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How Shared Services are Saving Local Government Budgets

Capitalizing on Collaboration

By Todd Sander, Director of the Digital Communities program, with the assistance of the Digital Infrastructure Task Force

Capitalizing on Collaboration: How Shared Services are Saving Local Government Budgets

Introduction
Economists have declared the Great Recession dead, that, in fact, it ended in the summer of 2009. Newspaper columnists and bloggers sprang on the story with headlines teeming with sarcasm and ridiculed the announcement by the private nonprofit National Bureau of Economic Research. The incredulous “The Recession Is Over. Yeah, Right” ran in a Washington Post blog. The San Bernardino Sun was skeptical: “Recession over! Are you ready for some euphoria?” Others were snarkier: “Thank Goodness the Government Cured the Recession.” Whatever the headline, the message was clear: American citizens are not feeling more confident about the nation’s economic plight. It is easy to see why; the scene remains bleak across the country and the national unemployment rate is still hovering near 10 percent. It is a tough time to be in the public service business. Many communities are facing the same harsh realities as their constituents — and may continue to struggle with strained budgets for years to come. A survey jointly conducted in mid-2010 by the National League of Cities, the United States Conference of Mayors and the National Association of Counties found that, from 2010 through 2012, local governments are expected to lose nearly 500,000 jobs. Specific examples show cities like Central Falls, R.I., which has a deficit that’s 42 percent of its budget and the city of Denver that is looking for creative ways to tackle a $100 million deficit. There is a silver lining, though it may be hard to see. The Center for Digital Government’s paper, “Life After … Regaining Your Balance, Surviving the Reset and (Re)Building a Government that Works,” noted that in moving forward from the recession the public’s work is likely to be done differently. The “differently” alluded to in the paper refers to a more collaborative type of government where jurisdictions find strength in numbers and a more efficient way of governing through shared services approaches. Bryan Sivak, chief techLocaL Government Shared ServiceS

“What we need is a way to share what we have with other cities, and for them to be able to share what they build with us.”
– Bryan Sivak, Chief Technology Officer, Washington, D.C.

nology officer of Washington, D.C., believes cities don’t just need another cool software project. “What we need is a way to share what we have with other cities, and for them to be able to share what they build with us.” Big changes have to start somewhere and greater, policy-neutral, technical collaboration seems like a good place to start.

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Shared Services or Bust
“You can go after the ‘Cadillac solution’ together.”
– Ken Price, Information Services Director, Littleton, Colo.
“This collaborative theme is the theme I’ll highlight for Life After…,” said National Chief Technology Officer Aneesh Chopra. “In almost every major domain, we’re going to find ourselves with a much more dramatic productivity imperative than we face today because the long-term demand curve for public services likely will exceed our long-term revenue curve, at least as it’s currently seen through the federal, state and local ecosystem.” Chopra seems to be on to something. Difficulty can often spawn creativity and in this case it seems extreme difficulty has helped jump-start collaborative creativity in the form of local agencies and jurisdictions battling buckling budgets by sharing applications and services in a “build it once and everybody use it often” approach. (See Civic Commons sidebar for more information.) Local government leaders are realizing that, not only do other cities and counties share the same challenges in providing increasing amounts of services to constituents during tough economic times, but they are providing the same services and require the same applications and software to get the job done. Agency leaders within cities and counties are finding themselves

