CHAPTER 1. INTRODUCTION Kurt Thurmaier Purpose This handbook serves as a primer, a prelude to your local government developing and implementing an alternative approach to delivering public services in your community. It is not designed to be the bible of alternative service delivery (ASD) options. A major goal of this handbook is to synthesize academic and practitioner knowledge about ASDs so local governments can build innovative capacity for providing public services more effectively and efficiently.
Contracting/Outsourcing with private or nonprofit source Managed Competition Contracts with internal and external competing units Local Government Core Service Delivery Funded and provided by internal unit of the local government Public Private Partnership (3P) Shared Risk Strategic Privatization No public funding or production of service Interlocal Agreements Shared service delivery with other local governments Informal and Formal Arrangements Service Consolidation Combined or Joint Provision of Serv
Outsourcing-Contracting Out (Chapter 2: Alicia Schatteman) Outsourcing is the concept of taking internal organizational functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality, obtain specialized services and expertise, or free organizational resources for other activities. Outsourcing was first done in the data-processing industry and has spread to nearly all areas of the service, manufacturing and public sectors.
particular ASD. We invited 4-5 communities in each focus group. There were two focus groups for interlocal agreements; officials from communities under 25,000 and another from communities over 25,000 population. All groups convened for a day-long seminar on November 9, 2012 at the NIU-Naperville campus. Over the lunch hour, the officials were divided into two larger groups: one of elected officials and one of appointed officials.
CHAPTER 2: OUTSOURCING-CONTRACTING OUT Alicia Schatteman Definition: Outsourcing is the concept of taking internal organizational functions and paying an outside firm to handle them. Outsourcing is done to save money, improve quality, obtain specialized services and expertise, or free organizational resources for other activities. Outsourcing was first done in the dataprocessing industry and has spread to nearly all areas of the service, manufacturing and public sectors.
What we learned from a survey of recent research: • Organizations typically decide to proceed with outsourcing based on the following considerations: • Financial: condition of fiscal stress requires innovation • Higher capacity for risk • Innovation: manage limited resources with high quality services • Access to external resources and knowledge • Flexibility for staffing and hiring What we learned from the focus group discussions: The sample for our focus groups included six municipalities ranging from a l
CHAPTER 3: MANAGED COMPETITION Kimberly Nelson Definition: Managed competition, also called public-private competition, attempts to inject competition into the system in order to determine the most cost-efficient way to provide municipal services. Under managed competition, a public-sector agency competes with private-sector firms to provide public-sector functions or services under a controlled or managed process.
CHAPTER 4: INTERLOCAL AGREEMENTS Heidi Koenig Definition: An interlocal agreement (ILA) is a contract between governmental entities that enables them to work with each other in the interest of cooperatively sharing resources for their mutual benefit. An ILA can take many forms, ranging from an informal handshake agreement to elaborate contracts structured according to statutory requirements and filed with a state agency and local county or city recorder.
CHAPTER 5: SERVICE CONSOLIDATION Katherine Piker and Craig Maher Definition: Service consolidation focuses on agreements between governments to merge existing departments into one unit which is overseen by representatives from both governments. That definition excludes arrangements in which one government contracts with another in order to receive a specific service (e.g., regional dispatch).
CHAPTER 6: PUBLIC-PRIVATE PARTNERSHIPS Gerald Gabris Definition: Public private partnerships (P3s) in local government are the most complex and unique forms of alternative service delivery. A 3P venture is a long-term, strategic contractual agreement between a local government and a private sector entity, where the skills and assets of each sector are shared in delivering a service or facility for the use of the general public, and where each party shares in the risks and rewards.
CHAPTER 7. ORGANIZATIONAL READINESS FOR ALTERNATIVE SERVICE DELIVERY Kurt Thurmaier It should be apparent to the reader that some alternative service delivery innovations are more difficult and transformational than others. For example, interlocal agreements are widespread and cover both informal and formal agreements between jurisdictions. Service consolidation requires a much more extensive and intensive agreement because it involves a high level of collaboration and political consensus to work.
a neighboring municipality and also considering service consolidation to further improve delivery outcomes. Both elected officials and appointed managers agreed that developing an ASD orientation is an opportunity to create a culture of accountability in a performance driven organization. Managers noted that “cooperation dwindles as more and more cuts occur.
o Political data accrue from engaging employees and citizens with strategic planning and process reengineering. Organizational Readiness for ASD Options The results of our analyses across these five types of ASD options suggests that municipalities need to consider both the strategic nature of their service delivery options, and whether their organizational culture is ready to embrace, develop, and implement an ASD strategy. Figure 7.1 arrays the constellation of ASD options in two dimensions.
Even more consequential is a public-private-partnership investment. This option requires a long-term investment and shared risk for both the municipality and the private firm. The consequences of error demand a careful, strategic approach to estimate the risks and rewards—economic and political.
