Shared Service Agreements Overcome Challenges, Improve Services

Transcription

1 Shared Service Agreements Overcome Challenges, Improve Services

2 Speaker Introductions Benjamin H. Syden, A.I.C.P., E.D.P - Director of Planning and Community Development

3 Presentation Outline I. Shared Services Defined II. Overview of Shared Services Study/Process III. The Ten Step Process Ten Step Process for Shared Services Arrangements IV. Keys to Success V. Questions and Answers

4 Shared Services Defined

5 Shared Services Defined An approach or arrangement by which two or more municipalities address municipal service delivery. Shared services approaches vary in complexity and intensity. Shared services can be formal or informal, involving inter-municipal agreements or handshake agreements without exchange of dollars for services provided. Approaches to Shared Services Cooperation: communicating and sharing information Coordination/Collaboration: sharing equipment, facilities, staff, and revenue Consolidation: transferring functions and sharing services among jurisdictions Dissolution or Merger

6 Shared Service Options Cooperation: Informal and short-term Exchanging information is all that each of the partnering municipalities expect Residents and the community as a whole perceives a duplication of services Cooperation rewards all participating municipalities equally Municipalities that create cooperation directly benefit

7 Shared Service Options Coordination/Collaboration: Longer term requiring a deeper working relationship, but is still not a formalized operation Achieving economies of scale for a one-time event or short-term project Potential partners share common short-term outcomes or plans Shared resources will help potential partners accomplish short-term objectives Potential partners need to maintain their individual identities within the context of the event or short-term project The overall service system of which you are a part of requires significant changes To achieve economies of scale, the issue must be addressed at a much larger scale and with more resources than any one municipality has The challenge is complex and requires long-term, multiparty commitment

8 Shared Service Options Shared Services and Consolidation of Services: A highly integrated approach to restructuring government services. Presents both major opportunities and challenges Enhanced capacity to deliver needed services Expansion of geographic reach of services Less competition for funding resources to support municipal services Integrating municipal cultures into productive and efficient partnerships Correctly estimating the time, effort, and financial resources required to reach operational stability Shared service can be accomplished through intermunicipal agreements (IMAs) Consolidation of services may include the elimination of employees and potential loss of identity and is considered much harder to achieve

9 Shared Service Options Municipal Dissolution or Merging units of government: The most dramatic form of restructuring. Warranted if the unit or service deliverer can no longer function, i.e., Going out of Business If it is more efficient or otherwise advantageous to have the service provided by some other entity

10 Why Shared Services? Duplication of Services 10,521 overlapping government units exist in New York State Growth in Service Demands & Cost Stagnant & Declining Tax Bases High Unemployment Rates Declining State Aid & Funding

11 Efficiency The Primary Objectives of Shared Services To increase efficiency and effectiveness of local governments To achieve cost reductions based on economies of scale and better leverage To eliminate or minimize duplication of services To share resources and specialized skills To improve service through timeliness, quality and cost management of common services Cost To develop a cost effective model that is based on best practices, yet remains consistent and accountable to the people To focus on services that can be better provided through sharing or consolidating than they could by individual agencies

12 Types of shared services that residents support Public transportation Road and highway maintenance Park and recreation programs Prisons Public libraries Garbage, recycling and yard waste collection Public water and wastewater Most Contentious Areas Police Fire School Districts Back office functions, i.e., assessment, accounting, code enforcement, economic development and planning

13 Reasons for Supporting Shared Services Quality of local government services improves Businesses are more interested in locating to an area Property taxes decrease Cost of local government services decreases If not saving money, it makes things more efficient Duplication and overlap of services is reduced The government receives grant money or other incentive

14 Reasons for Opposing Shared Services Property-owners would have less say in what happens in local government Change increases the cost to your community, but lowers the cost for another Your community loses its own identity People lose their jobs Your government cannot make its own decisions, but has to compromise with neighboring towns or cities There are no cost savings for you

15 Key Forces for Change What changes would you make on a government do-over day? In the current economic climate, spending of any kind is under the microscope and the pressure to cut back is intense Government organizations must strive to meet the implications of massive debt and loss of revenue sources Current service delivery is often redundant, inefficient and nonstandardized Regionalized service delivery is sometimes considered unresponsive, detached and inflexible Municipal responsibilities are becoming increasingly complex and demanding

16 Appraising Your Shared Service Options Key Questions: What are the driving forces for collaboration? Who will the partners be now, and in the future? What are the ambitions of the partnership? What services and processes are within your scope? What collaboration model is preferred? (i.e., shared services agreements, functional consolidation, full consolidation,) What are the potential barriers and roadblocks? Where will the shared service be housed?