The Civic Commons
The newly formed Civic Commons group is an organization that aims to empower governments to share technology for the public good. Civic Commons is the brainchild of the nonprofits Code for America, a Teach for America-inspired program for the technology-minded, and OpenPlans, a group focused on civic engagement and open source government software. The organizations teamed up with Washington, D.C., Chief Technology Officer Bryan Sivak to create Civic Commons — essentially a repository of open civic code for governments to access. “We consistently heard exactly the same thing — we’re all working on the same projects,” Sivak said. So they decided to create a place where these shared projects can be viewed and discussed — the Commons. A main section of the Commons is the “civic stack,” a shared body of software and protocols for civic entities, built on open standards. Currently included in the stack are iPhone applications like Citizen Reports, an app for reporting and requesting service calls regarding city infrastructure, contributed by Portland, Ore. Also there is an App Store from Washington, D.C., where people can download or submit applications that use government data — things like parking meter locations, emergency information and historic data. The group has U.S. Chief Information Officer Vivek Kundra on board; he has approved providing the Federal IT Dashboard to the stack. Jennifer Pahlka, executive director of Code for America, described Civic Commons as a way to help governments share software they have developed, and thereby reduce IT costs, foster collaboration and spur innovation.
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in the same situation — other agencies share their plight of reduced budgets and staff with larger responsibilities and increased workloads. There is really no local government department that is unable to benefit from a shared environment. Ken Price, information services director for the city of Littleton, Colo., points to public safety, roads and bridges, parks, libraries and museums, among others, that can have technological components — often costly — that are ripe for sharing. For example, most police departments utilize computeraided dispatch programs and a records management system. “Every city that has a law enforcement agency will have to have the same technology infrastructure in place,” Price said. “Some cities can afford to have their own systems, but some can’t. But if they can band together and go after technology solutions, then they might be better able to afford them.” Some agencies may be able to afford a system, but not the one that really fits their needs. Shared services can be the answer in this situation as well. Price says, “It may not be that they don’t have the ability to afford the system at all, but the type of system needed may be out of a single city’s budget, he added. “You can go after the ‘Cadillac solution’ together.”
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Colo., is wasting no time in ensuring its departments and agencies start banding together by housing the city’s e-mail services in one place: the local Poudre School District. Through an intergovernmental agreement, after a one-time transition fee of about $170,000, the city will pay the district $20 per seat, per year to maintain e-mail and upgrade to a Microsoft Exchange system for more than 1,800 city employees, said Fort Collins CIO Tom Vosburg. “We’re contracting with them to be our e-mail provider instead of doing it in-house,” Vosburg said. “And we’re going to save around $55,000 a year doing that.” There are no losers when it comes to sharing services. The Poudre School District now receives approximately $32,000 a year in new revenue that helps diffuse the fixed overhead costs related to operating the e-mail system. With the influx of funds, the hosting organization is able to invest money beyond overhead costs back into the system for upgrades, etc., on their own terms, not by a vendor’s schedule.

can also be shared across agencies and jurisdictions. These technology solutions may save the agency money in the long run by increasing efficiencies and allowing employees to be more productive, but with budget constraints agencies may not be able to afford the upfront costs. In Minnesota, the Local Government Information Systems (LOGIS) consortium has recently rolled out a Ticket Writer application in police squad cars and in booking rooms. LOGIS describes the Ticket Writer as having the ability to capture query return data automatically, guide manual data entry, print the citation in the squad car and transmit the data to the records management system and the courts. LOGIS reports that this entire process helps save time and money and reduces errors due to redundant entry.

E-mail for All
While nearly every agency and local government can benefit from shared services and applications, some may be more conducive to sharing than others or it may be easier to get stakeholder approval to partner on certain systems or applications. E-mail is one application that just makes sense to share and Fort Collins,

Enterprise Systems — Beyond the Enterprise
While overarching systems like enterprise resource planning have made operations easier for service delivery and new ERP systems combine essential business operations — including software for accounts receivable and payable,

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Getting the Job Done
Applications that assist government employees in conducting their work

purchasing, inventory management, and human resources — under one umbrella, these systems can be expensive. Fortunately, they can be effectively shared as well, and the cost burden can be distributed among multiple agencies instead of falling onto one cash-strapped department. E-mail can be a solid starting point for shared services initiatives, but jurisdictions can also collaborate on services like payroll and administrative management. In Kent County, Mich., the Intermediate School District has begun a shared services venture where the five school districts in the northern part of the county share payroll and accounts payable services, among other programs. As many as 20 other districts may opt to join this group in 2011. Kent Swinson, superintendent of Sparta — one of the five districts participating — says that he expects Sparta will save at least $75,000 in sharing payroll and accounts payable services alone as it moves to the new plan.

While sharing systems among two or more governments is advantageous, even greater benefits may be realized via government utilization of shared public information technology hosting services. Often, geographic proximity can encourage jurisdictions to share. Counties in Colorado’s San Luis Valley were recently confronted with the news that their property assessment management software was going to become increasingly expensive through an outside vendor, so the counties came together with a sharing plan. Pueblo County now hosts the property assessment management for assessor offices, property taxation management for treasurer offices as well as geographic information service (GIS) warehousing. When cities and counties come together, they can have access to the same services, and save costs that can be redirected elsewhere. In San Luis Valley, the funds that would have been paid in fees to

