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

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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

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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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