17 ... Appraising Your Shared Service Options Key Actions: Assess the feasibility of shared service options and their attractiveness over other alternatives Determine what organizational changes will need to take place Benchmarking: Understand where you are now and where, individually and collectively you could be if a shared service agreement were introduced Where are policies and processes unclear or poorly designed? Where is quality assurance absent? Where are lines of communication and responsibility unclear? Do the partners diligently track labor hours by function in a standard format?

18 Questions to Consider The following are examples of questions that a municipality should consider when conducting a shared services study: What organizational changes will take place? What is the impact on existing personnel? What positions would be eliminated or replaced? What will the impacts be on personnel terminations, retention, pay policy benefits, etc.? What are the benefits & the degree of efficiency that will result? What are the negative consequences? Is there a measurable cost saving to residents from sharing services? How is the taxing structure for residents going to be allocated?

19 Does it make sense or cents? Economy: Will the proposed cooperative arrangement reduce the current program s costs now or in the future? Efficiency: Will the proposed cooperative arrangement improve the current delivery of program services? Effectiveness: Will the proposed cooperative arrangement allow local governments to deliver needed services that are qualitatively improved or that each would find difficult to provide individually? Economy Effectiveness Efficiency Source: NYS Office of the State Comptroller, Local Government Management Guide, 2009

20 Overview of Shared Services Study Process

21 Overview of Shared Services Study Process Inventory & Analyze Existing Conditions Identify Opportunities & Alternative Models of Service Delivery Involve Stakeholder & Public Fiscal Analysis of Alternatives Implementation Plan Benchmarking

22 Inventory & Analysis Data Collection Review Existing Plans and Studies Review Capital Projects, Plans and Budgets Review Organizational Staffing Plans and Union Contracts Review Existing IMAs Inventory of Equipment, Facilities, Personnel and Other Resources Data Collection Methodology Municipal and Departmental Questionnaires and Interviews with Elected Officials, Department Heads, Financial Representatives, Legal Representatives Roundtable Discussions

23 Fiscal Review Examine the Fiscal Health of the Community: Total Expenditures and Revenues by function and by department Assets (capital, equipment, facilities) Outstanding Debt Tax base (taxable assessed and full value of real property, special district taxes)

24 Shared Services Opportunities and Alternatives Development of Shared Services Opportunities & Fiscal Impacts Identify the potential opportunities for shared services Review the advantages and disadvantages of each Identify Alternative models of service delivery Evaluate fiscal implications and prepare cost/benefit analysis Potential opportunities may include: Possible reductions in total costs Savings in equipment and maintenance costs Improvements to service delivery Changes in organizational structure

25 Public Outreach Community Education and Outreach Community Survey Community-wide Workshops Educational Seminars Public Hearings

26 Fiscal Considerations of Shared Services Options The municipal partnership must consider: The potential to achieve cost savings and/or efficiencies and the tax impacts of the alternatives The potential for savings from sharing costs and avoiding costs Each entity's assets, including but not limited to real and personal property, and the fair value Each entity's liabilities and indebtedness, bonded and otherwise The hidden costs or secondary impacts of sharing/consolidating services, i.e., union contracts, impact on revenues, future costs of personnel (benefits, advancement within new organizational structure)

27 Understand the Perceived Barriers/Obstacles Fear of loss of control or community identity by one or more of the involved municipalities Fear of job loss, pay scale change, responsibility, change in organizational structure, policies and/or place of employment Fear of degradation of service provision Fear of the unknown change is unsettling The perception of what is lost and what is gained. Cost tradeoffs one party may realize savings while another may see costs increase

28 Common Challenges in Shared Service Studies Lack of public education and involvement in key decisions Why change? Hand shake agreements seem to be working? Unions - consolidation of staffing entails bargaining and consideration of pay equity Lack of comparable record keeping and detailed cost accounting practices Lack of labor force utilization tracking, making it difficult to identify the labor hours necessary to perform a specific function Lack of committed leadership

29 Scope of Service Consider the Size and Scope of the Approach Shallow Deep Narrow Size of Partnership Toe in the water Joining Up Broad Focused Evolve Toe in the water: Begin with two partners sharing a service manager Focused: Enlarge the number of partners sharing a service manager and one or two services Joining Up: Two or three bodies consolidate one or two services Evolve: Two or three bodies expand the range of shared services and include other partners

30 Ten Step Process for Shared Services Arrangements

31 Ten Step Program for Shared Services Arrangements 1. Define the problem: Make sure that there is a problem to be solved and never assume that sharing municipal services will always be more cost effective 2. Identify potential partners: Identify and include all affected parties and find a common ground. Shared services arrangements will only work if you have a common ground and agree upon a common goal 3. List and Allocate Financial Impacts: Determine the cost of current service provision and tax and debt limitations. Next, identify methods for financing, including potential federal/state aid. Then, assess the impact on the tax rate. *The Ten Step Program was developed by NYSDOS

