Cops, Inc.

The experiences of several small towns have proved that even police services can be privatized.

REMINDERVILLE, OHIO—This is a small, quiet community of 2,000. Its older homes and new housing developments of modest split-levels are nestled in the woods off roads that snake through the rolling hills of northern Ohio. About the only memorable feature of the town is the prominent signs directing the traveler on to other, more interesting places—Geauga Lake Amusement Park and Sea World.

So what am I, a reporter from Chicago, doing snooping around Reminderville, interviewing its chief of police? Is this seemingly sleepy village halfway between Cleveland and Akron, Ohio, the scene of some anomalous crime problem?

In fact, I'm on the trail of something quite different—a growing trend among local governments to turn to the private sector to supply police services long provided directly by local governments. Many cities, villages, and townships in the United States are willing to pay $35,000 a year to someone who spends a good deal of each week writing notices and slipping them under auto windshields, filling out insurance claim reports, or answering telephones. But many other local governments around the country are beginning to realize that they can no longer afford to pay highly trained, high-salaried specialists in fighting crime to act as dispatchers, secretaries, telephone operators, and claim writers. Some are finding that even in crime labs and in certain parts of investigations, trained civilian specialists can do the job—and for less money.

But Reminderville is one of a handful of municipalities that have gone a step farther and hired private security firms to provide all local police services. To many Americans, privately run police forces no doubt seem uncomfortably close to vigilante groups, accountable to no one and ruling with iron fists and an Old West sense of justice. Is there some way these communities keep a rein on their private police? And how great are the cost savings? Do they come at the expense of the quality of service? I'd trekked to Reminderville to see one town's private police force in action.

Police guarding Reminderville spend most of their time in cars because the homes in this residential community are spread out. Things are ordinarily quiet except in a small, lower-income area where petty theft, vandalism, and domestic squabbles break the otherwise tranquil scene.

It could be a typical Midwestern town with a typical Midwestern police force of seven officers. But most of the personnel were selected by a private security firm. For an annual fee paid by the village of Reminderville and surrounding Twinsburg Township, the two squad cars and all the equipment are bought and maintained and the officers' salaries paid by the private firm. Because they're not covered by civil service and a police union, the Reminderville cops make less than their peers on other forces. One police car is black and white, the other copper-colored. Both were purchased used when that proved to be the best deal, and no one saw fit to spend money repainting them. The radar speed detection equipment was also purchased used—costing one-sixth as much as the fancy scanners bought by the police force that sold it.

Arthur J. Robataille, chief of police for nearby Aurora for 14 years, now works from a small office in the Sheraton motel in Aurora. He is president of Corporate Security, Inc., which provides Reminderville with the police equipment and pays the salaries of the Reminderville police force.

In Aurora, Robataille had watched the population grow from 1,500 to 10,000 and seen the police force taking on many of the ailments of a traditional urban force. By 1980, he says, he could no longer cope with department politics and his inability to cut budgetary fat and institute cost-saving programs.

He quit and formed Corporate Security with partner Joseph Dudas, who heads up security for Geauga Lake Amusement Park—a major summer tourist attraction in Aurora. In addition to providing standard private security for businesses, hotels, nearby factories, and large public events, Corporate Security, Inc., keeps Reminderville's police force running.

"Ray Williams (the mayor of Reminderville) asked me for help because Summit County was withdrawing its patrol for budgetary reasons," Robataille told me. As in many other locales, the Summit County sheriff's department had provided basic protection for the small villages and unincorporated areas within the county. But with public monies getting tighter, in 1980 the county advised Reminderville Village and Twinsburg Township, a small unincorporated area surrounding the village, that it would cost them $180,000 a year to continue to receive the emergency response service and occasional patrol by one car. The village board balked.

"Ray said, 'Get me some security people to patrol the area,' and I told him it was illegal," explained Robataille. "So he asked us to give him police officers. At first, I didn't know how a private company could do that, but my partner and I looked into it, and we had Reminderville's legal counsel check into it. We found out there was no rule against it (in Ohio)."

So Corporate Security struck a deal with Reminderville and Twinsburg for protection services. For $90,000 a year—half the amount requested by the Summit County sheriff's department—the firm would provide twice as many patrol cars and a 6-minute emergency response compared to 45 minutes for the sheriff's department. It would select trained, state-certified candidates for the police positions, leaving the village to make the final choice. In fact, village officials would have full autonomy in hiring, firing, disciplining, and organizing the police force.

