Shared Services will save Oswego County at least $1.7 million in 2020

OSWEGO – For decades now, the concept of governmental consolidation, villages merging with towns, towns merging with other towns, city and county districts merging into fewer districts, cities merging with other cities, school districts merging, fire departments merging, police departments merging, and on and on and on, has lured innumerable supporters into the nearly impossible goal of creating a perfectly efficient, non-redundant government.

Central to this political dream, and serving as a rationalization for it, was the idea of shared services. If you have something I want, and I have something you want, why don’t we just make some sort of deal saving us both time, money, and aggravation? If we both want to buy a new steamroller but neither one of us has the money to do so, why don’t we just split the cost and share it? If a village has a great fire department but not much of a highway department, and a town has a great highway department but not much of a fire department, why not share the best of each municipality with the other? Win-win. Or better yet, why don’t we just merge?

This went on for years and years as one, united dream. And as a result, the goal of a centralized, consolidated government with all its shared services benefits was very rarely attained. For it seemed that no matter how many advantages government consolidation offered or how many enticements the state tempted the municipalities with, the people were not willing to give up their local governments and merge them into something bigger.

Finally, in the past few years, the light went on in New York, and a new idea dawned. Break this dream in half. Forget about consolidation. Save shared services. Don’t, as the French philosopher Voltaire said 250 years ago, let the perfect be the enemy of the good. In other words, do what you can. Don’t wait for perfection. Settle for the good. And in the case of shared services, the good can be very good.

One aspect of human nature has stood in the way of this newer philosophy taking off. When it comes to politics and governance, how do you get anyone to do anything? Enticements help, but mandates really make things happen.

And so, as Oswego County Administrator Philip Church recounted Tuesday, Jan. 14,

“In 2017, the state budget included a mandate that every county form a Shared Services panel. And that panel had to consist of every town supervisor, every village mayor, every city mayor, and be chaired by the county’s CEO.”

In Oswego County, Church is considered that CEO.

“What the state required,” he continued, “is that the panels get together, come up with ideas to share services across municipalities, and put them into a report of estimated savings, have three public hearings on the draft plan, and adopt a plan by the end of the year and get it to the state budget office to file it.”

So, there’s the mandate. Here’s the enticement:

“A county that submitted a plan,” Church said, “if you then carried out those shared services projects during that ensuing year, the following year, you’d be able to apply for reimbursement from the state on how much you saved.”

The state mandate does not require that a county submit a plan or list of proposed shared services every year. Oswego County chose to skip the first year, 2017, and waited until 2018 to submit a proposed list of shared services projects they’d complete in 2019. They are now working to apply for reimbursement from the state for what was in last year’s plan.

These plans are a lot of work, and as a result, said Church, this year started off with a feeling the panel would skip 2019 and come up with a plan in 2020. “But as the year went on,” Church said, “some of the governments, including the county, came up with some ideas, and we met late in the year and put together this plan so that we could generate the ability to apply for reimbursement in 2021.”

Tuesday’s meeting, attended by a walloping five people other than Church, at least three of whom were from the press, was 2019’s last requirement, according to Church, “a public presentation of the plan the panel came up with this year (2019).”

And certainly, that plan seems to have been worth the effort. It includes 10 shared services proposals. Final estimated savings for each proposal are not possible this early in the year, but one that has been estimated is impressive. By combining with Onondaga County and the city of Syracuse, Oswego County stands to save almost $1.7 million in its employee and retiree 2020 pharmaceutical costs. That’s quite a savings in itself, but the state incentive to create this shared service, matching that $1.7 million, makes it even better.

“The projects that are proposed here in the 2019 plan have to be carried out in 2020,” said Church, “and if they’re carried out in 2020 and save money, then in 2021, we can apply to the state for the reimbursement that matches whatever the savings was.”

In anticipation of that nearly $1.7 million in savings, “we were able to lower the 2020 budget tax levy by that amount,” Church said.

