Benefits and Considerations of Shared Services in Local Government
10/16/2023 5:00:00 PM
Local Governments in New Jersey have a history of adopting a “Home Rule” governance. The Home Rule Act, enacted in the NJ Constitution in 1917, grants municipal governments broad authorities to adopt ordinance and regulations providing for public welfare, public safety, and land use laws. This act is a major source of authorization for local autonomy in the State of New Jersey.
While home rule has the benefits of establishing local control/oversight for local government services, it is expensive. Bergen County, with a population 966,000, has 70 municipalities and over 74 local and regional school districts within its 276 square miles; many argue this creates redundancy of services and results in high real estate taxes. In comparison, Fairfax County in Virginia has 1.1 million in population, 407 square miles has only 20 towns within its borders. According the The Tax Foundation’s Analysis of Census Bureau’s data, New Jersey's average effective property tax rate compared to home value is 2.23%, the highest in all 50 states and the District of Columbia. Virginia in the same study was ranked 29th out of 50 states.
What are the benefits of Shared Services?
The high tax burden has put pressure on local officials, administrators and CFOs to find solutions. One answer can be entering into Shared Services with a neighboring municipality or county. Examples of successful Shared Services include:
- County 911/Dispatch Services
- Joint/Shared Municipal Courts
- Shared DPW Services & Equipment
- Shared Municipal Officers (CFO’s, Tax Assessors and Collectors)
- County to County Shared Jails and Juvenile Detention Centers
- County Health Officer and Animal Control Services
One important resource available to municipalities and counties is the Local Efficiency Achievement Program (LEAP), administered through the Division of Local Government Services (DLGS). Since 2021, the State awarded $13.6 million to help municipalities and counties initiate and implement shared services to reduce costs and improve services. The grant awards will assist in the design and implementation of shared services initiatives. Local governments have been awarded grants ranging from $100,000 to $250,000 for implementation of joint dispatch services for public safety, sanitation & public works equipment, county jail consolidation, and transportation and school feasibility studies. See the Department of Community Affairs website on Shared Services for a more complete list.
So what are the essential elements to engage in successful Shared Services Agreement?
1. Elected Officials must be the driving force of the shared service.
2. A retirement or vacancy in a director or department head position such as the retiring police chief makes sharing or jointly providing a service much easier to pursue.
3. Both sides of the joint services need to understand the financial, capital requirements and employee reasons for and impacts of the shared services.
4. A feasibility study is recommended prior to pursuing a shared services. The study will provide the governing body, CFO and Administrator with insights into the operation and identify financial, capital and personnel resources required for the agreement.
5. Involve the employees who may be affected by the shared services. They may have recommendations for the venture.
6. Do not recreate the wheel by choosing services that do not lend themselves for shared services.
7. Both parties in the sharing venture must win or gain something - either a lower cost for the same service or an improved service.
8. Finally, public input should be considered at the initiation of the study process and this can be accomplished by having a public hearing or appointment of citizen members on study team.
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Joseph Luppino
Joesph Luppino has been Vice President / Government Banking Officer at Kearny Bank since 2022. In this role, Joe drives business development with municipal and county governments. His specific emphasis is on management of operating funds, along with investment needs.
Joe joined Kearny Bank after nearly three decades with Bergen County, most recently as Chief Financial Officer. While there, he managed Bergen County’s Aaa bond rating, $750 million operating budget, and $967 million capital and debt plan. During the county’s COVID-19 response, Joe oversaw the $60 million COVID-19 Small Business Grant Program, which provided grants of up to $20,000 to more than 4,000 small businesses in Bergen County. In addition, he coordinated implementation of new finance, budgeting, and purchasing systems.
An instructor in the Rutgers University Certified Municipal and County Finance Officer Program, Joe trains and mentors program candidates. He holds a bachelor’s degree in Accounting from Pace University. Luppino is a Certified Public Accountant, Certified County Finance Officer, Certified Municipal Finance Officer, and Certified Public Manager. He serves on the Fort Lee Board of Adjustment and is a former president of the Englewood Cliffs Board of Education.
Contact Joe:
(973) 826-7856 x77856
[email protected]