Shared Services: A Solution for Local Governments

Appearing online in the April 2013 edition of the Business News Online

http://www.thebusinessnewsonline.com/ncw/index.htm

It’s no secret local governments are experiencing financial challenges. Large economic, technological and political forces are threatening traditional service portfolios. Those of us working in local government management generally expect these forces to be part of a “new normal” that includes shrinking revenues, historic cuts to state-shared revenue programs, budget and subsequent service reductions, public employee labor and salary reforms.

The challenge of managing local agencies in this new environment will require local government to seriously evaluate its service offerings and assess which business practices will be preserved.

As administrator for the Village of Weston, this is a critical business issue for us as well as many other units of local government throughout the state. Because of these challenges, without alternatives, we can expect future services to be reduced or eliminated. Fortunately, I do not think we have reached the point where the only alternative is a choice of have or have not. A preferred strategy that deserves more attention and energy is an effort to merge and consolidate services among multiple communities.

The Village of Weston already has a proven track record with intergovernmental partnerships. The village jointly shares the Everest Metro Police Department with two other local communities. Our Fire and EMS department responds to calls both in and outside of our village. The village’s street department services citizens in both the village and Town of Weston. For Weston, shared services have been one of our strategies to provide existing services at a reduced cost to our taxpayers.

In an effort to build upon this success, we have explored other possibilities including sharing a director of public works management team with the Village of Kronenwetter, sharing a deputy clerk/treasurer with the City of Schofield, participating with the City of Wausau on a study of fire and rescue services throughout our metro area, and conducting a management study with the YMCA to see if it can manage our local aquatic center for less cost than the village can. We will continue to pursue all additional possibilities for shared services in the future.

By comparison, mergers and consolidations are a fixture of competitive practice throughout business and industry. The news has reported on the decision of companies like Office Depot and OfficeMax, as well as U.S. Airways and American Airlines, to merge their corporations. The prevailing wisdom is mergers and acquisitions makes sense. Given the enduring economic stagnation, private businesses must make adjustments to maintain service expectations and enhance profitability. For those who believe the axiom “government should work more like a business,” this approach should be a no-brainer.

Despite many successful, cost-effective examples of municipal service cooperation, the political motivation to explore this strategy as an alternative to our increasing financial challenges remains tepid. There are many reasons for this. Generally, the effort to build teams and create trust in the public sector takes time, involves work, and often boils down to the character, leadership, and future-focus of the people participating in the effort. Specifically, some political leaders fear a reduction in power, oversight and control. Some public employees might attempt to obstruct these efforts out of concern for their employment or because they are concerned about how consolidation could affect and alter the workplace environment. Some citizens might resist because they have a strong emotional attachment to their community and exhibit a strong sense of pride-of-place. They fear service consolidation will translate into the loss of their community’s unique historic identity.

While I realize these are very real concerns, I truly believe municipal service cooperation is an opportunity to improve upon a proven system of service delivery, in which shared oversight among municipal agencies leads to increased opportunities as the cost of providing exclusive services is carried by more consumers. The advantages, in my opinion, far outweigh the concerns, including reduced costs to taxpayers, preservation of traditional and anticipated services levels that have been threatened by reduced revenues, increased opportunities to hire and retain specialists in the local government arena who would otherwise be unaffordable for individual agencies, and sharing talent and expertise to address and solve problems across political boundaries. All this can be done cooperatively and still allow for individual communities to maintain their identities, local elected leaders, local ordinances and separate rates of taxation.

Gov. Walker’s State of the State Speech laid out five priorities for Wisconsin in the next two years, one of which included government reform. With this goal in mind, I can think of no better solution than working with our leaders in Madison, and supporting those who represent us in our local towns, villages, and cities to vigorously pursue cost-saving opportunities. It is my hope local taxpayers will support these efforts and call for action as a means of both preserving quality services and responding to the challenges of decreasing revenues and increasing costs.

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