Alternative Service Delivery: Shared Services

Source: Government Finance Officers Association, Best Practice, Approved by GFOA’s Executive Board: October 2007

Background:
Governments continue to address funding issues related to their budgets often resulting in the reduction of programs and services. In addition, governments often face an increase in service responsibilities. At the same time, residents are demanding that governments demonstrate improved efficiencies and even offer new or improved services without new taxes.

To meet these challenges, governments are becoming more and more interdependent, including cooperating to deliver services. The services most often provided collaboratively include health and human services, transit systems, airports, sewage collection, disposal of hazardous wastes, libraries, tax assessing, and title records.

Informal (handshake agreements) may include such items as sharing information or equipment, coordination of individual efforts, or joint promotion. More complex or formal agreements might include contracting with another government for service, sharing facilities, purchasing/insurance pools, merged departments, special districts, or regional planning. Shared services that might be the most difficult to achieve include mergers, annexation, or service provision transfers, especially where political support is required. Formal intergovernmental cooperation often includes written agreements among governments and may require a division of labor and/or transfer of funds.

Suburbs may be more likely to enter into shared services agreements due to the greater density of governments in a metropolitan area, proximity, and similar levels of service. Rural communities might consider shared services due to their smaller size and lack of resources. Rural areas may have more cooperative agreements between different types of governments.

In all cases, alternative service delivery that involves shared services requires governments working together to achieve shared policy objectives. Governments are encouraged to cooperate to provide their residents services they could not provide on their own or to provide their residents lower cost and/or higher quality services…..