COMMENTARY ON MUNICIPAL FINANCES : Cities May Find a Neighborly Approach Can Ease Next Blows : With the state deficit sure to inflict more pain, local governments should consider sharing certain services.

Orange County local government’s Class of ‘92--31 newly elected city council members who represent nearly 20% of municipal elected officials in the county--faces a perplexing set of problems as it prepares to provide new leadership in an age of limited resources.

These new officials along with their seasoned colleagues stand to reap the bitter harvest of a state fiscal crisis that is already on its way to further multibillion-dollar deficits in the new fiscal year.

Last year’s state budget disaster left cities statewide with over $400 million less for municipal services such as police, fire, public works and recreation programs. Ironically, economic development programs designed in the long term to increase local and state fiscal resources also suffered significant reductions.

With the projected state deficit currently running at an estimated $5 billion to $6 billion for next year already, it’s a safe bet that legislators will be eyeing municipal coffers to help make up the difference again next year.

That translates to significantly fewer services in our neighborhoods and communities. This climate will call on city officials to tap into creative approaches to local government in order to provide basic services to their residents.

One such approach that holds promise is the possibility of sharing services among groups of adjacent cities in an effort to increase efficiencies and reduce costs.

The idea has the potential to yield benefits to cities, but the effort will have to be balanced with the need to retain management controls to assure that quality services are provided to our residents.

A group of cities in west Orange County is already exploring areas where it might make sense to consolidate certain functions or contracts that require specific expertise on a short-term basis.

Cypress, La Palma, Los Alamitos and Seal Beach--stung by declining revenue, state budget hits and mandates that require special skills--have agreed to share consultant assistance to meet requirements of new state laws that mandate recycling efforts and new waste management programs in every city and county in California.

The basic premise is that cost savings can be realized by consolidating a contract for consultant assistance in four cities rather than replicating it four times.

Other areas hold some potential for cost savings by regionalizing certain functions where it makes sense for similar communities. For example, police dispatching might be another area that merits exploration.

The notion of consolidating police dispatch functions might be especially appropriate in adjacent communities that do not possess large police agencies. The idea may be especially timely since a multimillion-dollar replacement of the countywide law enforcement communications system is being developed that will force cities to upgrade the radio consoles used in their dispatch functions.

Rather than each city having to bear its costs for equipment upgrades required by the new system, costs could be reduced by consolidating the dispatch functions, if it makes sense for the communities involved.

There are other areas where the sharing of services might make sense.

Purchasing and vehicle maintenance are two other examples where cities might realize cost savings by consolidating resources.

But the notion of sharing services isn’t the panacea for solving the service provision puzzle local government faces.

Regionalization of services has an allure to it that can’t be denied. However, larger cities are finding that police services, for example, are better crafted for a neighborhood approach that recognizes distinctions and service needs among different areas of our largest cities.

For example, Santa Ana has pioneered the concept of neighborhood policing as a more effective deployment of police services.

The city has also cultivated neighborhood associations as a means of being more in touch with the needs of a broad range of constituents.

In Anaheim, discussion has also focused on ways in which to empower neighborhoods so that residents are more involved in service provision issues that affect their communities.

Another significant issue that needs consideration in the decision to move toward regional services is the ability of individual cities to control costs.

The notion of regional police services, for example, seems on the surface like it has potential cost savings through economies of scale. However, other issues such as who serves as the regional police agency’s board of directors could significantly impair the ability of individual cities to control costs or effectively deploy police resources in their communities.

The good news is that California fiscal climate will push local government toward an exploration of creative ideas for offering local services more efficiently at less cost. Many of these ideas will pay benefits to those with the courage and vision to pursue them.

But we need to make a balanced assessment of each and every idea. We need to be sure that the quest for a panacea doesn’t lead to an open Pandora’s box.