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Dec 2014 | THE DECEMBER ISSUE

THE YORK REGION N6: INNOVATION IN MUNICIPAL SHARED SERVICES
BRITTNEY YEATS & THE N6 CAOs

In the late 1990s, a number of municipal restructurings were ongoing in the province of Ontario. With little appetite for restructuring, the northern six (N6) municipalities in York Region: Aurora, East Gwillimbury, King Township, Georgina, Newmarket, and Whitchurch-Stouffville began to explore alternative options for collaborative service delivery. The N6 municipalities are composed of both urban and rural communities, and range in population size from 19,899 residents in King Township to a population of 79,978 residents in Newmarket.

 

These growing communities are strategically located with convenient access to major provincial highways, 404 and 400, and proximity to major employment areas across the Greater Toronto Area. In recent years, the focus of the N6 communities has been to build strong, self-sustaining communities where residents can live, work, and play. Collaborative service delivery arrangements have been an effective tool used by the N6 to achieve greater value in service delivery. Additional benefits such as cost savings and efficiency gains have also been realized from the arrangement.
 
The municipalities in Northern York Region had a variety of experiences with joint service arrangements prior to forming the N6 partnership. Collaborative arrangements were established between various Northern York Region municipalities in areas such as water, sewer, and transit services. In 2001, Newmarket and Aurora pursued a major collaborative initiative by merging their independent Fire Services Departments to form Central York Fire Services. A history of success with coordinated service delivery arrangements in Northern York Region strengthened the argument for broader collaboration in service areas of joint interest.
 
The N6 arrangement was formally initiated in 2005 at a meeting between the N6 Mayors and Chief Administrative Officers (CAOs). The meeting included a comprehensive discussion of service areas of common interest; where collaboration had the potential to achieve administrative and/or operational efficiencies. The N6 Mayors issued a mandate to the N6 CAOs group to further explore administrative and operational initiatives of mutual interest to the six municipalities. This mandate has remained consistent throughout the nine year life of the partnership, despite growth in the number of initiatives between the N6.
 

I. The First Major Initiative: Audit Services

 
The first N6 project was to arrange for joint internal audit services; a service that would not have been individually feasible for the member municipalities. At the outset of the project in 2005, only four of the six municipalities in Northern York Region were involved; Newmarket, Aurora, East Gwillimbury, and Georgina. The remaining two municipalities, King Township and Whitchurch-Stouffville, joined the Audit Services initiative in 2007.
 
Once the project received clearance from the CAOs, a contract Auditor was retained under the direction of the Region of York. A memorandum of understanding was signed with the Region to formalize the arrangement. The cost sharing formula was based on metrics such as the population/ assessment figures and operating costs on the annual Financial Information Return (FIR). Under the formula, each municipality was allotted a designated amount of time, which could be purchased or distributed by the other members. A risk universe was prepared for the individual municipalities and the data was used to identify areas of individual or joint interest. The audit services arrangement was also designed to be flexible to allow for the provision of consulting services on an as needed basis. The Auditor is frequently reassigned to conduct preliminary analysis on potential N6 initiatives. This flexible arrangement allows for consistency and efficient use of resources.
 

II. The Innovation

 
The success of the initial audit services project demonstrated the value of the alliance to the N6 member municipalities. The arrangement has since increased in scope and an informal process has been developed to manage projects. The process proceeds as follows:
 
  • An annual meeting occurs between the N6 Mayors and CAOs to set out potential areas of joint interest/potential projects in operational and/or administrative areas. Suggested areas for cooperation can be passed up from all organizational levels of the individual municipalities for discussion. 
  • The CAO’s group prioritizes the projects to reflect the discussion from these annual meetings. Upon identifying a number of service areas of interest, one area is assigned to a respective CAO for further investigation and reporting back to the group. When an initiative receives approval from the CAO’s group to move forward, the lead municipality is determined. Factors such as resource availability and applicable in-house expertise are considered in the selection of the lead municipality.
  • Projects which are determined to have a desired benefit in an area of joint interest undergo a four-stage review and approval process (outlined in Figure A).
  • A recent practice of the N6 has been to issue joint request for proposals, with agreement from the N6 to participate in front ending a project. Once the scope of the project is determined, the members have the option of taking an independent direction. This enables greater customization of service delivery without entirely compromising the benefits of joint procurement.
 
 
 
 
Figure A
 
  • All projects are reviewed on an annual basis through the formal reporting process back to member municipalities. The reporting occurs in the form of an annual report to each Council which includes details on ongoing and potential projects and a summary of project metrics (where available) such as cost savings, effect on customer service, and effectiveness/efficiency.
  • Periodic project reporting occurs between the project lead and the N6 CAOs group.  Occasionally, projects have required tighter controls; an example is the solid waste contract (which was projected to generate approximately $11 million in estimated savings over 10 years). The reporting arrangement for this project included conducting staff and contractor audits which were reported back to an N6 staff group. The head of the respective staff group was responsible for reporting to the N6 CAOs group on a biannual basis.
 

