How Shared Services Saved Somerset County $9.74M
by Tom Sharpe
Vice President, Government Affairs for the Somerset County Business Partnership
It is with extreme confidence, and a certain amount of bravado, that governing officials and business leaders in Somerset County affirm that not only did sharing services begin in our communities, but Somerset continues to be a model for communities across the state. A recent release of a documented report prepared by the Somerset County Business Partnership details nearly $10 million dollars in shared service savings by 31 government entities over a five-year period. The document provides irrefutable proof that 1) sharing services works, 2) There is a positive impact on the pocketbook of the residential taxpayer 3) sharing services can ensure continuation and expansion of routine municipal services while moderating costs.
The Genesis In 1993, the Somerset Alliance for the Future, a business advocacy organization focusing on quality of life issues in Somerset County (and one of the three organizations integrated into the Somerset County Business Partnership in 2002), formed the Somerset Shared Services Neighborhood Group (SSSNG) to encourage local governments and school districts to share services for greater efficiency and taxpayer savings. The focus was on creating workable programs with a financial benefit that would outweigh proprietary issues and overcome home rule. The initiative was supported by Somerset County’s state Legislators, the Board of Chosen Freeholders, mayors, municipal administrators, and school district officials. Start-up funding was received from a County Challenge Grant from the New Jersey Department of Community Affairs and a Regional Efficiency Development Incentive (REDI) Grant.
The defined objectives of the SSSNG were: 1) identify the most promising services to share between towns, between towns and the county, and among towns and school districts 2) facilitate numerous new shared service agreements 3) remove legislative barriers to sharing services 4) expand communication among entities with potential to share services, and 5) serve as a model for the expansion of sharing services.
The early wins were many and accounted for hundreds of thousands of dollars saved annually by municipalities, school districts, and ultimately, the taxpayers. For the fall of 1997, the SSSNG report documented 34 examples of money-saving shared initiatives, from the saving of a few hundred dollars when Bridgewater employees completed Raritan’s fixed asset inventory at half of the contractor’s rate, to the hundreds of thousands saved when Branchburg constructed a single fuel facility, instead of two, accommodating both the township and the school district. In other instances, municipalities entered into agreements to share otherwise unaffordable state-of-the-art or seldom used equipment that they independently would not be able to purchase.
Now renamed “Somerset Shared Services,” the organization has grown dramatically with annual dues paid to the organization by the Somerset County Board of Chosen Freeholders, Raritan Valley Community College, Somerset County Vocational and Technical Schools, Somerset County Educational Services Commission, municipalities, and school districts reaching nearly $100,000.
Resurrecting a Universally Established Principle Sharing services is a philosophy on which our country was built. Pete Seeger, folk singer and noted environmentalist explains that we have reached a point in our evolution as a nation where we must revert to those principles that brought us to where we are today. As a people, we must develop a mind set to share as our ancestors did out of necessity in a simpler time. Though we cherish our independence, this same independence is threatened by a shortage of natural resources and the costs associated with independent living.
Since the mid-1970’s, the Interlocal Services Act and the Consolidated Municipal Services Act have permitted municipalities and other government units to establish “interlocal” agreements to provide “jointly any service or function which any one of them can provide for itself.” The basic purpose of the legislation is to provide a mechanism to reduce costs while maintaining or improving levels of service and overcoming the issues of home rule, parochialism, service control and local identity.
To further advance the cause of sharing services, Governor Christine Todd Whitman signed Executive Order #88 on September 16, 1988, which directed all state agencies to provide staff assistance to local officials in the planning and evaluation of new interlocal shared service programs and activities. Additionally, the state Legislature initiated two programs to advance the cause with the establishment of the REDI and REAP programs which established a funding resource devoted to shared services programs and interlocal agreements.
Somerset County - A Model for Shared Services Somerset County has long been a leader in the development of shared service initiatives. In 1978, the boroughs of Raritan and Somerville combined their health departments to reduce operational costs and increase efficiencies. In 1981, Manville joined the organization, forming the first inter-municipal agency in Somerset County and one of the first in the state. This combined department continues to operate today, sharing a health officer and staff to provide a high level of service in a single office serving the residents and businesses in three municipalities.
Over the past decade and more, Somerset County, its municipalities and school districts, have served as a statewide and nationwide model for successful local government shared services initiatives with established interlocal agreements for sharing of personnel, equipment and services realizing millions of dollars in savings for Somerset County taxpayers.
Two significant additions to the governmental landscape in Somerset County were a result of shared services. In October of 1995, the State Planning Commission designated the Borough of Somerville, the Borough of Raritan, and a portion of Bridgewater Township as the state’s first inter-municipal Regional Center under the State Development and Redevelopment Plan. The intent of the designation was “to promote economic growth, development and redevelopment, ensure sound and integrated planning, provide adequate public services, provide adequate housing, preserve and enhance historic resources, open space and recreational opportunities in the Center.”A second outgrowth of the successful Shared Services initiative was the creation of the Somerset County Improvement Authority in 2002. This Authority provides the opportunity for local municipalities to save more millions through cooperative purchasing of equipment, supplies and services utilizing the borrowing power of Somerset County government.
The Somerset County Shared Services Network now includes 31 government entities with a commitment to saving taxpayer money and increasing efficiency in the areas of:
• Cooperative Purchasing Programs
• Personnel sharing
• Joint personnel training
• Specialty Department of Public Works crews
• Shared use of county personnel, equipment & services
• Document imaging
• County-wide Geographic Information System planning
• Enhanced data information
• Open space acquisition and coordination
• School/town & school/school sharing initiatives
• Coordinated Department of Community Affairs grant funding
The issue of school district sharing is of key importance because savings in this area have the most direct impact on the property tax bill. “The savings that we can effect for the schools through the Shared Services Network will have a discernible impact on the taxpayer. Each dollar saved is will trickle down to the dollar figure appearing on every property owner’s tax bill.”
The recently released “Shared Services Update” details the five-year success of the ongoing program initiated with $274,675 in Challenge Grant money from the State of New Jersey REDI program. Major projects included in the Challenge Grant initiative are the Six-Town Municipal Center for Shared Services; Somerset Ambulance Shared Service Alliance (SASSA) organized in cooperation with Somerset Medical Center and providing daytime backup ambulance service; shared municipal construction/code positions; continuing municipal court studies; shared municipal court facilities, equipment, and staff; shared municipal employee training; joint programs with Raritan Valley Community College & Somerset County Vocational and Technical Schools; Geographic Information Systems (GIS) information exchange. The project also encompassed computers and technology; personnel and labor negotiations; salary surveys, shared positions; DPW information exchange; purchasing through the Somerset County Improvement Authority; joint bidding and purchasing; school/town sharing; interlocal agreements resulting in operational efficiencies and taxpayer savings; government affairs; tax stabilization/government efficiency. The documented result is a saving of $9.74 million dollars.
Somerset County is proud of its position as a model for the state and its leadership is committed to maintaining that position through innovation creativity and cooperation. Independence, the very basis of what made our country great, is now the root of one of our most personal financial problems, the ever increasing cost of government that is passed down directly to the business and residential taxpayer. Though we must work for, and fight for, maintenance of our independence, we must be aware that sharing and cooperation are principles of necessary and equal importance. Not sharing services is part of the problem that led to the property tax predicament that we find ourselves in today. It’s good to know that there are those who are advocating expanded shared services to get us back to our roots. s
Resource: Local Government Shared Services and Municipal Consolidation: A Report and An Agenda, August, 1995. New Jersey Department of Community Affairs.
Originally published in the October 2003 issue of New Jersey Municipalities, pp. 54-66.