Reminderville began using its new police force in April 1981, but soon, objections and threats of legal challenges started coming in—not from a government regulating body but from the Ohio Police Chiefs Association, which derided Reminderville's force as "rent-a-cops." Because the police worked for Corporate Security, even though the village was ultimately paying their salaries, Ohio law would not consider them legitimate police officers, claimed the association. The group protested and considered legal action throughout the summer of 1981 but soon after dropped its protests. And I couldn't get anyone from the association to discuss Reminderville with me.

The fact is that nothing in Ohio law prevents trained, certified police officers from working for a private firm and serving a municipality, although the law in some states does. The Reminderville police have made numerous arrests, written many traffic tickets, and done the other duties expected of the police, without any charges or complaints leveled against them.

"This is a professional, top-notch organization," Chief of Police Dick Wilk told me proudly. "We're really no different from other police forces, except we get our checks and equipment from a private company."

One of the reasons, claims Robataille, that police unions and associations complain so loudly whenever this concept is proposed is pure protectionism. Because they're not unionized, the Reminderville police get paid less than typical police forces. On the other hand, the job is far less demanding than in New York, Cleveland, or other large and medium-size cities.

Most of the seven Reminderville police officers are young and hungry for work. Having completed police academy, they told me, they often encountered difficulty finding work with municipal police forces that are more often being trimmed than expanded. The Reminderville police, said officer Mike Lipchinsky, make ends meet by working at least 10 hours a week overtime in addition to the 40-hour week. (Corporate Security does no consulting on the efficiency of the personnel. The size of the force is determined by the village, and any overtime is decided by the chief of police and paid by the village.)

Although the Reminderville force would like to have two-officer patrols during the night hours when both cars are on the road, the budget doesn't allow for it. And that's probably just as well. A detailed 1977 study by the Police Foundation, carried out in San Diego, found that in nearly all cases it is "more efficient, safer, and at least as effective for the police to staff patrol cars with one officer" rather than two. That finding has not deterred big-city police unions from demanding two-officer cars, but budget pressures are forcing even those departments to cut back their percentage of two-person cars.

Because Robataille's firm is paid a previously negotiated fee to maintain and buy equipment, pay basic salaries (overtime is extra), and cover other costs, Corporate Security is motivated to keep operating costs as low as possible and still provide good service. A close eye on the budget prompted Robataille to buy a used radar speed detector for $350. Two officers told me they would rather have had a new, $2,600 detector with the latest advances—including a mechanism that defeats radar-detection equipment—but they both admitted that the reworked older model does a good job of catching speeders. The firm also purchased used cars, one a used police car and the other an ordinary car that was then modified for police duty. Robataille calculated that the force would get as many miles out of the used cars as new cars and that maintenance costs would be the same. (A government body, on the other hand, ordinarily must open up each service for bids, and the consensus is that bidding requirements make it virtually impossible to consider used equipment.)

The department also saves money because Wilk, in addition to serving as chief of police and putting in time on patrol, is also an accomplished electrician and installs, maintains, and repairs the patrol cars' electrical systems and the department's communications and radar equipment. And because the Reminderville force is so small, Robataille contracts with neighboring Twinsburg for dispatching and some accounting functions. (Twinsburg handles such duties for several surrounding communities with small forces.)

Robataille's firm also carries the auto and liability insurance for the police force. Although his company recommends personnel but does not make the ultimate choice, Robataille does conduct background checks on all candidates because the firm has an interest in ensuring that employees are responsible and have a clean record. He believes that Corporate Security, by shopping around for the best coverage, gets better rates than municipalities, which must solicit bids.

Another major cost savings is in the pension plan—a major portion of a typical police officer's benefits. Robataille himself retired from the Aurora force at a relatively young age with a good pension. But because the Reminderville police are privately employed, they have a less lavish arrangement than the statewide police pension plan, which accounts for an average 14 percent of police salary costs in Ohio.

The cost savings have pleased city officials, but so has the quality of service. Robataille and Dudas are on their second negotiated contract with the village (which included a small increase over the $90,000 first-year fee) and should soon negotiate a third. Reminderville is proving, contrary to the fears of and objections to such a concept, that a private firm can provide good police services at substantial savings.

Across the country, in the small town of Oro Valley, Arizona, there is a different story to tell. On July 16, 1975, a private firm struck an agreement with Oro Valley to provide its 1,200 citizens with law enforcement, replacing service from the Pima County sheriff's department. But before two years were out, a state-governed professional body had made the path so difficult that the firm withdrew.