III. Key N6 Projects

 
Solid Waste Collection Services
The Solid Waste Collection Contract was entered into in June 2007.  It is estimated that the project will generate savings of approximately $11 million over the ten year contract period. Additional objectives for the project included the introduction of organics collection and decreasing waste generation levels. A member’s Customer Service Centre was used to manage N6 resident inquiries related to the service consolidation.  (See ‘An Insider’s Assessment’ for more on N6 solid waste collection).
 
Drinking Water Quality Management System
The Safe Water Drinking Act in 2002 required Municipal Water Works to develop a Drinking Water Quality Management System and submit approval for an Operational Plan (OP). The N6 municipalities collaborated by forming a cooperative committee to conduct internal audits of the OPs, prior to their submission to the Province. Cost savings from the initiative were realized by the individual municipalities, which were able to forego the costs of retaining a consultant.
 
Insurance and Risk Management Services Review
The N6 municipalities issued a joint RFP for insurance services during the 2012 renewal period.  A joint insurance consultant was retained to manage the process for the N6, support the N6 staff committee, assist in the development of the RFP and provide expertise in the technical area of policy wording and coverage evaluation. The four year joint services contract was awarded with a one-year conditional extension option. The N6 municipalities collectively realized approximately $750,000 in premium savings, during the first year of the project. In addition, up to a 5% group discount was made available, on the condition that all six municipalities entered into the joint contract. 
 
Accessibility Standards for Customer Service
A collaborative effort was undertaken by the N6 municipalities to meet the legislative and regulatory requirements under the Accessibility for Ontarians with Disabilities Act (AODA), 2005 and the Accessibility Standards for Customer Service – Ontario Regulation 429/07. The group drafted two common documents titled “Accessibility Standards for Customer Service Policies, Guidelines and Procedures” and “Procedures to Accessibility Standards for Customer Service”. The project team remains committed to a collaborative approach to address future provincial legislation related to accessibility. 
 
Training and Development – N6 Leadership Calendar and Symposium
An N6 Leadership calendar was developed to provide training opportunities to municipal staff at reduced rates for the member municipalities. The cost savings from the joint initiative enabled a greater number of employees to participate in the training programs than would have been possible without N6 rates. An annual leadership symposium is also held to encourage networking among the N6 partners and to provide for leadership development opportunities.
 
Northern York Region Economic Development Group
The economic development group has focused on investment attraction opportunities.  In 2011 two major initiatives included silver sponsorship of the Society of Industrial and Office Realtors (SIOR) fall seminar and the promotion of an agri-food imitative at the Greater Toronto Marketing Alliance (GTMA) Advanced Manufacturing Imitative (AMI). (See ‘An Insider’s Assessment’ for more on N6 economic development).
 
External Audit Services
In June 2012, the N6 issued a joint RFP to source the audit services market and obtain greater value in the procurement of external audit services. Prior to 2012, all six municipalities had independent service arrangements with the same audit services firm. Therefore, the joint arrangement was seen as an opportunity to achieve savings through economies of scale. The three year contract with an optional two-year extension included a 15% fee discount which was offered upon securing the participation of all six municipalities. Collective savings realized in the first year of the project amounted to approximately $153,000.
 
Web Site Redevelopment
In spring 2012, the N6 CAOs discussed moving forward with a joint Request for Proposals to re-design each town’s website and procure a common content management system in an effort to cut costs and share expertise.  Aurora, Newmarket, and Whitchurch-Stouffville decided to move forward together and formed a working group to discuss each community’s website requirements, including scope, hosting, bandwidth, user needs, and technical specifications.   The three municipalities agreed to specifications for a joint RFP that included a ‘piggyback’ clause for the benefit of any other N6 municipality that wished to join the effort.  The inclusion of ‘piggyback’ clauses is now becoming more routine for significant procurements undertaken by individual N6 municipalities and are proving to create valuable opportunities for other municipalities. As the project moved through the implementation phase, the needs of the various partners and the abilities of the service providers continued to evolve.  While the ultimate relationship with the vendors may vary from municipality to municipality, each has benefited from coming together to discuss requirements and problem solve through the implementation process.  
 
