The search for cost-cutting measures to help balance budgets is an ever-present reality for almost every municipality and city government. In many, contributions from central government continue to lag behind levels from earlier this decade while employee compensation, along with healthcare costs, continue their inevitable upward climb.
To further exacerbate the problem (as if this isn’t enough), higher levels of disclosure about unfunded liabilities for pensions and retiree healthcare benefits place additional pressure on budgets. These issues only underline the hard truth that every municipality has only so much to spend.
Regionalization - the deliberate and co-operative effort among neighboring communities to pool resources to create service capabilities that can be shared among regional members - provides cities with a great opportunity to balance their budgets and stretch their investment dollars. Yet many city leaders ignore the opportunity to regionalize because of old-fashioned thinking about needing to “own,” rather than “share” the services provide to their constituents. This thinking needs to change in order to achieve all that The City of the Future has to offer. Here’s how:
Create a regionalization program
Not everything can be regionalized. Services like purchasing, emergency dispatch, IT support, financial management and schooling tend to be popular candidates. But regardless of the service under consideration, there are a few fundamentals that need to be considered in order to successfully implement a “regionalized” service.
These including, a can do attitude, the use of a proven planning process and the creation of a solid contractual instrument that keeps everybody honest. Let’s explore each of these fundamentals:
“Can do” attitude: Anyone can identify barriers and obstacles for creating a regional program. Good thought leaders will attack the regionalization programs with a “can do” attitude while creating a common vision and approach. Being positive and helping to eliminate barriers of entry is extremely important to the success of regionalization.
Proven planning process: Developing an overall strategy and planning process between and among multiple municipalities is essential. Working together as a team to identify and prioritize which regional efforts should be considered will help the process. Soliciting input and engaging in a planning process can help to ensure that the various regionalization options are well thought out and have a positive impact on all participating municipalities.
Contracts: Lastly, creating a common set of goals/objectives along with a formal contractural agreement (sometimes called a Memorandum of Understanding) will help to ensure that the regionalization process and program(s) are embedded into the municipality’s culture and will stand the test of time. All too often, changes in leadership can derail regionalization efforts. Creating a solid contract among regional members can mitigate this risk and help to institutionalize the overall program(s).
This agreement should confirm how the municipalities will work together, share cost savings, build business cases for regionalization, create a budget for achieving regional opportunities, and agree on processes and methods to evaluate the success of each regional initiative. Everyone needs to be part of the team and feel as if they are contributing while understanding key benefits.
In closing, by creating a partnership with neighboring cities and towns, both large and small, municipalities can achieve a wide variety of success through a combination of shared and centralized services and the improved purchasing power that often comes with it. Regionalization creates a better means for pooling resources and streamlining service delivery, which also leads to cost savings and more efficient processes.
In the end, the regionalization of services may seem overly complicated and evoke concerns about loss of local control and trust, the reality is we need to embrace regionalization in order for municipalities to evolve to one day be City of the Future.