The firm was Rural/Metro Fire Department, Inc., which provides fire protection to about 20 percent of Arizona's population, including the city of Scottsdale. Rural/Metro offered Oro Valley a comprehensive protection package that included fire fighting, police services, a burglar alarm answering service, and paramedic operations.

Rural/Metro went farther than Robataille's firm in providing direct operations management of the police force. It agreed to establish a police headquarters and to keep all records according to the state guidelines for police departments. It would supervise and assume all liability for the conduct of its police. Oro Valley, however, would retain full control and responsibility for the force and could override Rural/Metro's authority at any time, so that the force would be under the control of the town marshal and there would be no possibility of the police acting independently of the citizens' wishes. Rural/Metro could decide what equipment and how many officers were needed to do the job, what salaries would be, and when a civilian could be used to do routine work like writing parking tickets and directing traffic. For a flat fee of $35,000 a year, the private company agreed to perform all these police services. That price was a substantial savings over what the town could have done it for.

After being implemented without incident, however, the agreement began drawing opposition from the Arizona Law Enforcement Officers' Advisory Council. Begun in 1968 as an advisory organization, with no power or authority of its own, the council grew over the course of several years into a quasigovernmental body with virtually ironclad authority to make decisions and take action. The only argument it could find to quash the arrangement between Rural/Metro and Oro Valley was a liberal interpretation of one state code that the council argued prevented an employee of a private firm from being a police officer.

"We could have fought it, and I feel confident Rural/Metro would have won," I was told by Fred Roof, who was with Rural/Metro when it signed the contract with Oro Valley. "We had to weigh what looked like some pretty high court fees to challenge the council, and we decided it just wasn't worth the cost. So we agreed to just provide the equipment, and we let Oro Valley assume all responsibility for its police force." (Interestingly, Roof started as chief of police under the employ of Rural/Metro and remained chief of police even after Oro Valley took over the force, although he resigned in January 1982 because of "small-town politics and backbiting.")

Oro Valley's experiment with using the private police force lasted nearly two years before Rural/Metro turned it over to the town. In that time there were no problems and no lawsuits, and the town was satisfied with its police service. The concept of full police privatization worked and was proving to be cost-effective. But in November 1977, Rural/Metro relinquished its police operations in Oro Valley and assumed a contract to, for $1,357 a month, provide vehicles and equipment to the force.

During Roof's tenure as Rural/Metro's police chief, he instituted various unconventional programs. Sometimes his officers used four-wheel-drive trucks instead of cars for patrol because they provided better visibility and could be used on difficult roads and even sandy areas. There was a "dark house" check instituted in which Oro Valley citizens would leave their names with the police department when they planned to leave for vacation and someone would check the home twice every 24 hours. Burglary rates in the 3.5-square-mile town dropped from 14 a month to 0.7 a month and stayed at that level.

The system worked well, and the transfer from Rural/Metro to Oro Valley was smooth and amicable. Roof and his officers became municipal employees, just as in most police departments. But things began to happen—financial things. The employees who had been handling administrative and other duties were replaced by town employees at a higher cost or by uniformed police offers at a far higher cost. The police officers gained a standard policemen's pension plan, which cost the town far more than the deferred compensation plan maintained by Rural/Metro. The officers—the same ones who had willingly handled the relatively simple job of protecting Oro Valley—began complaining to city officials that the work was boring and that they should get more money. In many cases, the town capitulated.

"We provided fine service, of course," Roof told me, "but it certainly was no longer what you could call a cost-effective operation." When Rural/Metro turned over total control of the department to the town, police service was costing Oro Valley $35,000 a year. The fiscal year 1982 budget is $241,000—a figure Roof says is "unnecessarily high." That budget, he explains, includes the salaries of two full-time police officers added since he left and personnel he believes the town doesn't need. In short, Oro Valley's has become a typical police operation with typical costs.

Reminderville and Oro Valley are two of the most aggressive efforts to date to privatize police forces and give the public better service at a lower cost. Oro Valley failed only because of a legal technicality and the effort by a state agency to gun down a novel concept without serious consideration of how well it worked. Reminderville, while a positive step toward privatizing a police force, fails to make the full jump by not giving Corporate Security, Inc., responsibility for assessing the cost effectiveness of the village's police force and determining—or at least serving as prime consultants in determining—the department's personnel needs.

There are only a few other known examples of American cities contracting out for their entire police forces. For several years Guardsmark, Inc., one of the nation's largest private security firms, provided the police force for Buffalo Creek, West Virginia. Wackenhut Services, Inc., has had several police contracts with small towns in Florida, including a five-year stint as the police force of the village of Indian Creek. But at the end of that time, for reasons of "civic pride," village officials hired the 15 Wackenhut patrolmen as permanent city-employed police officers.

