in the Assignment of Functions

Fundamentally Distinct Values:

• Efficiency

• Effectiveness

• Equity

• Accountability

In determining the “best” level of government to perform a particular function, these values are often in conflict.

In most services, one or another of these values is the driving consideration, while the others have little real significance to the issue.

Efficiency

Economies of Scale: Functions should be assigned to a jurisdiction large enough to achieve economies of scale – and small enough to avoid diseconomies of scale.

• Scale economies are most likely to exist in capital-intensive functions (e.g., water supply and sewage treatment); unlikely to be significant in labor-intensive functions (e.g., police patrol and general fire protection).

• Scale economies often apply to components or sub-functions, rather than to a service as a whole.

• Services involving direct and intensive personal contact may suffer management diseconomies of large scale.

Public Sector Competition: Functions should be assigned to the smallest practical jurisdiction, to allow for variation in services to match citizen preferences.

• This criterion may conflict with considerations of scale economies and “spillovers” (an equity issue).

• It may also create an equity issue over equalization of fiscal resources.

Public Service Pricing: Functions that produce substantial individual private benefits (e.g., utilities, various modes of transportation) should be assigned to a jurisdiction that can best allocate these services through user charges.

• No generalization is possible about whether this implies a local or areawide jurisdiction.

Effectiveness

Geographic Adequacy: Functions should be assigned to jurisdictions with geographic areas that coincide with the matter at issue.

• This is often most critical as an issue in major infrastructure, natural resource and environmental functions.

• Excessive tailoring of jurisdictional lines to geography may proliferate regional special districts and thus compromise accountability.

Legal Adequacy: Functions should be assigned to a jurisdiction with adequate legal authority to perform effectively.

• Issues may include finances, personnel, organizational structure, and scope of geographic jurisdiction.

• Proliferation of special districts is often a symptom of inadequate legal authority in existing general purpose governments.

Management Capability:  Functions should be assigned to jurisdictions with the necessary staff and management resources.

• This often limits the potential of the county in metropolitan issues, as well as very small municipalities and special districts.

General Purpose Government: Functions should be assigned to general purpose jurisdictions whenever possible, to ensure public visibility, accountability and a balancing of functional interests.

Intergovernmental Flexibility: Functions should be assigned to jurisdictions so as to facilitate a sharing of power in an intergovernmental system.

• Intergovernmental contracting is a common strategy to achieve this without structural reorganization – but with possible trade-offs in accountability and equity.

• The benefits of this consideration can sometimes be achieved by separating the responsibility for service provision and oversight from service production and delivery.

Equity

Economic Externalities:  Functions should be assigned to jurisdictions that are large enough to contain all significant costs and benefits of the service.

• Intergovernmental aid and regulation by a higher level of government can sometimes control negative externalities without structural reassignment of functions.

• Intergovernmental aid can sometimes also be a strategy to correct the underproduction of services with benefit spill-outs.

Fiscal Equalization:Functions involving economic redistribution should be assigned to jurisdictions with adequate fiscal capacity to support them.

• Intergovernmental aid is often used to correct fiscal disparities while allowing services to be delivered by local units of government.

Notes:

• County contracts for city services outside the city limits produce double taxation of city residents to subsidize services in the unincorporated area.

• Certain earmarked county revenue sources also tax city residents for services entirely outside the city.

• City utility extensions outside the city limits likewise often produce revenues with no corresponding service obligation.

Accountability

Access and Control:Functions should be assigned to the local level where direct citizen access and control is important – but minorities are often better served by larger and more heterogeneous jurisdictions.

Citizen Participation:Functions assigned to local jurisdictions are most open to direct citizen participation; participation in larger jurisdictions tends to be advisory and through organized interest groups.

Notes:

• Accountability is often a problem with special districts because they are politically invisible to the voters and vulnerable to capture by a particular self-interested constituency.

• Intergovernmental contracting and sharing of authority over sub-functions both often obscure the lines of political accountability.

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