The Empire Page

Background:  The Empire Page believes one key component to Improving New York must come from improving the efficiency of local government.  To that end we begin a series of interviews that will focus on local government efficiency with an interview with the Secretary of State of New York – Lorraine Cortes-Vasquez, focusing specifically on the state's Shared Services  and Smart Growth Initiatives.   Click here to learn more about Ms. Cortes-Vasquez.

1)  What are the reasons the State created the Shared Services and Smart Growth Initiatives and provide grants to encourage both?

Shared services, local government cooperation and consolidation discussions have been in state government nearly as long as we have had local governments.  In fact Governor Lehman, in an address at the 1935 Annual Meeting of the New York State Association of Towns, stated “It must be concluded that there are too many units of government in the State of New York and that the resulting complexity of local government cannot produce efficiency or economy.”

Efficient use of public resources and smart development decisions are keys to promoting sustainable communities and development.  With New York State’s property taxes over 60% of the national average, these efforts need to continue to be at center stage of our public policy debate.  What is unique about the most recent efforts, is the commitment by the Governor and the Legislature to provide incentive funding to local governments to assist them in developing and implementing ideas to reduce costs and improve the efficiency of serviced delivery.

The Shared Services progam at the New York State Department of State includes an incentive grant program to encourage municipal leaders to work together and create new approaches to local government fiscal stability.  The goal of the Shared Service program is to reduce the duplication of services and the cost of government and its burden on local taxpayers.  Going forward, with the adoption of the 2008-2009 State Budget, the grant program was authorized for a fourth consecutive year.  For this year the grant program has been renamed to the Local Government Efficiency (LGE) grant program.


2) On a scale of 1 to 10 what number would you assign to the importance to the future of New York State of local governments developing shared services initiatives?

While using a number to recognize the challenges facing local government today may be too simplistic, I would say that ensuring that our communities are competitive and sustainable in the 21st Century global economy would rank a 10 (if 10 is the most important) on the scale of importance.  As is well documented, reducing the total tax burden and the costs of living in New York State is surely a piece of this competiveness puzzle.  We feel that sharing services and consolidating municipal functions can be a way to reduce the cost of local government and increase the efficiency of local service delivery.


3) What grade would you give local governments so far?

Again, while I am hesitant to put a letter or a number grade on the intermunicipal and cooperative activities of local governments (I will leave that to others), I do applaud the efforts of local government leaders to work together.  I do know that you would be hard pressed to find any local government official that is looking to raise the percentage of local government costs borne by the taxpayer.  Everywhere that my staff and I go we hear of the interest that our local government leaders have in working cooperatively with each other, while preserving their community’s identity and respecting their local history.

As far as the involvement in the SMSI grant program, I would give local governments a very high grade.  The interest continues to be outstanding.  One measure is the response rate to our grant.  Through the first three years the program has received 768 applications requesting $144.6 million in grant funding, representing $392 million in total project funding.  Over this time, DOS has awarded 161 grants aggregating $29.8 million during the three funding rounds of the SMSI program.  While it has taken some time to launch this new grant program, we are finding municipalities have a high level of interest and municipalities are ready and willing to work with my staff to complete these projects. 


4) Give us some examples of some of the most successful shared services programs that you have come across.

We have seen a number of examples of successful shared services in infrastructure projects that require intermunicipal cooperation.  Our local governments face a number of challenges, including aging infrastructure, increasing Federal and State mandates, and rising construction costs.  The Shared Services program has provided funds for several communities in southwestern Erie County to study the feasibility of developing a joint water supply.  These communities were able to leverage our grant with a $4 million construction loan from the USDA.

In Jefferson County, the Town and Village of Cape Vincent received $400,000 for a joint water services project.  This grant for the construction of a shared 500,000 gallon water tank helped to leverage an additional $5 million in project funds for an expanded water service project.  This project also received a ‘Project of the Year’ award from the American Public Works Association.

