Benefits and Challenges of Municipal Service OutsourcingStephen Lisauskas

Introduction• Stephen Lisauskas serves as the Vice President of Government Affairs

and Regional Vice President of Municipal Partnerships at WasteZero. Experienced in finding efficient solutions to financial problems, Stephen Lisauskas coauthored an article on outsourcing for Governing magazine.

While private-sector outsourcing is associated with sending work to other nations, public-sector outsourcing involves farming out services to local providers, such as other governments, nonprofits, and private companies. For example, Springfield, Massachusetts, outsourced its grounds maintenance and achieved a 75 percent cost reduction. It also cut the costs of handling workers compensation claims by 80 percent.

Outsourcing also allows local governments to reassign insurance liability to a contractor, resulting in more savings. It permits municipal managers to focus on results rather than the cost of hiring employees and maintaining equipment. 

Municipal Service Outsourcing• However, outsourcing presents challenges. It works best with

quantifiable services and may be counterproductive when applied to loosely defined situations. Agreements on handling risk should refer to discrete possibilities. 

Outsourcing also faces challenges stemming from the politics involved. Alongside obvious problems of public employee job elimination, there are subtler issues: politicians may not be able to take credit for programs they did not control or initiate; or, conversely, they may be blamed for a program’s problems. 

Successful outsourcing requires good communications about performance measures, scope of work, and establishing a baseline. Properly administered, outsourcing helps provide the best value to taxpayers.