Interestingly, private policing is rather commonplace in Switzerland. More than 30 Swiss villages and townships currently contract with a company called Securitas for police services. The Swiss Association of Towns and Townships reports that the contracts offer substantial savings over what it would cost these small towns (up to several thousand people) to run their own police forces. The typical contract provides for foot and vehicle patrol, building security checks, nightly closing checks of bars and restaurants, and ticket validation at special events.

One of the major obstacles standing in the way of privatizing police operations or even substituting civilians for uniformed employees in nonpatrol positions is opposition from the police unions. Although many police organizations rally behind the cry that only a police officer can do a police officer's job, the fact is that often they are simply trying to protect "uniformed" slots and create as many openings as possible for fully trained police officers. This history of protectionism, both among police organizations and within police departments, has a long and hard-to-break tradition.

For example, the city of Worcester, Massachusetts, instituted a program in 1976 that was partially funded by the federal government. Under a grant from the Law Enforcement Assistance Administration, a now-defunct arm of the Justice Department, the city instituted a "Public Service Aide" program. These aides, or PSAs, began to take over many of the traditional police duties to free police to do what they are specialists in—fighting crime.

The aides received a briefing course, and the first set of candidates went through police academy and had full training with the exception of self-defense and firearms. Subsequent trainees took a short course, going on duty with a veteran PSA and then taking the police training course when it was offered by the department.

At first, the police officers and their union had the standard adverse reaction to such a concept. The PSAs' competence was questioned, and fears were expressed that they might take rash actions. But they had special uniforms, completely different patrol cars, and different badges from those of the regular Worcester police. They carried no firearms and had no more power of arrest than an ordinary citizen. They were carefully instructed not to take any action themselves if they saw a crime in progress but to contact the department on their police radios. So it seemed virtually impossible for abuse of authority or "rash actions" to occur. Still, the union and many uniformed officers complained.

But Capt. John Hughes of Worcester's force told me: "The complaints didn't last long, though, when the officers realized that instead of having to detour traffic and take care of injured kids, they could concentrate their efforts on patrolling. In fact, they got pretty dependent on the PSAs." So dependent, in fact, that PSAs eventually ended up performing 30 percent of the duties formerly handled by uniformed police officers, including dispatching, writing reports, giving parking tickets and paramedic duty.

Not surprisingly, notes Hughes, the crime rate, which had been one of the highest for US cities of its size, plummeted. Not only were the police freed up to patrol more, but the additional PSAs—who were hired in addition to and not at the expense of the regular police—created an additional street presence and acted as a crime deterrent, reports Hughes.

The program began to die in 1981. After federal budget cuts and then state withdrawal of funding, the city decided not to maintain the program on its own and the PSAs were laid off in mid-1981. Today, the department has 100 fewer employees than it did two years ago, including 50 uniformed officers who have been laid off because of budget cuts.

If the PSAs did such a good job handling the mundane tasks and worked for considerably less money, why were they fired and uniformed police, making far more money, put back on the menial duties? Hughes, a staunch supporter of the PSA program, calling it one of "the best things in the country for a police department," answered the question candidly: "When it comes time to lay off, you lay off civilians."

But shrinking budgets may be forcing chiefs of police and city officials to rethink the influence of police unions and the concept of civil service and job protection. Apparently, many of them are beginning to seriously consider not only using civilians in posts traditionally staffed by police but to contract out for certain services if it costs less than using municipal employees. An ongoing survey by Hallcrest Systems of McLean, Virginia—management consultants primarily in the field of law enforcement—included all chiefs of police in cities over 50,000 population and all sheriffs in counties over 100,000. The study, the most recent survey of its kind, is yielding some interesting reactions.

In response to a question, for example, about turning over burglar alarm response to private companies, 57 percent of police chiefs surveyed said they would consider doing so. That is far less resistance to the concept of privatizing than existed in the mid-1970s when similar questions were asked in other studies.

Pat Gallagher, now a research specialist and formerly with the Police Foundation in Washington and the Institute for Local Self Government in Berkeley, California, notes that 94 percent of burglar alarms are false, and a burglary is actually in progress in less than one percent of all alarm responses. Even when the alarm does signal a burglary, the criminal has usually fled before police arrive, so in only a few cases does an officer's ability to make an arrest or use a weapon come into play. And the calls don't come cheap. Gallagher cites national statistics indicating that each response, provided free of charge in most cities, costs $20 to $25.