the vendor now go to Pueblo to offset the costs required to run the expanded service. Pueblo County was able to implement the program within its existing budget, so no new funding for hardware was needed. At the same time, the county’s costs have decreased by 14 percent and may decrease up to 25 percent. Government leaders are not the only ones encouraged by the prospects. Members of the private sector are excited about the possibilities as well, as sharing allows governments to take advantage of the efficiencies of technologies they may not otherwise be able to afford, including Software as a Service (SaaS). “Governments always play a leadership role driving innovation in IT — and this is certainly the case with the public sector’s growing adoption of shared services and also SaaS, or Software as a Service,” said Kevin Albrecht, government solutions manager at Perceptive Software. “One
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well-understood aspect of SaaS is that governments and their partners can truly maximize the benefits of missioncritical applications like ERPs, case management systems, and enterprise content management solutions to create new efficiencies.”

“Governments always play a leadership role driving innovation in IT — and this is certainly the case with the public sector’s growing adoption of shared services and also SaaS, or Software as a Service.”
– Kevin Albrecht, Government Solutions Manager at Perceptive Software

Making it Possible
Behind every innovative idea stands the technology to make it work. Harnessing the cloud is important for local governments as they begin pushing forward in sharing services. Shared infrastructure in the cloud — either public or private — is gaining traction in many jurisdictions because it allows the spreading of fixed costs among several participants. When Gopal Khanna, CIO for the state of Minnesota, announced the firstever statewide cloud initiative he said, “Rethinking the way we manage our digital infrastructure centrally, to save locally across all units of government, is a crucial part of the solution. The private sector has utilized technological advancements like cloud computing to realize operational efficiencies for some time now. Government must follow suit.”

LOGIS
In Minnesota, the mission of Local Government Information Systems (LOGIS), a consortium of local government units, is to “facilitate the latest leadingedge, effective and adaptable public sector technology solutions through the sharing of ideas, risks, and resources in a member-driven environment.” Departments across the board are involved in this alliance, making it easy for constituents of the region to access government services. LOGIS, a quasi-government agency and nonprofit coalition, is controlled by its members with a board of directors composed of one representative from each agency. All funding decisions are controlled by the members through an annual budget and work plan, and by action of an executive committee. LOGIS applications include permits and inspection, equipment management, code enforcement, and payroll and human resources.

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Members of the private sector who have seen the benefits of the cloud agree. “By consolidating and applying the right technologies in the cloud, organizations can simplify the management of architecture to enable more focus on the business applications. This will help organizations spend more time building relationships and partnership frameworks,” said Bethann Pepoli, chief technology officer for EMC’s State & Local Government Practice. Open source technology is also at the heart of sharing services and as open

source becomes more of a mainstream practice it also assists counties, cities and districts in coming to a collective agreement that sharing services is indeed an option. “Open source software, by its very nature, is created and designed to be shared,” said John Punzak, senior national sales director of State & Local Government and Education for Red Hat. “For example, the city of Raleigh recently implemented a new open source Web portal that saved the city a lot of money while providing expanded services to citizens.”

Whatever the technology, looking to best practices and examples of shared services that have had a successful outcome is a good starting point for local governments who want to adopt a similar model or buy into an existing organization. After establishing what systems and services are the most conducive for sharing, a plan needs to be put in place for a jurisdiction to take advantage of all of the benefits shared services can bring. We’ll explore some places to get started in our next section.

“By consolidating and applying the right technologies in the cloud, organizations can simplify the management of architecture to enable more focus on the business applications. This will help organizations spend more time building relationships and partnership frameworks.”
– Bethann Pepoli, Chief Technology Officer for EMC’s State & Local Government Practice

Getting Started: Planning for Success
Fort Collins and Littleton, Colo., are part of the early crew setting the stage for shared services in the United States with their involvement in the larger consortium in Colorado, the Government Shared Services Council (GSSC). The GSSC is a standing subcommittee of the Colorado Government Association of Information Technology, or CGAIT. The GSSC is becoming well-known for its shared services initiatives — but it didn’t happen overnight. Fort Collins CIO Tom Vosburg, a member of the GSSC, pointed to a number of shared services initiatives that inspired the GSSC, including a regional consortium of cities in the northwest Denver metro area — including Boulder — that formed around a wide-area wireless network initiative. While he described this as a different sort of business model, it was a good example of cities partnering and forming a new entity to collaborate on the acquisition of technology and the
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management of a Wi-Fi network. “People understood the potential of joining together and establishing an appropriate governance structure to aggregate strength and accomplish things they could not do individually,” Vosburg said. For the last few years, the GSSC has been facilitating different work groups to develop shared services and Vosburg says they are continuing to research different

“People understood the potential of joining together and establishing an appropriate governance structure to aggregate strength and accomplish things they could not do individually.”
– Tom Vosburg, CIO, Fort Collins, Colo.

