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Sharing Services: Can South Jersey Afford Not To?

by Matt Skoufalos
When citizens of Merchantville went over the heads of their local government and started a petition to require the borough to explore a merger with neighboring Cherry Hill, it was another sign that New Jerseyans are warming to the idea of shared services as a cost-cutting measure. With the highest property taxes in the nation at a time of its greatest economic instability, our elected officials and government administrators are scrambling to broker solutions that won’t cost them their shirts—or their offices.

A Collaborative Blueprint
Gary Passanante directs the Camden County Shared Services division. A Wharton graduate who came to the public sector after 30-plus years in private industry, Passanante is also the current mayor of Somerdale (a position he’s held for 16 years) and the only mayor on the Local Unit Alignment, Reorganization and Consolidation Commission (LUARCC).

A five-year-old state task force charged with evaluating local governments, LUARCC offers efficiency recommendations such as centralizing purchases and services. Passanante drives those collaborative efforts in Camden County, and for the past four years, the three-person staff has been responsible for managing and developing shared service opportunities among the county’s 37 municipalities.

Some of his efforts have included wrangling the few holdout municipalities that still decline to participate in the countywide emergency dispatch system, or convincing towns to join in sharing the costs of operating the county animal control services and animal shelter. The division has even developed a snow removal program whereby towns earn road salt for every linear mile of county road within their municipal borders that they clear with their own plow trucks.

“I spoke to one mayor in one community who was getting ready to pay $90 a ton for salt,” Passanante says. “They saved a huge amount of money by coming to the county.” Last year, the county collectively bargained a $53 per-ton price.

Passanante’s real passion, however, is AskGovFirst, a shared-service portal he refers to as “a Craigslist of government agencies.” When completed, the website will be a clearinghouse for towns, school districts and county agencies like the Camden County Municipal Utilities Authority (CCMUA) to barter their in-house services via inter-local agreements.

“Towns might have expertise in street sweepers, financial officers, sewer cameras,” Passanante says. “By going to AskGovFirst, they can give you a list of who has what available and when. All the paperwork is behind them.”

Still, he concedes, without the political willpower to achieve these tax savings, all the logic in the world can’t sway a voter base that’s unwilling to change.

“You could have the most comprehensive report from a consultant that says you’re going to save all this money, and at the end of the day, the only people who can take this thing across the finish line are the elected officials in the community,” he says.

Sometimes, shared-service agreements are derived from a natural performance improvement impulse. When Gloucester County moved to centralize its emergency medical services, it was not out of any desire to prove a point about the viability of collaboration. The county was out to improve its response time, which, under the new arrangement, fell to less than nine minutes per call for 92 percent of all calls, according to Gloucester County Emergency Medical Service officials.

LUARCC Chairman Jack Fisher, a long-time Gloucester County public administrator, says the arrangement was the result of “governing by the regional implications of the services that are needed.”

“It’s really about finding common, practical patterns for the delivery of services,” Fisher says. “You have to close your eyes to those artificial boundaries [that divide New Jersey towns] and say, ‘If we play to that field, we can beat the federal response time average.’ The real threshold was to save people’s lives.”

From Fisher’s perspective, LUARCC should be an initiator of these types of shared services—but he acknowledges that it can also make recommendations that carry legislative weight.

“We have these artificial entrapments that keep people from thinking outside of the box,” Fisher says. “LUARCC has written reports on where legislative release can make some of these things happen,” including uncovering inefficiencies in local government that end up costing the state money.

A Question of Balance
Mark Magyar believes the first big push toward shared services will come statewide this spring as the state’s 2 percent property tax cap takes effect—and the first domino to fall will likely be law enforcement.

Magyar covers government budget and finance issues for the nonprofit He also operates, a comparative municipal budget website developed with the support of The Independent Center that aims to provide the access and transparency citizens demand to “participate fully in decision-making at the local level.”

Magyar believes the cap could inspire “relatively radical consolidation plans.”

“The dollars are in police protection,” he says. “Quite often, many municipalities may have up to 80 percent of their salaries on the police side of the ledgers. What you’re seeing is some pretty major county consolidation efforts that are underway.”