Employee Benefits Review
In 2013, the N6 Human Resources partners were tasked with investigating opportunities to combine efforts among the municipalities for cost savings in the provision of Benefits Plans. Lead by Aurora, an RFP was prepared and awarded to a Benefits Broker.  The result was a recommendation to join the York Region Umbrella Group and realize significant cost savings. Municipalities can join the group individually when timing permits.  This resulted in significant cost savings through streamlining of administrative processes and capitalizing on the buying power of the larger group.
 
Fire and Emergency Services Co-ordination
The Fire and Emergency Services portfolio is one that has been closely monitored by the N6 CAOs group.  Currently, the 6 municipalities have Master Fire Plans adopted in various years. The potential exists to coordinate any future updating of the plans. This coordination would ensure that efficiencies in resource allocation would be identified and maximized (i.e.: investment in infrastructure such as station location, equipment purchasing, human resource allocation etc.)
 
Regarding Emergency Management, a shared Emergency Management Coordinator could well serve the municipalities to meet their responsibilities under the Emergency Management and Civil Protection Act, R.S.O. 1990 that require due diligence that could be addressed via a collective approach to training, exercises and actual emergency response.  Mutual Aid, Automatic Aid, and other service agreements already exist between various N6 municipalities. The potential for additional agreements exists although variation in the types of departments (full time, composite, volunteer) may restrict our ability to aggressively pursue synergies.
 

IV. Benefits of the Innovation

 
Customer Service
Customer service is a key focus area in the preliminary evaluation of N6 projects. Collaborative service delivery projects have the benefit of enabling a zero boundary approach to service delivery. However, they must remain responsive to the needs of individual municipalities and residents. The N6 group has been committed to a high level of customer service and, as a result, continuously monitors projects with a high customer impact. The centralized waste management call centre is an example of a project where a flexible customer service arrangement was employed.
 
Uniformity of Standards
The N6 arrangement allows municipalities to provide a consistent standard, where desired, across Northern York Region. Many of the joint services initiatives have resulted in enhanced or sustained service levels at a lower cost (especially in the smaller municipalities).
 
Financial Benefits
Several of the N6 initiatives have resulted in cost-savings, cost avoidance and/or equivalent efficiencies. The most notable projects include the joint Solid Waste Collection Services, Insurance and Risk Management Services, Employee Benefits, and Web Site Redevelopment.
 

V. Issues Encountered

 
Resource Constraints
The success of the N6 arrangement has led to a continuing effort to identify projects which could benefit from collaboration. Due to the volume of projects, the workload of the N6 must be carefully managed to ensure that projects are adequately resourced.
 
Sharing Leadership
All six municipalities are encouraged to share the responsibility for project leadership. The size and resource discrepancies between member municipalities can make this a challenge, especially when large scope projects are undertaken.
 
Changes in Leadership
Challenges can be encountered when there is a change in political or administrative leadership. Buy-in from the six CAOs and Councils is essential to maintaining the arrangement. Open communication is important in enabling the members to overcome these challenges.  
 

VI. Critical Success Factors

 
Collaborative Spirit and Openness between Partners
The success of the N6 initiative has been contingent on the commitment between partners to work together to achieve a shared objective. In order to achieve this, a high level of trust and openness has been required. This has also required the partners to focus their collaboration in service areas where the joint benefit is prioritized over competitive interests. 
 
Flexibility
The N6 arrangement has built-in flexibility to allow for varied levels of participation (N3, N4, N5) and customized service arrangements. In addition, the three remaining municipalities in York Region – Markham, Vaughan, and Richmond Hill are able to participate in initiatives of joint interest, where applicable.
 
Governance
Regular CAO meetings have been essential to ensuring that projects move forward and that nimble decision making can occur where necessary. Council and CAO buy-in has been critical to ensuring continuing commitment to the initiative.
 

VII. Next Steps

 
The N6 initiative is likely to be sustained for a considerable length of time, as long as no major disputes occur between partners and the CAOs group and N6 Mayors’ objectives remain consistent. There is a clear acceptance of the initiative across the six municipalities and an awareness of the benefits and efficiencies that can be achieved through collaboration. The sustainability of the relationship has been exemplified by the increasing collaboration between N6 management teams across the six organizations.
 
Moving forward, a continued commitment to savings, especially focused on tax-base items will require increased integration between partners.  A potential short-term future initiative could be the sharing of recreation facility capacity by accommodating overflows in neighboring N6 facilities. In the long-term, joint governance arrangements, staff and consolidated service departments are a few of the options that may be explored to advance collaborative service delivery between the N6.
BRITTNEY YEATS is a Corporate Initiatives Analyst with the City of Windsor’s Office of the Chief Administrative Officer. Brittney Yeats completed her MPA at Western University and previously served as an AMCTO Municipal Management Intern with the Town of East Gwillimbury, Township of King, and Town of Newmarket.