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regions. In many areas across the U.S. however, the GSSC model is still quite a new idea and it’s up to local advocates to spearhead a shared services project to get things moving.

In Washtenaw County, Mich., home to Ann Arbor and surrounding areas, Kristin Judge, the county’s commissioner, took on the role of organizer and pulled together the seven member

counties of the Southeast Michigan Council of Governments (SEMCOG) to discuss a shared services model. “I wanted to get a commissioner or two from each county and the IT director

eCityGov Alliance
The Puget Sound region of Washington State serves as a sterling example of the benefits to sharing Web services across jurisdictions. In 2001, nine area cities formed the eCityGov Alliance, an agency created to pool resources from each government body and more easily provide Web-based services to constituents. Smaller government jurisdictions that once lacked the capabilities to supply quality online services have found assistance through the backing of bigger agencies to bridge the digital divide and help deliver on good government. This has eliminated redundant services while allowing members to retain full policy authority. Within the Alliance, the cost of this support is based on the population of the given city member. But no matter the location of the constituent, each citizen or business has the opportunity to benefit equally from the information provided. The average citizen looking to obtain a building permit or buy or lease commercial property, for example, is often met with obstacles due to the wide range of zoning laws. But the Alliance has helped constituents avoid sifting through a mess of bureaucratic confusion by providing a unified source for a variety of service-specific portals. The portal, MyBuildingPermit.com, is described as a centralized location for obtaining and monitoring permits, as well as providing checklists for the purpose of safe and proper building. It is one-stop shopping as contractors can pull and receive multiple over-the-counter permits from 15 jurisdictions with a single online payment, said Toni Cramer, chair of the eCityGov Alliance Operations Board and chief information officer of the City of Bellevue, Wash. “MBP.com saves the contractors time and money by eliminating multiple trips to each city hall to pull permits and reduces costly call backs due to differing code interpretations,” said Cramer. “(So far) in 2010, 71 percent of the city of Bellevue OTC permits were issued through MBP.com.” Another portal, MyParksAndRecreation.com, allows visitors to search the parks, trails and facilities provided by the member cities. As to feedback from park users, Cramer describes a recent instance where a local mother of two young children called MyParksandRecreation.com an invaluable resource in terms of convenience and time savings. “She explained that MPR.com makes it easy to find the most convenient day camps in cities between where she lives and works,” Cramer said. “The alternative would be to use several different sources to find the same information.” These services go beyond the nine partner cities that founded the Alliance. Forty-six participating agencies covering 1.4 million citizens across five counties are now represented and able to access these portal services. “Collaboration takes time,” Cramer adds. “The heavy lifting associated with any shared service project comes down to getting staff onboard and breaking down old process silos. “We are all doing the same things, with the same goals but each city and county has established different administrative processes and policies. These differences can drive constituent customers crazy by sucking up time and driving up the cost and complexity of compliance.”

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from each county in a room,” Judge said. “We all do similar things. Everyone has a tax roll. We all do assessing. We all do dog licensing. We all run a jail and a court system.” The county members of SEMCOG agreed. “Everybody came to the table willingly, ready to work and ready to find ways to save money,” Judge said. “So we’re creating this database of what we all have, so that when someone is doing something new and needs software, they can just go to this local database and say, ‘Oakland County already has that. Why don’t we just lease it from them?’ Then we don’t have to go pay this open market price and we can share.” The opportunity to reuse and extend infrastructure technology and share government specific applications is important,

but the current fiscal crisis may also lead to further improvements. Paul Christman, vice president of State and Local Governments & Education Sales at Quest Software, encourages communities to continue making changes to the “business” side of managing technology. “State and local governments should more aggressively band together in a ‘consortium of business’ to reap the rewards of strategic sourcing and drive out inefficient purchasing and contracting,” said Christman. “We have seen states such as Virginia and Michigan consolidate purchasing contracts over the last few years. This horizontal consolidation across state agencies should be expanded to vertical consolidation with other local jurisdictions. For example, Washtenaw County

may have an opportunity to go even further and aggressively integrate their purchasing with the City of Ann Arbor and University of Michigan as well as the state.” Unfortunately, the reaction to and adoption of existing consortium buying vehicles in many places around the country has been lukewarm at best. Some previous attempts at cooperative purchasing may have been seen as threatening the self-interests of a single jurisdiction’s contracting and purchasing organization. Christman says that resistance may now be able to be outweighed and overcome by the economic necessity of acquisition and administrative cost reductions that can be achieved through common contracts that encompass several jurisdictions.

