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Interlocal Advisory Center

 

Q&A with the League's Shared Services Consultant, Gregory Fehrenbach

1. How difficult is it for local governments to share services?

The difficulty depends upon the context of the service and amount of change involved in the process.  First, there must be political will to pursue creation of a joint service.  There will always be some rough spots, either operational, personnel or fiscal impacts that will need to be surmounted.  Second, a vacancy in a leadership position such as the service's director position makes sharing or jointly providing a service much easier.  Third, "participant buy-in" will increase the probability of success.  Decision making should be a participative affair, not a dictate from a distant authority.  All affected parties need to understand the financial, programmatic and personnel reasons for and impacts of the proposed change.  This is often the reason municipalities complete formal or informal feasibility studies before initiating a joint service.

2.

What are some of the steps that local governments should take when exploring the possibility of sharing services?

  1. Preliminarily identify the service you wish to examine and/or the agency with which service you would like to share the process.
  2. Sit down with staff to identify services that they voluntarily consider ripe for sharing or joint provision.  Meet often to discuss the matter and keep staff thinking about opportunities for sharing.
  3. Create regular meetings to discuss opportunities for sharing with both staff and sister/brother agencies.  Both agencies should continuously question staff about sharing or joint service opportunities.
  4. Search for service units that seem to have resources that are not fully expended and can be offered to other agencies or service units that need additional resources that might be obtained from other agencies.

3. Why is a feasibility study important?  Are there any steps that should be taken before implementing a feasibility study?

It is not always clear that all of the financial and operational elements of a joint service will actually work.  A feasibility study will provide elected and appointed managerial officials with insights into the operation and identify financial, human, capital and other resource impacts permitting a more reasoned and responsible decision regarding possible sharing.

 

4. What are some common problems that local governments encounter when attempting to implement shared service agreements? 

Employees worried about loosing their jobs, ceasing to receive salary increases, getting more work without added compensation, loosing prestige or access to decision makers, loss of decision making power/authority/etcetera, disbelief in potential efficiencies, increased service levels, higher efficacy from the joint service or any combination or all of the above.

Do you have any suggestions for possible solutions to these problems?  

  • Include the affected employees in the process from the beginning and all along the way.
  • Conscientiously review the feasibility issues regarding personnel, financial, capital and other resources to assure their accuracy and reasonableness. -Show that sharing can work by choosing service units that are ripe for joint administration as early success stories.
  • Document your experiences with the first joint service to clearly and objectively determine if the action was financially or operationally successful, in other words, it met expectations.

5. Are there any negatives to sharing services?

Sometimes it is not beneficial to jointly provide services:

  • it may not reduce or stabilize costs;
  • it may not reduce capital expenditures or reduce other costs;
  • it may require part time employees who do not receive benefits to become full time employees and receive benefits with the attendant costs;
  • it may affect some intangible that one participant considers more important than saving tax dollars;
  • it may create personnel administration issues;
  • it may cause a well run non-civil service personnel administration to come under the jurisdiction of the NJDOP (civil service).

6.

That said, what are the benefits to sharing services?

Ultimately, the primary objective of joining with another agency to provide a service is to increase efficiency and/or effectiveness.  It is necessary that both parties in the sharing arrangement gain something: either a lower cost for the same service level or an improved service - a higher service level or more people served.  Other benefits may be increased capacity or capabilities.

Some Examples:

1. By joining with another municipality to provide health services the cost to your own municipality falls from $200,000 per year to $175,000 per year.

2. By joining with another municipality to provide recreation services, the number of participants increases for both municipalities by 25% without any increase in costs.

3. By joining with another municipality, you do not need to buy a new sweeper, but your partner receives $5000 per year for the rental of their sweeper to you.

4. By joining with another municipality, you will now sweep your streets five times per year instead of only two times per year at no added cost.

 

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