Most of the other projects listed in the plan will probably result in smaller savings. Those include sharing web services, procurement, tax software and a credit card system that will enable people to pay taxes online, a joint screener purchase, the sharing of highway equipment for road repairs, shared grant consulting services, REDI grant administration of the state grant to help mitigate Lake Ontario flooding damage, and two proposals for sharing pre-development consulting services for two large projects, one a wastewater treatment plant and the other a water/sewer project involving the towns of Parish and Hastings and the village of Parish. The rules of the game necessitated applying only for a small portion of the two large projects’ costs.

“Because things have to be completed within a one-year time,” Church explained,” there’s a lot that’s involved in a water/sewer project, multiple steps that can take multiple years. If you put it all in one year, you’re not going to get it all done, realistically, in one year if you put it all into one plan. So, we’re breaking these up into each step, putting it into the plan for multiple years but different steps because of this rule. So, this is just pre-development consulting services for those projects.”

The county’s final report on its shared services plan for 2020 was submitted to the state in the last week of December.

In Church’s view, “it doesn’t save a lot of money. Most of it is back-office savings. It’s about 1.6%, but every little bit helps, and we’re willing to do this.”

The county’s municipalities are not compelled to actually undertake the projects proposed in the plan. They will, of course, only be reimbursed for those projects they do choose to complete.

“Each panel report is non-binding on the municipalities,” said Church. “This is only the town supervisors, village mayors, city mayors, and myself voting. We can’t bind our own governments to these. This is just a plan. If they want to follow through on any aspects of this, then their town councils, village councils, city councils, county legislature would have to vote to approve moving forward on any of these, along with any inter-municipal agreements that would be required.”

As has been noted, putting these plans together is a lot of work done by a lot of busy people. And so, the question arises, Is it worth doing year after year?

“I say that if the state follows through on its end, and actually reimburses in a timely manner what they promise to reimburse, it’s worthwhile,” said Church, “particularly if you have a project like the pharmaceutical that saved $1.7 million. If the only projects you can come up with are things that save $10,000 here or there, we’d probably end up doing those anyway, but when you get into all the travel of the officials, the salary of the officials, that they’re spending time, you’ve got to come up with projects that are going to save more than what it costs to put the plan together.”

The savings realized by joining together to purchase pharmaceuticals is substantial. But there’s an even bigger potential savings that’s in many municipalities’ crosshairs with major hurdles in its way.

“The real savings would be in areas like health insurance,” said Church. “Those would be huge numbers. But, state laws are in place that prevent us from, or make it extraordinarily difficult to, bring multiple municipalities under one umbrella. So, we asked them to take a look at removing obstacles to the shared services that they were asking us to do. But, there’s been no change in that.”

In the next round, Church said he’d “really like to see the state remove the hurdles that are preventing the pooling of municipalities for health insurance. Right now there are certain restrictions, one of them being the number of covered lives (county employees and retirees) in order to join a consortium, a municipality has to have a certain number of covered lives, if not, then they’re just subject to the open market and they’re not allowed to join in with another group.”

The county does have a big enough number of covered lives to potentially join a consortium, Church said.

“But overall, most of the municipalities in the county don’t have enough covered lives to be able to join.” So, a small town is “left out in the cold.”

“There was a huge interest in (a number of counties and smaller municipalities joining together to form a consortium) in ‘17 and ‘18,” Church said. “In fact, I even, at one of our panel meetings, brought in a consultant who had some expertise in the forming of a consortium to talk with them all about it. But in the end, unless the state changes the laws, we can’t really do it here.”

What plan, if any, the county and its municipalities will propose this year remains to be seen.

“The state amended the Shared Services law in 2019 to make our panels permanent,” Church said. “So, we have to meet every year, at least twice a year. We’re not required to come up with a report every year, or a plan every year, but if we don’t, we have to vote on a statement saying why we didn’t do one. So, I’ll be planning several meetings, probably at least three during 2020, to determine if the county and the municipalities want to come up with a 2020 plan.”

Johnson Newspapers 7.1

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