The City of San Carlos has a novel solution to help fix its $3.5 million budget shortfall. It's considering contracting out police, park and fire services.

Two agencies-the Redwood City Police Department and San Mateo County Sheriff's Office-have already submitted bids to take on crime in the city of 28,500 located halfway between San Francisco and San Jose.

The proposals come at price tags ranging from $5.8 million to $6.8 million. San Carlos had been projecting an $8.9 million budget to pay for its 38-member police department.

Jeff Maltbie, administrative service director for San Carlossaid the city would take into account not only what makes financial sense, but also how the services will impact residents "today and in the long-term."

City council members will have until June 30-the end of the fiscal year-to decide whether or not they will outsource the police and park services.

The city will let go of five employees this month, and if the council chooses not to contract out the police services, the city will likely face another round layoffs incoming months. The time frame for dismantling the fire department, which shares a service-agreement with the nearby city of Belmont, is different. The Belmont-San Carlos Fire Department, which was created in 2006, has 42 full-time employees and four fire stations, two of which are in San Carlos.

The fire department serves Belmont, San Carlos, Harbor Industrial Area and areas of unincorporated San Mateo County.

Maltbie said San Carlos will have 18 months to dissolve the joint-service department.

The city would then examine their options on who would provide their fire services.

The next city council meeting is scheduled for June 28.

Here's an edited version of my conversation with Administrative Service Director Jeff Maltbie:

ROSA RAMIREZ: What is the next step for the city?

JEFF MALTBIE: The proposals are currently under review. The San Carlos City Council will have to make the final determination whether or not the city will do this. On June 28, there will be a report to the city council with the pros and cons of the various service model proposals.

If this is not a solution that the city council or community feels comfortable with, we still have to make equally dramatic changes. The budgets for the police and fire departments are 65 percent of the city's budget. If we don't outsource, we're going to have to layoff another 15 to 20 city employees in July or August.

When will residents see these changes?

MALTBIE:It could be a few months to six months, possibly by the fall of this year. San Carlos and the city of Belmont have joint fire departments. The city is in the process of dissolving that relationship. In terms of the police services, there's certainly a difference in the proposals. The [San Mateo] County Sheriff's Office proposes to take all the city's full-time employees and offer them jobs. Redwood City cannot guarantee that for any of the San Carlos employees.

How many people will be affected by the changes in the police department?

MALTBIE: The police department has 38-employees, from police chief to police officers and all the civilian staff.

What type of feedback has the city received from residents?

MALTBIE: The feedback has been relatively mixed. There are people who feel that this is something that the city should consider. People are calling for more efficiency in government. When they're faced with what efficiency might look like, they're faced with real tough choices. Some people are concerned that the city will lose local control.

Two agencies have submitted their proposals. Do you expect to get proposals from other agencies?

MALTBIE: I think these are the only two that we'll get. We told agencies in cities and counties at the beginning of this year that we would have an interest in doing this. And that if they had any interest on their part, to submit proposals. Redwood City and the San Mateo Sheriff's Office were the only ones who did.

What will happen to the physical building of the police department? Who will maintain it?

MALTBIE: The police department is located inside of City Hall. There's a real possibility that the service provider will want to maintain a presence here.

Did San Carlos hold meetings to give residents a chance to voice their opinions on these changes?

MALTBIE: We had two special budget study sessions. One in March, on a Saturday, and another one about a week later, on a weeknight, that were dedicated to the budget. This was particularly for residents. We sent letters and emails.

If the police services are outsourced, how will the new agency providing police services maintain a rapport with residents?

MALTBIE: That's one of the questions that we had for the agencies.

The sheriff and under-sheriff basically said, "Look, we're planning on hiring over your employees. They'll be doing the policing. They're going to be deputies instead of police officers. These are individuals who are already working in your city."

Redwood City said, "We are the community next door." The officers are trained the very same way. The types of people and calls that they get are no different than here. Developing the rapport with this community will not be difficult.

It's tough to know that you may lose your job. Do you have a sense of what the morale is at the police department?

MALTBIE: I give them tons of credit how they have handled it. City employees continue to do their best and are continuing to do their jobs. They come to meetings and participate. The San Carlos City Council meets at 7 p.m. each 2nd and 4th Monday of every month in the Council Chambers.