
2 | municipality a proposal for a privatization contract, directly impacted municipal employees and |
3 | their bargaining representatives shall be afforded an opportunity to present a new cost estimate, |
4 | reflecting any innovations that they could incorporate into the work performance standards. This |
5 | new cost estimate shall be deemed an in-house bid, which shall form the basis for the eventual |
6 | cost comparison. The chief municipal administrative officer shall provide technical and |
7 | informational assistance to the in-house state work group in its preparation of an in-house bid. |
8 | (e) Prior to or at any time before or after the normal procurement process, the director |
9 | may elect to accept the in-house bid or proceed with the normal procurement process which must: |
10 | (1) Incorporate the statement of work and performance standards; and |
11 | (2) Require bidders to meet the same statement of work performance standards as would |
12 | be expected by an in-house cost estimate; and |
13 | (3) Include bid forms requiring a sufficiently detailed breakdown of cost categories to |
14 | allow accurate and meaningful comparisons, if applicable. |
15 | (f) The in-house bid developed pursuant to subsection (d) of this section shall be kept |
16 | confidential from bidders. |
17 | 45-55.1-4. Cost comparison. |
18 | The chief municipal administrative officer shall analyze all vendor bids as compared to |
19 | current delivery of service costs or an in-house bid, whichever is lower, according to the |
20 | following: |
21 | (1) Any cost comparison must include an analysis of: |
22 | (i) Comparative benefits for employees to meet the requirements of the statement of work |
23 | and performance standards; |
24 | (ii) All transition costs as defined in § 45-55.1-2(f); |
25 | (iii) Any conversion costs as defined in § 45-55.1-2(e); and |
26 | (iv) Areas where the bidder's costs appear artificially low, thereby putting the |
27 | municipality at risk for further cost overruns. |
28 | (2) In the event that the municipality will incur new program costs related to the |
29 | statement of work and performance standards, such costs shall be included in the cost |
30 | comparison. |
31 | (3) All cost comparisons must include an analysis of whether the cost savings will result |
32 | in meeting the performance and qualitative measures set out in the statement of work and |
33 | performance standards. |
34 | 45-55.1-5. Award of contract. |
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1 | After conducting a cost comparison pursuant to § 45-55.1-4, the chief municipal |
2 | administrative officer may award the bid to an outside vendor only if the savings to the |
3 | municipality is substantial and the quality of performance of service required and specified in |
4 | statement of work and performance standards will be met or exceeded by the outside vendor. |
5 | 45-55.1-6. Appeal. |
6 | Before any award is final, municipal employees or their bargaining representatives shall |
7 | have a right to protest the award decision within thirty (30) days to the chief municipal |
8 | administrative officer. The chief municipal administrative officer shall have no more than fifteen |
9 | (15) days to render a decision. Any state employees or their bargaining representative that files a |
10 | protest shall have thirty (30) days from the director's decision to file an appeal to the superior |
11 | court, Providence County. The superior court shall determine within thirty (30) days of filing |
12 | whether to stay the award or allow the procurement to proceed. Until such time as the superior |
13 | court makes this determination, no final award by the municipality may be made. |
14 | 45-55.1-7. Report of general assembly. |
15 | (a) The chief municipal administrative officer shall notify the chairpersons of the house |
16 | and senate finance committees of their intent to request bids or proposals to privatize municipal |
17 | services. The notice to the committees shall be provided thirty (30) days prior to issuing the |
18 | request. |
19 | (b) Upon the final decision of an award, the chief municipal administrative officer shall |
20 | provide a report to the chairpersons of the house and senate finance committees outlining the bid |
21 | process and analysis conducted in issuing an award. |
22 | 45-55.1-8. Applicability. |
23 | (a) The process set forth in this chapter shall apply to privatization contracts as defined in |
24 | § 45-55.1-2. |
25 | (b) Notwithstanding any general law or special law to the contrary, no award shall be |
26 | made or privatization contract entered into by a municipality unless and until the processes and |
27 | procedures outlined in §§ 45-55.1-3, 45-55.1-4 and 45-55.1-5 have been fully complied with in |
28 | their entirety. All of the aforementioned sections shall apply to all pending awards and pending |
29 | privatization contracts. |
30 | 45-55.1-9. Severability. |
31 | If any provision of this chapter, or the application of this chapter to any person or |
32 | circumstances is held invalid by a court of competent jurisdiction, the remainder of the chapter |
33 | and the application of that provision to other persons or circumstances shall not be affected. |
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1 | SECTION 2. This act shall take effect upon passage. |
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LC003607 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO TOWNS AND CITIES --PRIVATIZATION OF MUNICIPAL SERVICES | |
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1 | This act would create a review process like the existing state service privatization |
2 | process, which municipalities must follow whenever they seek to privatize the yearly furnishing |
3 | of municipal services in excess of one hundred fifty thousand dollars ($150,000). |
4 | This act would take effect upon passage. |
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LC003607 | |
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