Interlocal Cooperation, Shared Services, and Community Resilience

Community and Economic Development – Blog by UNC School of Government

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Interlocal Cooperation, Shared Services, and Community Resilience

By Rick Morse

Published February 15, 2012

Rick Morse is a School of Government faculty member.

In my last post I highlighted the importance of interlocal cooperation as a key strategy for local governments to “do more with less.” I would like to share a couple of short articles that connect to this line of thinking and make a connection to the idea of community resilience.

First, regarding the fiscal crisis local governments face, most experts agree that this is a long-term problem. While some describe this period as “the new normal,” Bill Barnes of the National League of Cities, citing the work of his colleague Christopher Hoene, points out that a more appropriate term would be that we are returning to the “old normal.” The Great Recession has only exposed “a lot of underlying challenges in our system of public finance.” In other words, the impacts of the great recession are not short term. Barnes says that

“It’s beginning to look a lot like a long slog ahead. So, unconventional thinking, scenario planning and wondering what short-term actions will mean for the longer term seem in order.”

Indeed, for communities to not only survive, but thrive, in this state of long-term fiscal crisis, they will need to be open to doing things differently. Interlocal cooperation is high on the list of innovative approaches some local governments are turning to.

There are many different forms of interlocal cooperation, but one that is receiving increased attention nationwide is a strategy often called “service sharing” or “shared services.” The core idea is that multiple jurisdictions can achieve greater economies of scale by pooling resources to cooperatively provide a service. This can take the form of multiple jurisdictions contracting with another jurisdiction (so that the service-contracting jurisdiction becomes, in effect, a regional service provider). It can also take the form of multiple jurisdictions pooling their resources to contract out a service to a private (or nonprofit) vendor. Another variation involves multiple jurisdictions creating a regional service entity (such as a regional 911 center). In this scenario the partnering jurisdictions co-own and co-manage a shared service agency. These forms of shared services functionally consolidate services, which may be more politically palatable than true political consolidation.

The State of New Jersey has recently been taking the shared services concept to a whole new level, though there is some controversy in the driving force behind it. Governor Chris Christie (R) and Senate President Stephen Sweeney (D) have championed shared services and are pushing for a “stick” approach to incentivizing shared services in the state. Sweeney’s bill would set up study commissions at the county level “to determine whether tax dollars could be saved through consolidation of services.” According to a recent article in NJ Spotlight:

“Where cost savings are identified, voters in the affected municipalities would be asked to approve the shared services or consolidations recommended. Any town whose voters failed to pass the recommended shared service proposals would lose state aid in an amount equivalent to the projected cost savings.”

This is clearly a dramatic approach that some would argue threatens local autonomy in what is known as a “home rule” state. On the other hand, the public championing of shared services at the state level is clearly having an impact. The article mentioned above highlights efforts to merge school districts and police departments, two areas where shared services might yield significant cost savings but where politics are almost always an insurmountable barrier.

Whether states should employ a “carrot” or “stick approach to incentivizing shared services among local governments is a fair question. But it seems reasonable to suggest that state governments can play an important facilitative role in helping local governments explore and take advantage of opportunities for shared services. Studying potential cost savings and impact on service quality can be complex and expensive, for example. And sometimes political will to explore potentials for shared services may need a catalytic spark from elsewhere.

Current trends seem to indicate that shared services are not a fad and that there is a good likelihood that more states will be exploring how they might encourage more service sharing at the local level. Thus local government and other community leaders ought to be proactive and explore possibilities now if they are not doing so already. Organizations like Regional Councils may be helpful in facilitating these explorations. The Triangle J Council of Governments is facilitating such a process right now in fact, helping its members explore “service optimization” options.

All this leads to a last point, connecting shared services with the broader idea of community sustainability, or a new term that is used in the sustainability literature, community resilience. The term community resilience is often found in discussions of disaster preparedness, as in, resilient communities are those that bounce back quickly after a disaster. While we often think in terms of natural disasters, there are man-made disasters too and the Great Recession is certainly a man-made disaster that has had devastating impacts on communities large and small. Shared services, as a local government strategy to provide critical community services through partnerships with neighboring jurisdictions, ought to be framed as more than just a management tool to save money or “do more with less.” Rather, it ought to be thought of as a strategy to build community resilience and sustainability.