Intergovernmental service sharing: insights from THE WISCONSIN POLICY
FORUM
February 7, 2019Rob Henken, President
Effective January 1, 2018, the Public Policy Forum and Wisconsin Taxpayers Alliance merged to create the Wisconsin Policy Forum, a statewide policy research organization.
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We maintain our mission of providing informed, nonpartisan analysis of critical policy issues affecting local governments, school districts, and the state of Wisconsin.
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We now have increased staff capacity, broader research capabilities, and an enhanced platform to better engage and inform policymakers and citizens.
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We are a membership organization, with contributions from nearly 1,000 businesses, local governments, institutions, nonprofits, and individuals allowing us to make our research available to all and serve as a true “forum.”
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Corporate39%
Government24%
Nonprofit18%
Education12%
Individual7%
Corporate Northwestern MutualWe EnergiesBMO Harris BankFoley & LardnerBaker TillyRockwell AutomationJohnson Controls
GovernmentMilwaukee CountyEau Claire CountyCity of MilwaukeeCity of BarabooVillage of ShorewoodVillage of Little ChuteNorth Shore Fire Dept
EducationMilwaukee Public SchoolsUW-La CrosseUW-MilwaukeeGreendale School DistrictKewaunee School DistrictConcordia UniversityMarquette University
NonprofitBader PhilanthropiesLeague of WI MunicipalitiesIndependenceFirstMilwaukee Art MuseumWisconsin Hospital Assoc. Hunger Task ForceAurora Health Care
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Shared Serv ices & Consol idat ion Research
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The real promise lies not in saving money, but in the potential for individual governments to join forces to achieve levels of service quality and efficiency they could not achieve alone.
National research cautions that pursuit of service sharing only may make sense under the right conditions. For example:• Retirement of a key leader or leaders• A new requirement or need that requires substantial
investments in technology or staff• Evidence of clear duplication among local govts in a region• A previous history of cooperation among two or more govts• A mutual desire to cooperate on broader economic
development or related issues
When to Pursue Service Sharing
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River Hills
Brown Deer
Bayside
Fox Point
Glendale
Whitefish Bay
Shorewood
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0
34
80
Admin Command Firefighter/EMT
1994114 FTE
Fire Department Personnel
10
0
34
80
Admin Command Firefighter/EMT
1994114 FTE
Fire Department Personnel
6
31
70
Admin Command Firefighter/EMT
2015107 FTE
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199431 Vehicles
16
7
3 3
Pumper Ambulance Ladder Tanker
Fire Department Apparatus
12
199431 Vehicles
5 6
3 2
Pumper Ambulance Ladder Tanker
16
7
3 3
Pumper Ambulance Ladder Tanker
201516 Vehicles
Fire Department Apparatus
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Trained paramedics increased from 12 to 33
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Travel times roughly equivalent despite reduction of two stations
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ISO ratings for areas w/hydrants reduced from 4’s and 5’s to 2
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Unified training, protocols, communications
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Arguably, a far better level of service using far fewer resources
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$7,747,634
$12,693,037
$14,384,772
$11,620,643
1993 Budgets 1993 BudgetsInflation Adjusted
1993 BudgetsInflation & Service
Adjusted
NSFD 2014Charges
Fire Department Expenditures
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$14,279
$106,867
$258,483
$294,720
$410,110
$624,717
$1,054,953
River Hills
Glendale
Bayside
Fox Point
Whitefish Bay
Brown Deer
Shorewood
Fire Service Savings
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13
2
9
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1
53
Pumper Tanker Ambulance LadderNon-Consolidation Actual NSFD
No Consolidation 27 Vehicles ~ $8,366,017
Actual NSFD14 Vehicles ~ $5,020,497
Vehicle Replacements
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Several retiring chiefs or chiefs not interested in heading up new department
Elected officials who were committed to cooperation
Mutual threat from City of Milwaukee’s decision to charge more for mutual aid and public perception of insufficient service capacity
Mutual recognition that in this case, bigger meant better
Why was nsfd successful?
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Taking into account a hypothetical overhead charge from the County, Wauwatosa would save about $150,000 annually. The County would gain $143,000 annually to defray Communication Center overhead.
Annual Charges to Wauwatosa Under Hypothetical Wauwatosa-OEM PSAP Contract
Year 1 Subsequent Years
Direct costs $539,735 $539,765
Overhead $143,000 $143,000
Start-Up $68,000 $0
Total $750,735 $682,735
Current Wauwatosa PSAP Cost $832,612 $832,612
Total Wauwatosa Savings $81,877 $149,877
PSAP Consolidation Case Study
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Consider the Following Trends
• PSAP consolidation is a national trend and some states are imposing mandatory consolidation timelines.
• Wisconsin has not opted for mandatory consolidation, but ongoing capital expenditures and rising personnel costs are a reason to consider alternatives.
What are Potential Benefits
• Improved dispatch processing times by eliminating emergency call transfers.
• Opportunity for cost efficiencies in purchasing, technology maintenance and PSAP staffing.
• Centralized staff hiring and operations can contribute to higher retention rates and staff effectiveness through new career ladders and opportunities.