Magyar calls the Camden County police consolidation proposals endorsed by Gov. Chris Christie and Senate President Stephen Sweeney (D-Gloucester) “probably the single largest shared services proposal anywhere in the history of the state,” ahead only of a Somerset County measure, where he says regional police forces “are almost following regional school districts in reorganizing [geographically].”

“Shared services is a tough issue,” Magyar says, but one necessitated by an unbalanced tax schedule and a down economy.

Private-sector cuts in jobs and wages, and increases in worker furloughs have compounded earnings that have been “flat or slightly down for the volume 80 percent of American workers for the last 30 years,” he says.

Magyar says that in order to adjust the discrepancy that would arise from cutting property taxes, the state would have to broaden and raise its income and sales taxes. He describes property taxes as “much more aggressive” problems for out-of-work New Jerseyans and seniors who live on fixed incomes.

“Shared services are a way to hold down the level of property tax increases while continuing to provide high-quality services, but they’re not the way anybody’s really going to cut taxes,” Magyar says. “Otherwise, we’re stuck with the highest property taxes in the nation. You can’t nickel-and-dime your way down to a competitive level of 20-25 percent reductions.”

The Carrot’s Gone
No matter how reasonable some of these ideas may seem on paper, says Sweeney, New Jersey is a “home rule” state, and its local communities are used to calling their own shots. Even if shared services could lower taxes and stabilize the economy, he says, the psychological attachment to control, or the perception of control, is politically more important to some voters.

For example, Sweeney says, when Wenonah Mayor Thomas Lombardo discovered he could save taxpayers an average of $400 per household by merging the community police department with that of neighboring Mantua Township, he was nearly crucified for his efforts.

“You drive through that town, you see signs that say ‘Save our police department,’ ‘Impeach the mayor’—all for having the gall to try to save taxes,” Sweeney says. “The only difference is you’re not going to have your name on the side of the car. Say you’re in another town and something happens, do you say, ‘I live in Wenonah, I want a Wenonah cop to come get me?’”

In a state with 566 municipal governments, Sweeney says, the duplication of service administration and oversight “is just overwhelming.” Initiatives like countywide stormwater management and tax collection services are logical successes, he says, but not having everybody on board can be costly. The countywide EMS that has helped Gloucester County shave minutes off its emergency response time is costing more than anticipated because only 16 of the 24 county towns are in, Sweeney says.

“A lot of it has to do with patronage, that small-town feel, and it comes to the cost,” Sweeney says. “Something’s got to give.”

That’s why Sweeney is heading up a statehouse initiative that would put to the proverbial fire the feet of towns unwilling to consolidate their services. In the past, similar legislative initiatives have rewarded shared-service municipalities with additional state dollars. But, in this fiscal environment, Sweeney says, “the carrot’s gone.”

“We’ve given towns money to try to do things and it doesn’t work,” he says. “This is a bipartisan bill. We don’t have to consolidate towns; we just have to reduce the cost of government.”

Sweeney’s bill would use LUARCC to perform statewide efficiency studies. If the commission finds areas where municipalities can cut costs and provide a better quality of service, but they’re unwilling to take advantage of them, it would invite a taxpayer referendum on the question. If the shared services initiatives are voted down, then the state would have the power to reduce aid to that town by the amount they would have saved by sharing their services.

“You put it on the ballot and let the voters vote,” Sweeney says. “If they vote it down, then we can reduce your state aid. If you’re not willing to help yourself, why are you asking the taxpayers of the entire state to do it?”

Moreover, Sweeney says, when services consolidate, there are opportunities to eradicate local fiefdoms and share responsibility among the most qualified personnel. He claims “we didn’t hand-pick one person” for the Gloucester County EMS program, and instead invited each municipal organization to select its own appointee. The countywide tax assessment consolidation earned resolutions of support from each of the 24 towns in the county, but that took two years to rally.

“It’s an educational issue,” Sweeney says. “You’re letting go of something you’re responsible for. They don’t want to turn over a service and see it turn [bad] either.”

Published (and copyrighted) in South Jersey Magazine, Volume 8, Issue 11 (February, 2012).
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