The public sector is increasing its reliance on shared services

Author: Seth Garrison, Senior Manager (Email)

Regionalization, collaboration, and resource sharing between public agencies is an effective way to achieve good outcomes for constituents.

Most public agencies are accustomed to doing more with less. They are constantly scrutinizing their activities, keeping staffing lean, and looking for efficiencies while still addressing evolving demands for better and more affordable services. While this focus on continuous improvement has become the way to do business, public agencies must also look externally for opportunities. Neighboring public agencies are also doing more with less, and by sharing knowledge the result can be improved services. Opportunities range from joint contracting, resource sharing, and partnering on projects; to more comprehensive regionalization and consolidation.

Neighboring agencies have often been viewed as competitors, jockeying for desirable customers, competing for limited industry talent, and jealously comparing facilities and services. Instead, looking at neighbors as partners can pay dividends for both parties. Some municipalities have learned that working together to attract new businesses can benefit everyone. Effective partnerships in Charleston, South Carolina, for example, allowed the region to attract investments by Boeing and Volvo. Cooperation has been instrumental in allowing the water suppliers in the Dallas metro region to share water resources that serve their rapidly growing customer bases. Less grand efforts where communities share certain assets such as fire and public safety equipment or do joint training are staples in many regions across the country.

There many forms of collaboration that can be considered. Here are just a few of the common ones:

  • Joint Contracting: Working with another entity to achieve greater economies of scale and lower unit and administrative costs are obvious advantages to working together. In some cases, bigger projects can also draw more interest from contractors. Joint contracting for paving, building maintenance services, and fleet activities are common areas of focus.
  • Resource Sharing: Public agencies often need temporary or part-time resources, or an expensive piece of equipment for certain projects. Existing resources may also have extra capacity. Sharing these resources saves money and improves services.
  • Project Partnering: Perhaps multiple agencies will be working in the same street in back-to-back years. By partnering on a project there are opportunities to minimize disruption and get better pricing.
  • Regionalization and Consolidation: Sometimes working in a consolidated or regionalized manner makes the most sense for the people that rely on the agency for service. Agencies have opportunities to combine part or entire organizations to provide better and more cost-effective services.

With cooperation efforts come challenges, such as time availability, past relationships and trust, sustaining interest, political issues, span of control issues, and organizational barriers that prevent consensus building and effective communications. These need to be addressed for efforts to be successful.

Raftelis is helping many public agencies realize collaboration opportunities. We begin by helping communities understand that partnering is not a zero-sum game where there are winners and losers. There can be wins for everyone. This puts the traditional notions of jurisdictional competition aside. We then work with the parties to objectively assess current practices and opportunities. Ease of implementation, cost structures, legal requirements and other attributes are evaluated. Similar evaluations can be done in-house, and our work with organizations often starts that way.

Bringing a consultant firm like Raftelis in from the outside allows for a level of objectivity and analysis that is hard to duplicate. When we’re working toward the benefit all parties, there is no concern of bias. As fiduciaries, registered as Municipal Financial Advisors with the U.S. Securities and Exchange Commission and the Municipal Securities Rulemaking Board, Raftelis must always act in the best interest of its clients. Having an outside entity involved gives all the parties confidence that an unbiased set of recommendations will be produced.

Raftelis Knows Collaboration

Raftelis has fostered collaboration among many entities. Below are case studies of where Raftelis has helped bring parties together for the benefit of their customers:

  • Green Bay Water Utility/Central Brown County Water Authority
  • Suffolk County
  • Sacramento Region Water Utilities