City of Newport News & Newport News Public Schools Shared Services Initiative October 7, 2008

1. City of Newport News & Newport News Public Schools Shared Services Initiative October 7, 2008

2. City Strategic Action Plan Establish a collaborative process with the School administration to explore the consolidation or sharing of administrative/ support services. Identify the functional activities that could be merged to achieve a reduction in overhead costs.

3. Why Share Services? List from GFOA: • Federal, state and local budget shortfalls • Aging infrastructure • Unfunded mandates • Pension and retiree health care obligations • Increasing public expectations

4. Advantages of shared services GFOA • Achieve economies of scale • Achieve economies of scope • Achieve higher service levels and reduce duplication • Optimize less frequently used facilities, equipment, and services • Cost savings

5. Potential barriers to collaboration GFOA • Loss of autonomy / control • Resistance to change • Concern for the quality or quantity of service • Bad past experiences may need to be overcome • Difficulty determining cost of service and allocation method • Each participant will naturally look out for their organization’s interests first and the new entity’s second • Gain is too far out in time

6. What are we currently sharing? • Transportation • Athletics • Child Nutrition Services • Channel 47 • Plant Services • Cooperative purchasing agreements

7. Shared Services Continuum GFOA • Purchasing and insurance pools • Contracting with another government for services • Sharing facilities • City/county mergers • Service provision transfer Increasing: Change to service architecture Political support required Administrative trust required Maximum integration Minimal integration • Merged departments • Shared contracting with private provider • Sharing information • Shared equipment • Coordination of individual efforts

8. Filtering opportunities for shared servicesSource: A.T. Kearney Portfolio of functions Core competencies • Building Services • Procurement • Print Shop • Recreation • Self-Insurance • Transportation • Fleet Management • Video Production High-risk activities • Activities requiring customer intimacy • -Loss of confidential data or intellectual capital • Activities requiring specialized technical or business knowledge • -Regulatory compliance Narrow scope, few skills, small economies of scale Shared services opportunities • Small local operations • Weak business case

9. Current Schedule • FY 2009 • Work groups determine what services, facilities, equipment can be consolidated or shared and identify potential cost savings • FY 2010 – 1st Quarter • Recommendations to City Manager/Superintendent • FY 2010 – 2nd Quarter • Report to City Council / School Board for review and adoption

10. A framework for shared services Source: A.T.Kearney Clearly define the shared services mission, its relation to the customer base, and its overall role within the organization. Service vision Service vision Senior leaders and representatives from business units develop strategy and oversee functional management. Organizational and governance model Determine cost of providing service; should be simple and equitably allocated. Service contracts Strong commitment to shared services by top management Customer-focused mindset of support staff Service-level agreements Establish agreements between the shared service organization and its internal customers regarding processes, service delivery, cost, timing and other benchmarks. Performance measurement Create a balanced scorecard approach tailored to various levels of the organization; ensure that measures align with the mission and objectives.