Carl Sternberg, professor of public administration and government at the School of Government, University of North Carolina at Chapel Hill, reviewed 246 stories summarized in the International City County Manager Associations News Briefings from April 2009 to April 2011. Sternberg’s review provides an interesting look at how governments across the country are dealing with reduced funding and increasing costs.
246 case studies
96 governments took actions related to Personnel (benefit reductions, furloughs, layoffs, pay cuts, reduced work week, retirement incentives)
85 addressed Core Services & Programs (department/ agency elimination/streamlining, position elimination, program elimination, service reduction)
41 Undertook Service Partnerships (for-profit organizations, interagency, interlocal, non-profit organizations, volunteers)
24 have considered Restructuring (form of government change, consolidation/merger/disincorporation)
What the above indicates according to Sternberg is:
“The relatively easy decisions have been made as far as salary and travel freezes; across the board budget cuts; temporary furloughs and layoffs; vacant position eliminations; fee increases; reserve fund withdrawals; maintenance and vehicle replacement deferrals; and minor service reductions. The low hanging fruit has been picked”.
“…most responses could be labeled conventional and incremental, instead of part of a bolder, more innovative and comprehensive approach.”
“Only 24 stories reported on initiatives in 16 states to make local governments more efficient, economical, and effective through city-county or city-city consolidation, downsizing the government board or changing the form of government.”
“Cities and counties are just beginning to consider strategies for reinventing themselves. As budget cuts at the federal and state level continue to impact local governments many managers and elected officials will need to “think the unthinkable” as far as eliminating core services, expanding interjurisdictional partnerships and jurisdictional realignment.”
What can local officials do to cope with the next wave of economic crisis?
1) Boundary Spanning – Expansion of services delivered in whole or in part through interlocal contracts and joint service agreements. Outsourcing appropriate services to non-profit organizations and private firms.
2) Consolidation/Merger – Especially fiscally hard hit communities could consider moving beyond service-sharing arrangements to functional transfer or consolidation. Local officials could maintain service levels and contain or reduce costs by both “thinking regionally and acting regionally.”
3) Partnering With States – Relationships between local and state governments could become more critical to successfully coping with economic crisis. State and local officials need to identify partnership opportunities.
What do you think about Sternberg’s point that local governments need a bolder and more innovative approach to addressing their fiscal crisis?
Great post – Do you have any sense of what percent are about new services a city is offering or a new way of doing an existing service? Like the cities that are using ParkMobile (and other companies) that allow folks to pay parking meters with their cell phones. Or using CitySourced/SeeClickFix as a new 311 approach.
Cause I think that’s a key part of the equation – both adding new services & adding new technology to redo how a problem is currently being done
Consolidation/Merger, while painful in the short term, probably offers the best path forward. I’ve seen estimates of over 30,000 local government jurisdictions in the U.S. including townships, municipalities, independent school boards etc. The public would probably be better served if these were consolidated into the 4000 or so counties and duplication eleiminated. The cost savings from elimination of redundancies would be significant and the county governments would gain purchasing power by larger concentration of contracting. Essentially, any jurisdiction with a population below 250,000 should probably be thinking of merging.
Curious – Is most consolidation 2 cities combining, a city combining with a county, two counties?
The process and costs of “consolidation/merger” are extensive – both costs and time diverted from providing public service. I’m not suggesting it doesn’t need to be considered through optimal delivery of services; however, there are options to be considered in the shorter term. Firstly, the ability to collaborate informally/formally to achieve a better purchasing position is readily available – just make the rounds with your peers to uncover the opportunities. The comments Steve made about leveraging technology, particularly SaaS, is something that can accomplished in the short term.
Having dealt with the various levels of public sector over 30 years, my sense is that NOW is the time to do an honest Core and departmental service review. We’re living in a new economic reality and there needs to be a validation of the need/value of public services (and level of service) that are currently being offered as well as the policies that are associated with the delivery of the services. Government has evolved over time and some of what is currently done may be based on history rather than current societal needs. This is the perfect time to validate what’s being delivered as public service and really be transformative to benefit the key stakeholders – the citizens and businesses. Open Government – Open Data et al provide a framework to be transformative – here’s some further thoughts on such a framework http://www.slideshare.net/JuryKonga/municipal-open-government-framework-beta-version
There are many options dealing with this and I’d love to see a lot of dialogue and options posted by the GovLoop community!
Some information to contribute to the conversation, including examples:
– Consolidated city-county: http://en.wikipedia.org/wiki/Consolidated_city%E2%80%93county, interesting note from this entry: “105 referendums were held in the United States between 1902 and 2010 to consider proposals to consolidate cities and counties. Only 27 of these proposals were approved by voters.” My question = why are citizens voting against so often? Who’s spurring the opposition? Also, I like the term “unified government” used by Wyandotte / KC.
– Solid briefing on the subject: http://www.gongol.com/research/economics/citycountymergers/ – 10 reasons to make the case
– Comparative analysis: http://www.gongol.com/research/economics/citycountymergers/ – done by the PA Economy League, well done.
Great information Andrew. I misplaced the name of the gentleman who did the study, which I need to correct. His name is Carl Stenberg. Here is a link to his study:
http://icma.org/en/icma/knowledge_network/documents/kn/Document/303228/Coping_with_Crisis
@Peter Sperry – According to the US Census Bureau, in 2007 there were just over 3000 counties and almost 30,000 cities in the US. When you add up all the local government entities (districts) etc., there are over 89,000 in the US.
Does this make sense? Absolutely not. Do we need a bolder and more innovative approach? Absolutely.
I’ve been working on this for over 2 years now…and have some ideas on how it can be done.
@ Andrew __ Does Brian Gongol have any empiracal research to back up that analysis? Because in my experience he has several items 180 degrees reversed. In particular:
“Increased Corruption The larger the governmental unit, the greater the prospects for significant corruption. Larger political units have larger contracts to offer, thus inviting a much greater prospect of bona fide corruption. Smaller communities are by no means exempt from corruption, but it’s much more rational to undertake criminal activity like collusion, bribes, and kickbacks when the payoffs are greater than when they involve much smaller rewards — particularly when the criminal penalties are uniform across communities of different sizes. “
From what I have seen, larger jurisdictions tend to have much more robust internal control regimes. Often including independent watch dog organizations and Inspector Generals within major departments. They also attract more external scrutiney from NGOs. Smaller jurisdictions not uncommonly operate on “coffee can accoutning” with little or no oversight. For all of the problems of contracting at the state and federal levels, the instances of actual corruption tend to be few and far between. Compare that to local jurisdictions where the first step in applying for a building code varience is a healthy contribution to the right members of the township board of supervisors.
As most governments and agencies I know try to keep their exposure to risk low, which I generally appreciate, it comes as no surprise to me they won’t consider bold moves as appropriate to solve the issues in front of them. Therefore I am happy that Professor Sternberg, as a researcher who does not feel the budget squeeze the same way as a mayor, council or governor, can allow himself to step back and point out those helpful approaches.
Approaching and embracing those strategies will likely have to come with dedicated cost-benefit analyses. I suppose some kind of involvement of the constituency may be required, too?
Anyway, as Jury and Steve pointed out, technology can help and support the bold moves as well as incremental steps to cut cost. Here too, the best results are being achieved with a clear strategy, wrapped around measurable targets. SaaS, open source come to mind for software, both said that, but sometimes the systems that are already there deserve a good second look: Often, these systems have been implemented with regulatory compliance in mind, but efficiency and automation were not considered as much. Now is the time to give streamlining business processes and automating process steps some thought. When workload needs to be shouldered by fewer staff, some of the burden may be offloaded to software. In many cases, no new code is needed: Modern government software packages include some business process managing tools which enable business experts to just model and streamline processes with graphical elements. You’ll find some examples in this eBook: Click here to access the eBook (20 minutes).
Citizen self-services may offload some of the burdens, Steve mentioned 311 as a good candidate. Supplier self-services and employee self-services may contribute to alleviate the workload of remaining staff, too. In this context, mobile services deserve some attention: Nowadays, virtually everyone carries one or more mobile devices all the time. Expanding self-services to these devices not only allows for timely processing of tasks, but also for automating many follow-on activities in the backend. Mobilized self-services help accelerating processes and reduce manual efforts for city staff. Self-services and mobility pay off quickly. I recommend benchmarking throughout: Get proof measures taken help as desired.
My experience has been that local governments tend to run lean – we have to because we are using taxpayers dollars and need to find how to get the most of each dollar. We have taken advantage of technology and will continue to do this and other actions to reduce costs – contrary to what the press states, that’s the way we operate in local government.
So while restructuring could be done or other ideas presented here, the bottom line is it costs so much to deliver each type of service. Eventually you get to a point where it’s difficult to find ways to trim anymore without reducing services.
Based on what I have seen over the years, I believe the issues below have a much greater potential to drain money away from local government so addressing these issues is a good place to start the money-saving conversation:
For each example I gave above there are people who will argue the action and costs are justified. And perhaps if there is no money crunch, they are. But if we are at the point of trying to scrape out every penny by consolidating departments so we can get rid of one pickup, then we need to really ask ourselves if we should be handing out money for the purposes listed above. Because all the consolidation, partnering, and out-sourcing
Referencing the point about municipalities keeping their risk exposure low, I wouldn’t expect mass movement toward government consolidation without more – and more demonstrative – real-world success stories. A lot of times while conventional wisdom says consoldiation saves, details of actual proposals don’t pencil out that way. This happened in my area when school district consolidation was considered.
Referencing Andrew’s question about low voter approval: Obviously each case is different but our examination here tells me that when presented a choice voters ultimately preferred the service they were getting more than the unknown.
Locals constantly face balancing a demand for service with constant cries for expenditure reductions — all lumped and wrapped inside regulations and requirements heaped on us from state and federal legislatures and courts – often written or decided in reaction to issues going on in cities far away from us that don’t pertain to us or for which we had already worked out a local solution. To paraphrase Robert Frost, we must move “freely, in harness.” While the idea of consolidation sounds like an opportunity to wipe the slate clean, state and federal laws remain, and any change still needs to take into account the compromises, precedents and agreements already made with community stakeholders if the relationship between the government and the community it serves is to stay strong.