In Closing
While in totality the economic problems of local governments are immense, areas that are willing to change failing processes and embrace creative solutions are finding new paths to success. The sooner local governments team up with their neighbors, the quicker they will rise out of economic debt and ever present budget deficits. The obvious question is: Why cut program spending when resources and costs can be shared across district and county lines? Still, some skeptics see the current interest in closer collaboration and sharing as a temporary necessity with a return to “business as usual” likely to come back once revenues start to increase again. “This is definitely not a passing fad,” says Bethann Pepoli of EMC. “It will take a number of years to get the economy back on track and cost savings measures will continue to be important. In addition, data sharing and emergency communications become more critical every day. Data standards are essential for sharing information. Infrastructure consolidation and application priorities which include a scalable, secure and agile infrastructure, as well as information repositories that enable more focus on application inno-

While in totality the economic problems of local governments are immense, areas that are willing to change failing processes and embrace creative solutions are finding new paths to success.

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vation and less time on managing the operations are areas where we are especially committed to working as partner with cross boundary government agencies as one customer to ensure a simple government transformation.” The models are out there, and with greater emphasis being placed on Web-based application development, the time and cost needed to put government sharing into action is minimal. As evidenced by the previous examples, these services can take effect across

a number of jurisdictions and a tremendous variety of departments, from parks and recreation to school systems to property management. Even so, that does not mean that a more “collaborative” approach to government is inevitable. It will come only as the result of courage and intention. Many government agencies are increasingly facing the stark reality of having fewer staff, fewer resources and just as much — if not more — work to do.

Some communities still have not created an environment that even discusses collaboration, let alone pursues it. But there is cause for hope: The U.S. is the land of innovative leaders and workers. It is these individuals who will pursue and make possible collaborative government opportunities. Success will come from those who are open to new ideas and solutions. Historically, that openness has been the hallmark of the public sector IT professional.

If you would like more information about any of the program examples discussed in this paper or the Digital Communities program contact: Todd Sander | Tsander@centerdigitalgov.com

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Endnotes
1 2 3 4 5 Russell Nichols. “Fort Collins, Colo., Pays School District to Manage E-Mail Services,” Government Technology’s Public CIO. http://www.govtech.com/pcio/Fort-Collins-Colo-Pays-School-District.html?page=1 The LOGIS Blog. http://thelogisblog.wordpress.com/ Jeff Cunningham. “Kent ISD districts to move to share accounting, technology services,” MLive.com. http://www.mlive.com/northwestadvance/index.ssf/2010/07/kent _ isd _ districts _ move _ to _ sha.html Cloud Computing: Pueblo County Shared Services Partnership. http://www.thefreelibrary.com/Cloud+computing%3A+pueblo+county+shared+services+partnership-a0232177918 http://www.state.mn.us/mn/externalDocs/OET/State _ of _ Minnesota _ Signs _ Historic _ Cloud _ Computing _ Agreement _ with _ M _ 092710090511 _ MN%20BPOS%20Announcement%20Release%209%2027%20FINAL.pdf

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www.digitalcommunities.com

The Center for Digital Government and Government Technology would like to thank the Digital Communities Digital Infrastructure Task Force members for their support and assistance in the creation of this report with special recognition to the following task force members for their contributions.
Andy Pitman – Microsoft Industry Business Development Manager Ken Price – Littleton, Colo., Information Services Director Tom Vosburg – Fort Collins, Colo., Chief Information Officer Kevin Albrecht – Perceptive Software Government Solutions Manager Bethann Pepoli – EMC State and Local Government Practice Chief Technology Officer John Punzak – Red Hat Senior National Sales Director of State and Local Government and Education Kristin Judge – Washtenaw County, Mich., County Commissioner Paul Christman – Quest Software Vice President of State and Local Governments & Education Sales Toni Cramer – eCityGov Alliance Operations Board Chair and city of Bellevue, Wash., CIO Paula Hoppe – iSYS, LLC Director of Business Development

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