The Town of Evans and Village of Angola in southwestern Erie County received an SMSI grant to consolidate their police departments.  The project will result in the reduction of costs for police services currently duplicated by the two local governments, as well as enhanced services to Village and Town residents.  As of January 1, 2008, the Town assumed all responsibility for providing police services, eliminating $350,000 from the Village’s annual budget.

We have also seen interest in transportation services projects.  This may reflect the comparative ease with which departments of public works and highway departments enter into shared services agreements, many of which existed on an informal basis prior to obtaining an SMSI grant.


5) How is the NYS Department of State going about assisting local governments to evaluate the opportunities for shared services?

The Department of State’s Shared Services program, administered by the Division of Local Government Services, provides grants for planning studies to assess the feasibility of undertaking shared services projects.  In addition, technical assistance and outreach initiatives include the development of regular newsletters highlighting successful shared services projects, case studies and a database of intermunicipal agreements for review by our local government partners.

The Department of State has scheduled a series of regional conferences throughout the State which will include insights into existing shared and consolidated services as well as cooperative projects and best practices by a panel of municipalities that have been through the process. They will highlight the opportunities successes and challenges encountered throughout the process.


6) What are the incentives for local governments to share services?

I like to think that there are two types of incentives – the financial incentives provided by the state to assist with these activities and the financial and service delivery incentives that may be realized through these cooperative projects.

Beginning with the 2005-2006 State Budget, municipalities became eligible for a competitive grant program for to cover costs associated with mergers, consolidations, cooperative agreements, dissolutions and shared services.  Over the past four years the program has been modified annually and the definition of eligible municipalities has expanded.

Over the life of the program, projects have been focused on shared services that include a fiscally distressed municipality, planning or implementing the consolidation, merger or dissolution of municipalities, sharing services between school districts and municipalities, sharing highway services, developing consolidated health benefit plans between two or more municipalities, and consolidating services on a county-wide basis.  Eligible grant dollars have also varied from $100,000 to $500,000 per municipality, depending upon the project type.

For the 2008-2009 grant program year (with an anticipated release date of September 2008) the 2008-2009 Budget appropriated $29.4 million for grants and implementation activities under the LGE program.  Of this amount, $26.95 million is set aside for direct assistance to local governments through grants and for consolidation and merger incentives.

The program has four separate funding categories:

* High Priority Planning Grants for a city or county charter revision that increases shared services or involve functional consolidation, municipal mergers, consolidations or dissolutions, countywide shared services/transferring functions, and multi-county or regional services are eligible activities.  The maximum grant award for this category is $50,000.

* General Efficiency Planning Grants are competitive planning grants for communities to study opportunities for shared services.  The main maximum award is $25,000 plus an additional $1,000 per municipality up to $35,000.

* Efficiency Implementation Grants to implement shared services and consolidation efforts.  Priority will be give for the merger, dissolution or consolidation of municipalities or implementing a functional consolidation, consolidating health benefit plans in two or more municipalities and for a contractual service contract or the consolidation of two or more highway departments.  The maximum award is $200,000 per municipality, with a maximum total of award of $1 million.

* 21st Century Demonstration Projects to promote large-scale transformative change in municipalities that can be used as living laboratories for municipal innovation.  This can include consolidation of services on a multi-county basis, consolidation of certain services countywide, creation of a regional entity empowered to provide multiple functions on a countywide or regional basis, the creation of a regional or city-county consolidated municipal government, the BOCES-wide consolidation of school districts or school district services, or the creation of a regional smart growth compact or program.


7) How are the results being evaluated?

DOS continues to monitor ongoing projects to evaluate cost savings.  In the 2008-2009 funding round, we will use standardized Office of State Comptroller functional expense and expenditure codes to track planned and actual cost savings.  This will allow us to more precisely evaluate the outcomes achieved by our local government partners and the return realized on grant awards.

8) What requirements are there for the Department of State to report progress to the Legislature and the Governor?

The 2008-2009 Legislation requires the Department of State to prepare an annual report to the governor and the legislature on the effectiveness of the Shared Services program on or before October first of each year.