32 Ten Step Program for Shared Services Arrangements 4. Confirm legal authority: Consult state statutes, for example, NYS General Municipal Law articles 5-G and 14-G, as well as Town, Village, County and other related laws 5. Plan the Project: Document the need for services, determine costs and financing, prepare impact statements for constituents and on other services, and develop a plan for implementation and assessment 6. Collaborate with affected parties: Discuss plan with constituents, non-profits, businesses and local organizations 7. Negotiate the agreement: Identify the necessary items to be included, identify a facilitator to assist negotiations, and finalize terms *The Ten Step Program was developed by NYSDOS

33 Ten Step Program for Shared Services Arrangements 8. Prepare the agreement: Terms should be memorialized in some manner regarding involved parties, nature of agreement, level of service, limits on service, charges/financing arrangements, organizational control and responsibilities, reporting, personnel, duration, termination, amendment, evaluation and continuation 9. Implement the agreement: Initiate programmatic elements, communicate with town constituents and document all aspects of the project 10. Evaluate the project: Examine the implementation to ensure proper function, convene regular meetings to assess and share information, prepare formal evaluation reports *The Ten Step Program was developed by NYSDOS

34 Steps to Developing Intermunicipal Agreements Identify services to be shared Identify parties to agreement Determine whether to draft a single agreement or separate agreements with each municipality Determine duration of agreement Determine a method or formula for equitably allocating revenues and costs Determine the manner of employing and compensating personnel Determine the acquisition, ownership, operation, maintenance, and lease and sale of property

35 Steps to Developing Intermunicipal Agreements Determine the manner of handling any liabilities that might be incurred in the operation of the joint service and obtain adequate insurance coverage Determine custody by the fiscal officer of one of the participants of any or all moneys made available for expenditure for the joint service Determine periodic review of the agreement, including terms relating to its duration, extension or termination Determine adjudication of disputes or disagreements Determine collective bargaining issues, if any Determine town taxation issues, if any Draft agreement

36 Keys to Success

37 Keys to Success Balance community values versus cost savings opportunities Build consensus Build partnerships Must have committed leaders Remember the 4 C s Communication Coordination Collaboration Cooperation

38 Balancing Community Values vs. Cost Savings Cost Services Cost Services Cost Services Cost Services Cost Services

39 Balancing Community Values vs. Cost Savings Sharing/consolidating municipal services does not always amount to significant cost savings Decisions are based on balancing: Results of the Fiscal Analysis Political and Community Will Success is dependent on managing the public perception that small governments are more accountable The perceived negative impact on service quality may outweigh the cost savings There is no one-size fits all approach Cost to Deliver Services Community Values & Service Demands

40 Manage Uncertainty & Fears: Build Consensus Stakeholder Involvement: Key Actions: Engage staff early in the process to identify shared values and interests Identify areas of common ground and benefit Build consensus on partnership working and shared services Emphasize the contribution sharing can make to community goals Explain the various mechanisms that can be used (i.e. contracts, governance arrangements, service level agreements) Stakeholder Interviews Roundtable Discussions Department Head & Staff Surveys

41 ...Building Consensus Managing Change Many issues identified are symptomatic of the prevailing culture Shared service arrangements demand skills and resources in moving from one way of working to another Key Issues to be Dealt with: Identify and correct shortcomings in current systems and processes Introduce new systems and procedures that will ensure continuity of service Develop systems needed to ensure that costs are managed and benefits realized (i.e., cost tracking and standardization ) Anticipate risks created by the transition and develop policies, procedures and mitigation plans to deal with them

42 Build Strong Partnerships for Implementation Craft a Common Vision and Stress Open Communication Work with partners to develop a clear vision and plan Communicate the vision to all relevant stakeholders Allow all relevant stakeholders to be involved in fleshing out the vision Ensure that the goals and values of the partnership are clearly articulated Deal with concerns and misconceptions Ensure the rationale shows the contribution of each partner Explain to individuals and groups the benefits they can expect

43 Strong Committed Leadership = Success Understand areas of weakness and contention Political support and resources are keys to success Be aware of the effects change will have on employees and public opinion Pick the low hanging fruit Initiate early dialogue with all stakeholders union officials Build commitment among staff to a new way of working Put the interests of customers above narrower political concerns Be willing to fight the fight Effective collaborative working is first and foremost a human resources and political challenge.

44 Questions and Answers... For further information contact: Laberge Group Benjamin H. Syden, AICP Director of Planning & Community Development website: