Considering Shared Services? Some Things to Think About

Water towersFor over a decade, communities have considered and implemented shared municipal services. Those who have benefited from this arrangement shared common goals and philosophies of running their cities, took a lot of time to lay the groundwork developing contracts and have leadership in place to manage the relationship in the long run. In other words, while it can be done, it’s not expeditious, it can be tedious and all accountability rests in two communities being compatible. And, it’s been our experience that the government entity that doesn’t employ the personnel is often times the second, third or fourth priority when it comes to emergencies and prioritization of work.

According to the Massachusetts Municipal Association, while there can be benefits to municipal sharing, “the sharing economy presents an expanding and unique set of risks and issues for municipal leaders to consider. Most important, the shared services, materials and facilities may not be adequately covered by their current municipal property and casualty insurance agreements. As a result, they are subject to claims and legal action.”

The Association goes on to recommend that municipalities determine if their insurance policies cover shared equipment, motor vehicles and employees, and potential claims arising from them. They should also ensure that there is a specific scope of services, and that the responsibilities of each entity are clearly stated in a written agreement.

It is important to consider the following issues:

  • Which municipality or entity is responsible for the maintenance and repair of the equipment, in the event that a failure to maintain it leads to injury or damage to property?
  • Which municipality or entity is responsible for damage caused by the equipment or operator of equipment in the event that there is a claim for negligent operation of equipment leading to damage or injury to a third party?
  • Which municipality or entity employs the employee(s), and which entity is responsible for supervising the employees? Which entity is responsible for the training and supervision of shared employees in the event that a claim is brought against the shared employee (including negligence claims or claims for violation of civil rights)?Likewise, which municipality or entity’s policies govern the shared employee in the event that a workplace dispute arises or there is a claim for discrimination or harassment?
  • Is there an indemnification provision, also known as a “hold

In the IBM Center for The Business of Government’s paper called A County Manager’s Guide to Shared Services in Local Government, shared service delivery requires participating governments to reach a careful consensus on how service will be delivered and, on the standards, or performance expectations for service delivery.

County officials who have crafted these arrangements report time-intensive negotiations to reach agreement. When working together, people also like to know that everyone is fairly benefiting from collective efforts. It takes sustained executive leadership and an attention to change management to convert to a shared services approach. This may require county governments to give up control of a service to other governments. If another unit of government is leading a shared service initiative, the county government may need to subrogate its role, checking ego and a desire for control for the good of the whole to succeed.

Counties starting down the path of shared service delivery should prepare for a long and often challenging journey. Opportunities for sharing, merging, or contracting services may be obvious. Even when opportunities are obvious, county officials should prepare for careful deliberation to make sure all participating parties are happy with the proposed working relationship.

Of course, you will do your own research on shared services if this is something you’re considering, but it’s clear that this path is intense and time-consuming and takes a ton of collaboration, trust, and alignment with a partner community.

On the other hand, partnering with PeopleService is expeditious, 100% in your control and gets a team of water/wastewater experts on deck expeditiously – usually what communities facing a fast retirement need. And, when you contract for services with PeopleService you are always the priority, emergency or not.

If this option sounds optimal for your community, contact Chris McMillen today.