Part 1: Options for local government service delivery
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The purpose of local government, in many respects, is to provide the greatest amount of service for the most people at the lowest cost. Citizens rightfully expect quality services for their tax dollars. Roads, clean water, wastewater, police, fire, parks, etc. are all normal expectations of the public. However, the reality of providing adequate funding for these services can be a challenge. Proposal A and the Headlee amendment limits growth in property taxes. State shared revenue also has its limitations. While some local governments make use of special assessments and have access to grant funding, others do not. Still, public services must be provided and adequately funded. This article is the first of two in a discussion of innovative methods to assist in this process of alternative tools or service delivery options.
While the local unit of government may work with the private sector in the delivery of services to the public, other options exist that may be discussed in terms of a less traditional method or tool for public service delivery. Such tools include the purchase of a service from an outside source, grants or partnerships between units of governments or private organizations. All such tools can be utilized in the overall quality of the specific service delivery.
Traditionally, many local units of government have produced the required service for its citizens in-house. In other words, in order to serve its citizens, Michigan local governments have obtained their own sources of land, buildings, supplies and equipment to provide their residents with the expected services. Local governments have also collaborated with each other or provided support for others in providing of these services. In a competitive market, a local unit may decide to purchase certain services as opposed to offering such service in house. Depending upon the circumstance this purchase may allow for a lower cost and in some cases may actually provide a higher quality service than would otherwise be possible. The caveat, however, is that there must be a competitive market for the service before deciding to purchase services. This difficulty in finding a competitive market for the needed service is especially true in a remote or rural area. In addition, the type of service will also suggest the potential or competitive market. Several of the most common areas of service being obtained from outside the local unit may include employment or job training, public health programs, bus systems and in some cases prisons/jails. In the same respect, local governments may purchase services from for-profit business organizations. These types of services have traditionally included such things as certain types of street repairs, waste disposal or towing and vehicle storage services.
Another funding method for service delivery is the use of grants. The International City/County Management Association (ICMA) has offered the view that “grants are typically less specific than purchase contracts about the activities that the producer is going to conduct or the amount of service that it will produce... and [they] … generally support programs with more broadly defined outcomes or impacts.” A local unit must also be aware that the use of grants is somewhat different from the purchase of service in the sense that grants are utilized more for unique programs such as cultural programs including the arts or museums. These unique programs may also provide services in job training or treatment for alcohol or drug programs. Lastly, grants may offer funding opportunities for programing or services for a community’s unique populations such as children, senior citizens or the homeless.
Additional tools will be continued in part two of the article.
