What may seem like the neighborly thing to do is actually a practice that can help cities save money on IT services: sharing.

When Melrose, Mass., moved forward with an IT infrastructure upgrade and data center consolidation in 2010 after receiving grant funding from the state, the city developed a scalable model to allow other cities to share its multi-tenant cloud platform.

Pushing for regionalized IT services would not only generate revenue for the city, but also make Melrose a more attractive candidate for additional grant funding, said city CIO Jorge Pazos.

“We were trying to consolidate our own stuff and create opportunities that we didn’t currently have at that point in time,” Pazos said.

And so far, the effort has shown that multiple municipalities can operate IT services on shared infrastructure, effectively driving down costs for each participant.

To develop a proof of concept, Melrose first tapped the town of Essex, just 26 miles away on the north shore of Massachusetts, to provide infrastructure as a service with a revamped platform consisting of Cisco's Unified Computing System, with blade servers.

Essex Administrator Brendhan Zubricki said the town was already interested in outsourcing its IT services to another municipality and began the process in 2011.

First, the town migrated user data to Melrose’s infrastructure. The next phase will be migrating each user’s desktop. Getting user data out of Essex means the town can avoid replacing servers when their life cycles end.

“Our goal is not to run any servers," Zubricki said. “Our goal is just to run a thin client environment.”

Pazos said that as an early adopter, Essex received a discount for migrating to Melrose's upgraded infrastructure. Zubricki reports that the move has helped the town drive down IT costs by one-third.

Creating Inter-Municipal Agreements

Shared services is a concept that's making headway in state government, but shared IT services at the local level may be uncharted territory. Pazos said an inter-municipal agreement for shared services, like other types of contracts, involves hammering out the fine print so attorneys, consultants and everyone else involved are clear on the terms.

Pazos said some of the detailed contractual terms between Melrose and Essex were decided by the state of Massachusetts. But certain additional factors arose when negotiating the terms of the agreement to satisfy both parties.

Beyond key points like determining what exactly is being provided to the tenant municipality, how the host municipality is providing those services and what the costs will be, municipalities need to negotiate provisions up front that allow either party to opt out of the agreement without breaching the contract, Pazos said.

In the case of Melrose’s agreement with Essex, this was the city’s first contract to host IT services for another municipality, so there wasn't existing contract language to draw from. But Pazos said Essex wanted an exit strategy in case the agreement ended up not working for the town.

“No one really knew what was going to happen there, and [Essex] wanted the ability to say, ‘Hey, this isn’t exactly working, so we want to be able to turn this down,’” Pazos said. “And so some of the provisions we had to negotiate were accommodations that would be made by both sides in the event that we wanted to end the agreement.”

Pazos said that for Melrose and Essex, each was given a designated amount of lead time for opting out of the agreement without violating the existing terms.

The More, the Merrier

Melrose has taken on a second municipality – the neighboring town of Saugus – to expand the use of shared IT infrastructure. Through its second inter-municipal agreement – with onboarding expected to be completed this coming fall – Melrose will host Saugus’ financial systems as well as a couple of in-house application servers.

But Melrose doesn’t want to stop there.

Ideally, Pazos said, the city hopes to host IT services for five municipalities roughly the size of Saugus. Melrose purposely built out a scalable model so that they could start with a small amount of infrastructure and grow it as the demand increased. Hopefully, with more municipalities on board sharing the infrastructure, costs will decrease for all parties involved.

“We didn’t want to take a 'build it and they will come' approach, because if we built it, we would have owned it.” Pazos said. “And [would have] had to run it with no one helping to pay for it.”

Sarah Rich, Staff Writer Sarah Rich  |  Staff Writer

In 2008, Sarah Rich graduated from California State University, Chico, where she majored in news-editorial journalism and minored in sociology. Since 2010, Sarah has written for Government Technology magazine and covers a spectrum of public-sector IT topics, including cloud computing, transparency, broadband, and other innovative projects and trends. She currently lives in Sacramento, Calif.