Public Policy Forum Blog

A step forward for intergovernmental cooperation

Service sharing among local governments has been a prominent item on the Forum’s research agenda since the summer of 2011, when we helped form a “Shared Services and Cooperation Work Group” for Milwaukee County’s Intergovernmental Cooperation Council.  

Since that time, we have come to recognize that no area of the region better embodies the possibilities of service sharing than Milwaukee County’s North Shore.  The consolidated North Shore Fire Department (NSFD), for example, commonly is cited in state and national evaluations as an example of the efficiencies that can be realized by consolidating fire department services. The North Shore also has led the way in sharing public health, dispatch, and library services, to name just a few.

We were very excited, therefore, to be selected by North Shore leaders earlier this year to facilitate an effort to update the funding formula for the NSFD.  The original formula – created with the department’s inception in the mid 1990s – was based on three equally weighted factors: population, equalized property values, and usage, and was updated annually based on changes in those metrics.  The formula has been debated several times since then, particularly after development of the Bayshore Town Center drove up equalized values in Glendale, causing concern among its leaders that the city’s funding share would increase substantially. 

Unable to agree on formula changes, the NSFD board essentially opted to freeze the allocation percentages for the past several years.  Few were happy with that approach, however, prompting the board to seek outside facilitation to develop a new formula that would fairly allocate the department’s costs while taking into account the changes that had occurred to the department and in each community.

The Forum’s approach was to attack the issue from a data-driven and research-based perspective.  We reviewed the specifics of each of the three formula components with fire department professionals in an effort to determine whether they accurately reflected costs.  Ultimately, we determined – with consensus from city and village administrators – that two changes were warranted. 

The first was to remove the different weights for different types of properties within the equalized value component.  Commercial and industrial properties had been weighted at double and triple the value of residential properties in the original formula to account for perceived higher fire protection costs.  Our research revealed that was no longer an ideal approach, however, in light of advances in fire protection for such properties and the fact that emergency medical services now represent the bulk of the department’s activities.

We also determined that actual usage was the biggest cost driver and suggested that prior-year activity levels be given a higher weight.  After much debate, it was decided that usage should account for 40% of the formula, with equalized values and population counting for 30%. 

While not planned that way, it also turned out fortuitous that those communities that were the largest users and therefore would pay more under that component’s increased weighting also had the most commercial and industrial property and would gain the most from the equalized value change.   

The sailing was far from smooth as the new funding formula made its way through the NSFD board, but it was approved yesterday.  And, while some may point to threats by Glendale to pull out of the department and River Hills to veto the change as further evidence of government dysfunction, we view this experience differently.

It is significant and encouraging that leaders from seven distinct governments agreed to stick with their foremost shared services initiative, which is a model for other communities across the country.  In doing so, they agreed to cede control over the precise annual amount of their individual cost allocations, instead agreeing to allow the dollars to be allocated per a data-driven formula that is grounded in sound public and financial policy.

We count this as a victory for good government and another step forward in intergovernmental cooperation for our region.       

Author: 
Rob Henken