The council decided unanimously Tuesday to create a 13-person, in-house information technology department to replace a costly private contractor.

Finance director Bob Locke said the city had been outsourcing IT services for the last 18 years, but recent developments were causing other California cities, such as Campbell and Riverside, to pull out of contracts with Texas-based Affiliated Computer Services, which has a monopoly on the small city government market.

When the company started demanding substantially higher fees, the city decided earlier this year not to renew its contract, worth $1.5 million annually.

Locke said the use of outsourcing for IT has kept the city from recruiting and retaining quality IT employees. Meanwhile, ACS had high turnover rates and often left positions open for as long as possible, Locke said, which led to regular discussions between Locke and ACS.

Locke said the city expects to save millions in the first few years of having in-house services, even while paying its IT employees better than ACS did. The 13 employees who now work for ACS may be evaluated by an outside consultant to determine whether they will stay, said city manager Kevin Duggan.

— Daniel DeBolt

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