PSAP Consolidation Case Study
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Oak CreekSouth
MilwaukeeArea (sq. miles) 28.45 4.80
Total population 34,974 21,229
Population change, 2011-2015 +1,331 +92
% of residents 65 or older 15.1% 11.1%
% of residents under 18 23.5% 21.9%% of residents 20 to 34 19.8% 21.9%
Median household income $65,319 $51,173
Geographic & Demographic Info
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Oak CreekSouth
MilwaukeeMedian housing value, owner occupied $208,800 $155,900
Municipal equalized value $3,003,919,300 $1,147,266,000
Per capita equalized value $85,890 $54,042
Commercial equalized value $904,679,100 $201,223,900
Commercial equalized value as % of total 30.1% 17.5%
Total property tax levy $71,099,324 $32,054,511
Gross tax rate $24.08 $28.12
Property Values & Taxes
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Oak CreekSalary
ExpendituresSouth
MilwaukeeSalary
ExpendituresPublic Health Officer 1 $84,999 1 $92,195 Deputy Public Health Officer 1 $70,556 0 --Senior Public Health Nurse 0 -- 1 $67,854 Public Health Nurse 1.95 $115,950 1.6 $106,795 Public Health Specialist 1 $63,126 0 --Sanitarian 1.4 $89,482 0.2 $7,163 Environ. Health Specialist 0 -- 1 $79,779 Clerk 1.35 $39,067 1.6 $69,723 Total 7.7 $463,180 6.4 $423,509
Health Department Staffing
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Hypothetical Org Chart
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Current Consolidated Cost/(Savings)Public Health Expenditures $989,548 $1,002,888 $13,340Public Health Revenues $159,937 $169,037 ($9,100)Public Health Tax Levy $829,611 $833,851 $4,740
Environmental Health Expenditures $291,625 $302,446 $10,821Environmental Health Revenues $211,814 $231,245 ($19,431)Environmental Health Levy $79,811 $71,201 ($8,610)
Total Cost/(Savings) ($3,870)
Fiscal Impact of Consolidation
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Greater nursing and environmental health staff capacity without an increase in cost.
Ability to develop a nurse staffing model that emphasizes specialization in priority program areas.
Opportunity to derive mutual benefit from expertise and skill sets possessed currently only by one community.
Potential to offer higher salaries in high-demand positions and provide greater career ladder opportunities.
Enhanced programmatic capacity due to economies of scale.
If no savings, then why consolidate?
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Dollar savings are what mattered most – both in terms of what Oak Creek needed and backbone to stand up to critics.
Potential to expand public health service capacity not a high priority given other priorities and shift in mayors.
Recruitment and retention challenges of little interest to elected leaders.
Little faith that merged department would prioritize Oak Creek’s environmental health challenges.
Overall, from elected officials’ perspective, no compelling reason to do it.
Why oak creek rejected the plan
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Be clear about objectives – if dollar savings are the only driver, then maybe don’t bother.
Make sure elected officials and administrative leaders understand public health programming and appreciate its importance.
Engage board of health, health officer, medical director, and/or other stakeholders who appreciate public health programming.
Be just as clear about the consequences of not merging as you are about the benefits of merging.
Lessons learned
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Purpose of this research
Provide a high-level scan of municipal services to convey which service areas hold greatest potential for comprehensive sharing and/or consolidation
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Six criteria
1. Is demand for new technology/equipment or new state/federal regulations causing costs to become unaffordable?
2. Are key staff scheduled for retirement or are there other organizational developments suggesting an opportunity for new service models?
3. Are there areas of clear cost inefficiency or redundancies among neighboring municipalities that suggest potential for cost savings through shared services?
4. Could service sharing improve the level, type, or mix of services?
5. Is one municipality providing a service that is benefiting the larger region?
6. Are capital replacement needs intensive?
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Background
77,571
26,360 24,910
6,937
RACINE MOUNT PLEASANT CALEDONIA STURTEVANT
Population
$81.6
$21.1 $18.6
$4.9RACINE MOUNT PLEASANT CALEDONIA STURTEVANT
Gen Fund Budget(In Millions)
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Fire & EMS Services
$16.7
$7.9
$4.7
RACINE SOUTH SHORE CALEDONIA
2018 Budgeted Expenditures(In Millions)
$215 $234
$175
RACINE SOUTH SHORE CALEDONIA
Cost per Capita
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FiRe & EMS Services
141
60
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RACINE SOUTH SHORE CALEDONIA
2018 FTE
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FiRe & EMS Services
FACTOR RATING
High cost of new technology
Pending retirements/organizational changes
Cost inefficiency/redundancies
Potential for service enhancements
Single municipality providing service beneficial to the larger region
High capital replacement costs
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Conclusion
FACTORPUBLIC HEALTH
PARKS & REC
FIRE & EMS
High cost of new technology
Pending retirements/organizational changes
Cost inefficiency/redundancies
Potential for service enhancements
Single municipality providing service beneficial to the larger region
High capital replacement costs
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Conclusion
For these three service areas, service sharing or consolidation has potential to reduce inefficiency/service redundancies & enhance services.
There is already some form of consolidation for each of the three, with merged entities providing services that benefit some portion of the larger region.
Fire/EMS and parks/recreation face significant capital and/or technology costs that potentially could be more easily borne by multiple communities.
The three functions all involve core services that are relatively consistent across municipalities and do not logically end at municipal borders.
Each requires staff with special levels of training and knowledge that often are in short supply for local governments in a tight labor market.
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Conclusion
This is only a first step. Far more time intensive, expensive, and politically difficult steps include:
• Advanced data collection and analysis of cost centers and service standards
• Research on state law and potential impacts on state funding streams
• Consideration of human resource policies and labor contracts
• Development of cost sharing methodologies and governance structures
The daunting nature of those steps should not preclude further consideration of these opportunities; instead, this report should be seen as an encouraging sign and an impetus for further action.
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