Problem Identification:
The delivery of many departmental services is partially dependent upon other City departments providing timely internal/support services. Breakdowns in these interdependent service relationships can diminish the effectiveness and efficiency of services delivered to the public.

Recommended Action:
Develop formal service agreements between interdependent City departments that articulate specific intergovernmental service expectations and standards.

Organizational, Service Improvement

Functional/Operational Area:

Estimated Annual Impact:
While the immediate financial impact cannot be estimated, clearly defined service expectations and standards would lead to greater accountability and a newfound focus on the quality of services delivered between City departments and agencies.

Estimated Implementation Costs:
Can be accomplished with existing resources.

Barriers to Implementation:

Projected Implementation:
90 – 120 days

Next Steps:
Beginning with the City’s most costly interdepartmental services, convene meetings between departmental service providers and departmental consumers of internal services, discuss service needs and standards, and develop formalized interdepartmental service agreements that clearly articulate expectations. Once executed, these agreements should be revisited during disputes between departments and periodically reviewed to ensure that departments are meeting their service obligations.

The City’s Finance Department utilizes an Internal Service Fund to finance goods and/or services provided by certain City departments to other City departments on a cost reimbursement basis. In FY2000, nearly $69 million was appropriated for a host of internal services including fleet management, printing, post office, telephone, telecommunications, and worker’s compensation. These activities, and the associated charges, are intended to operate on a fully self-supporting basis. This method of intergovernmental accounting is frequently referred to as a ‘chargeback’ system. While this seemingly represents an uncomplicated method for recouping the costs associated with providing these services internally, the system is not without its faults.

Departments that consume internally provided services do so without choice, as the City departments that provide internal services are the providers of first and last resort. Additionally, while departments ostensibly ‘pay for’ these internally provided services, these represent budgeted payments’meaning that departments are not responsible for ensuring ample revenue generation to cover the costs they incur through the use of internal services. Conversely, the departments that provide internal services sometimes complain that the budgeted payments they receive for providing internal services are insufficient and do not represent full reimbursements. Further compounding the problem is the fact that some internal service functions are housed within larger departments’such as the Bureau of Fleet Management within the Department of Public Works’creating a perception among some departments that consume internal services that their interests are subsidiary to larger departments.

Without passing judgment of the validity of these claims and counter-claims, it was abundantly apparent to the six Greater Baltimore Committee/Presidents’ Roundtable project teams that service expectations and standards are not clearly articulated between departments that are consumers and providers of the City’s internal services. While the organizational discipline to enforce service agreements is ultimately dependent upon the City’s executive leadership, there could be tremendous value in requiring departments to commit to developing internal service agreements. In the absence of clearly defined service expectations and standards, there are no criteria against which to evaluate the adequacy of internally provided services.

As an example, the Department of Public Works’ Bureau of Fleet Management is responsible for managing the City’s motor equipment fleet. For most departments, the regular availability of a mission-specific fleet of vehicles is critically important to the delivery of service. In cases such as the Police and Fire Departments, a certain number of radio patrol cars, fire engines and trucks, and emergency medical services (EMS) units must be available at all times. The Bureau of Fleet Management and the Police and Fire Departments should meet to determine daily targets for the number of vehicles needed to maintain public safety. The Bureau of Fleet Management’s performance in meeting the established vehicle availability targets should be tracked, and problems that arise that fall short of service expectation and standards should be probed and resolved to the satisfaction of all involved departments.