Item Description:
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Direct County Administration to explore cost sharing, shared service or joint delivery models with state and local government entities and to develop a report that details plans, processes and recommendations for the County Board on opportunities to achieve tangible cost savings, improved service delivery or enhanced operational efficiency through formal partnerships
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WHEREAS, local governments across Minnesota face shared challenges in delivering essential services, including fiscal constraints, rising service demands, workforce capacity, aging or insufficient infrastructure and uneven technology investments; and
WHEREAS, counties and cities are facing significant cost pressures including increased labor and benefit costs, technology modernization needs, rising contracted service costs and construction and equipment inflation; and
WHEREAS, property taxes remain the primary source of local revenue for counties and cities, creating tension between maintaining essential services and ensuring affordability for residents and businesses; and
WHEREAS, counties and cities are required by law to deliver mandated services and often rely on state and federal funding partnerships to implement programs; and
WHEREAS, recent federal actions and legislation have introduced fiscal uncertainty for current and future funding. Cuts, reductions or delayed funding can result in counties and cities absorbing additional program costs; and
WHEREAS, the magnitude of state and federal revenue loss cannot be fully mitigated through cost cutting or increases in local revenue sources and threaten the ability to deliver essential services to those most in need; and
WHEREAS, in 2026 Hennepin County adopted a 7.79% property tax levy, higher than the previous 20 years. For 2027, Hennepin has taken significant budget reduction strategies to address ongoing fiscal pressure; and
WHEREAS, many cities in Hennepin County had high property tax levies in the past several years and will likely have high levies over the next several years as well; and
WHEREAS, federal legislation such as HR-1, could result in substantial fiscal impacts; for example, HR-1 is projected to cost Minnesota hundreds of millions of dollars over the next decade; and
WHEREAS, communities continue to experience rising costs in housing, healthcare, childcare, and basic goods in a sluggish economy and slowing job market while demand for county services grows in several areas, including behavioral health, child protection, public safety, transportation infrastructure and technology; and
WHEREAS, it is essential for local governments to evaluate service models that can generate cost savings, improve efficiency, eliminate redundant service delivery and leverage overlapping responsibilities and shared missions; and
WHEREAS, Hennepin County has a strong foundation and history of collaborations formalized through Joint Powers Agreements and other shared-service arrangements across multiple service areas.
WHEREAS, as the state’s most populous county, Hennepin is well positioned to lead efforts that identify and formalize partnerships that can strengthen regional capacity and maximize collective resources; and
WHEREAS, the County Board seeks a comprehensive strategy to address the fiscal and operational pressures to ensure continued delivery of mandated and core programming for County residents.
Resolution:
BE IT RESOLVED, that the Hennepin County Board of Commissioners directs the County Administrator to:
• create an inventory of the County’s existing partnerships;
• perform an environmental scan of comparable jurisdictions including peer counties through NACo and AMC;
• create a summary of relevant literature and best practices to inform collaboration opportunities; and
BE IT FURTHER RESOLVED, that the Hennepin County Board of Commissioners directs the County Administrator to:
• identify and evaluate new cost sharing, shared service or joint delivery opportunities in the short-term and long-term;
• create a framework for assessing these opportunities;
• prepare a process for exploring the opportunities that are likely to lead to new collaborations with tangible cost savings, improved service delivery/capacity and enhance operational efficiency; and
BE IT FURTHER RESOLVED, that the analysis of potential collaborations shall include a cost-benefit analysis and may include examining:
• A process for cross-jurisdictional evaluation and decision making;
• Legal or statutory requirements, constraints or dependencies;
• Legislative actions potentially required to support implementation;
• Labor force considerations related to shared services or transition of services;
• Current governance, administrative and operating structures;
• Existing funding sources (Property Tax, State, Federal, Grant, Fees, Licenses) and estimated financial requirements;
• Potential fiscal impacts on partnering jurisdictions including Federal, State and/or local property tax impacts or shifts including shifts from residential to commercial and industrial;
• Existing service integration, service volumes and opportunities to reduce duplication;
• Short and long-term implementation timelines;
• Impact on resident impacts including equitable access to service;
• Capital investment needs associated with collaboration or consolidation; and
BE IT FURTHER RESOLVED, that the County Administrator is directed to report on the analysis, findings and proposed recommendations to the County Board by March 31, 2027.
Recommendation from County Administrator: No Recommendation