If this service were handled by private alarm firms, individual property owners could be billed for each false alarm. This would encourage people to be more responsible about setting and maintaining their systems, would put the burden of payment squarely on those who benefit from the service, and would free up police departments from the response and administrative hassle.

Private security firms like Wackenhut Services are already providing some response service. Because the private security firms have advanced communications capabilities, they can (and are instructed to) immediately contact police if they believe a burglary is in progress.

Police spokesmen throughout the country argue that private firms should not answer alarm calls because if they find a burglar they might shoot first and ask questions later or take some similar rash action. "That is a traditional fear and resistance you would expect to find among people who had done things a certain way for a long time," responds George Zoley of Wackenhut. "We encounter the resistance all the time, but the fears aren't usually rational." He is confident that "they will be broken down in time" because of the fact that so few burglar alarm responses involve a burglary in progress, making the instances of private security guards coming in contact with criminals extremely rare.

William Cunningham, president of Hallcrest Systems, says the preliminary results of his study and his talks with police departments indicate that an increasing degree of privatization and civilianization of police services is inevitable. "The money is just not there anymore," he explains. He found that surveyed police chiefs would consider using civilians or contracting with private firms for: parking and parking control, crowd control at large events, bank deposit escorts, housing project patrol, school crossing guards, public park patrol, funeral escorts, prisoner transfer, courtroom security, noninjury accident investigation, government building security, guarding hospitalized prisoners, crime lab work, on-scene recording of losses from burglary and taking reports from victims of crimes, office and dispatching duties, crime prevention surveys, parade security, and directing traffic.

In all, notes Cunningham, at least 80 percent of the work done by police departments is not crime-related. The majority of the time, a police officer's skill in handling firearms, breaking up domestic quarrels before they turn violent, catching criminals in the act, and physically fighting crime occupies a relatively small percentage of a police department's time. And as Captain Hughes of the Worcester force noted, the police presence of the PSAs, who had no authority but who had direct communication with the police department, was a very real deterrent to crime.

Resistance to actually contracting out police services remains strong, however, both within city hall and within police departments. But it is likely that this cost-saving alternative will be given more consideration as experience builds up with other city services that are increasingly being turned over to the private sector—especially street and sewer maintenance, garbage collection, park maintenance, and so on.

According to the Bureau of Labor Statistics, $22 billion worth of state and local public services were contracted out in 1972; that represented just 14 percent of all such services. By 1980 that figure had climbed to $66 billion, which amounted to 20 percent of all services. The International City Management Association, under contract to the Department of Housing and Urban Development (HUD), has just completed a survey of contracting out in 4,700 communities. The results, to be released shortly, are expected to show a further increase. And several recent books—Robert Poole's Cutting Back City Hall and E.S. Savas's Privatizing the Public Sector—have explained and documented the trend toward contracting out.

Even fire protection is increasingly being handled by private firms. The recently formed Private Sector Fire Association lists 14 profit-making fire services around the country, including the well-known Arizona firm of Rural/Metro Fire Department, Inc. (whose battle with a fire-fighters' union was featured several years ago on 60 Minutes) and the private security firm of Wackenhut (which won its first municipal fire protection contract in January).

Fire protection has been a somewhat easier service to privatize than policing because of the tradition of volunteer fire departments, which actually constitute 87 percent of all fire departments in this country. Interestingly, however, researchers James Q. Wilson and George L. Kelling noted in a recent Atlantic Monthly article that "until well into the nineteenth century, volunteer watchmen, not policemen, patrolled their communities to keep order."

Even the experts who favor the concept of privatizing police services say there will probably be a gradual change during the next decade and not any immediate shift. But the increasing use of private security personnel by industry and homeowners to supplement police protection, growing budgetary restraints that are forcing municipalities to be more conscious of spending, and a few positive examples like Oro Valley and Reminderville may prove to be the catalyst.

"We may have to start off gradually, like providing additional support for security at special events," predicts Zoley of Wackenhut. "Then perhaps police departments could use private companies for parking control, park patrols and support roles. It would be a gradual building process in which the private sector will establish a good track record and prove it can do the job. Agencies like ours have to prove ourselves to these departments, which are awfully traditional and set in their ways. But I see a future for it. I think, considering the shortage of government funds, it will be a necessity."

Theodore Gage is a free-lance journalist who has contributed to, among other publications, the New York Times and Advertising Age. This article is a project of the Reason Foundation Investigative Journalism Fund.