What is Service Sharing?
Intergovernmental service sharing occurs when two or more local government entities cooperate to provide a single service or set of services to residents. Sometimes, one local government entity will provide a service to another for sale through a contract, on a fee-for-service basis or for free. Other times, two or more entities will work together to provide a service jointly. Service sharing agreements can range from formal written contracts or detailed memoranda of understanding to informal understandings of cooperation based on a simple handshake. Local government entities can also partner with the corporate and nonprofit sectors to increase efficiency through public-private partnerships.1Printable PDF Share on Twitter
The current financial environment compels county governments to be innovative and do more with less. Counties are caught between state policies that restrict or diminish their ability to raise revenue and ones that increase the number and scope of services they must provide. Nearly three-quarters (73 percent) of states have increased the number or scope of mandated services to counties, decreased state funding for counties or implemented a combination of both over the past decade.2 Moreover, 45 states place some limitation on the ability of counties to raise property tax revenue — the main general revenue source for most counties.3 (See Figure 1). When the Great Recession hit in 2008, counties found themselves under new pressure to increase efficiency, for nearly half of counties (46 percent) in 2013 had not yet seen their general revenues recover to 2007 levels.4
In the face of these financial challenges, many counties work with their citizens and other governments to raise funds locally, and they collaborate with other entities to gain efficiencies through service sharing. Service sharing agreements are an invaluable method for counties to increase efficiency. Rather than cut services when faced with budgetary strain, county governments partner with cities, other counties, special taxing districts, school districts, private corporations, nonprofits or other entities to share the burden of service provision. Different departments within a single county can also engage in service sharing.
By examining three examples of service sharing that occurred in the wake of the latest economic downturn, this brief shows different ways in which counties, in an environment of fiscal constraints, can continue providing their residents with quality services by cooperating with other entities. This brief is the result of various interviews conducted with county officials and staff from Marion County (Ohio), Rankin County (Miss.) and Erie County (N.Y.).
Despite fiscal constraints, counties can continue providing their residents w/ quality services by cooperating w/ other entities.
Five Characteristics of a Successful Service Sharing Initiative
- Create a team of county and local government leaders to guide the service sharing initiative and manage communication between parties.
- Trust that your local government partner(s) desire the same end goals as you and clearly communicate them. Evaluate and use each other’s strengths.
- Be flexible and willing to alter and improve the agreement over time. Test different ideas along the way with pilot projects.
- Develop methods to measure whether the shared service is fulfilling its goals. Establish easily-achievable short-term goals along the way to improve morale.
- Clearly document the responsibilities of all parties involved and make sure these responsibilities are understood. Provide an easy way to opt out of the shared service, recognizing that local government needs change over time.