Jeffrey I. Ziplow, MBA, CISA, CGEIT
Partner

As local governments continue to face tight spending restrictions, having to make hard choices on which services to maintain or eliminate, there is an option that many municipalities should consider that could (in the long term) lead to significant cost saving—shared services.

The idea of municipalities sharing services with each other—collaborating across municipal boundaries to offer services in a more streamlined and affordable way—is not new. But it is one that needs to be evaluated in the immediate future, as applicable, because in an era of dwindling state revenues trickling down to municipalities, we need to create a “new normal” for how local government can effectively function.

There are plenty of examples of this already being done successfully throughout Connecticut. Some neighboring towns share landfill services. Numerous regional school districts exist in areas where towns do not have a large enough student population to support their own. And within some communities, actions have long been underway to consolidate the local finance departments between a municipality and the respective school district, as well as to combine information-technology services into one department in a similar way. So it is certainly possible; even with barriers that plague this thought process.

One of the biggest obstacles is mindset. But the process of looking into sharing services, of reaching beyond the municipal borders, of looking to develop a team within and between other municipalities does not have to be a daunting one. If done the right way, it can be beneficial to all involved.

The familiar concerns of shared services are loss of local control and/or lower standard of service. Throwing together two groups of people without a game plan for success only leads to a chaotic, unstructured mess.  Two groups competing against one another with no real goals or objectives in mind.  Add to it a lack of leadership and this approach will never work. But in reality, the opposite can be true if approached strategically and methodically.

Now let’s create success and the new normal; the establishment of a structured environment within and/or between municipalities, one which creates common standard operating procedures that can lead to realistic, measurable success. Defined metrics and expectations of services levels can be put in place. Now add appropriate technologies that allow the combined operations to function more quickly and reliably, and measurable improvements can be made.

It won’t just be a case of merging financial operations between the municipality and school district or two municipalities consolidating specific departments. Rather it will be a well thought-out process and organizational structure that has a defined shared service agreement, where goals have been established and everyone has a clear picture of what success will look like before anything begins.

And if the results are legitimate cost savings and a satisfied taxpayer base, suddenly the idea of collaboration across the borders looks less like a challenge and more like an opportunity.

Make no mistake, this cannot be done just for the sake of “shaking things up.” There has to be a measurable bottom line that involves more government efficiency, more reliable service and fewer public dollars spent on it. When this happens and levels of success are achieved, momentum can be built throughout the state for more teams to be built across borders than can make collaborative efforts that are equally rewarding. Teams are incredibly valuable given the combined institutional knowledge and leadership, particularly when working towards a common goal.

And how do we address the issue of parochialism, of “home rule” overtaking genuine opportunity for cost savings and program efficiency? One step at time. Municipalities interested in exploring shared services can start by building teams of people who want to engage in successful collaboration. The next step is to create a program template to show how it can work, and how success needs to be clearly defined. It’s a deliberative process, without question, and it is imperative for municipalities to start small while thinking big.

Reaching beyond municipal boundaries needs to be viewed with new eyes, with a new mindset and of course strong leadership. If done correctly, it is not about a municipality losing autonomy, but rather gaining the ability to build a team that allows both organizations to run better, more efficiently and to better serve its respective residents.

Jeffrey I. Ziplow, MBA, CISA, CGEIT, is a partner with BlumShapiro, the largest regional business advisory firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. The firm, with a team of over 550, offers a diversity of services, which include auditing, accounting, tax and business advisory services. Blum serves a wide range of privately held companies, government and non-profit organizations and provides non-audit services for publicly traded companies. To learn more visit us at blumshapiro.com.

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