With budgets tight and IT staffing thin, Fort Collins, Colo., has officially surrendered hosting duties of the city's e-mail services to a local school district.

In an intergovernmental agreement, after a one-time transition fee of about $170,000, the city will pay the Poudre School District (PSD) $20 per seat, per year to maintain e-mail and upgrade to a Microsoft Exchange system for more than 1,800 city employees, said Fort Collins CIO Tom Vosburg.

From a financial standpoint, local officials said, the move makes sense. The annual fees include the city's contributions toward equipment replacement, Vosburg added, and the city expects to save $55,000 annually. Fort Collins can choose to renew or end its agreement with the district each October.

The local government had already planned to upgrade the city's e-mail system to Microsoft Exchange, and officials explored cloud solutions and outsourcing options. As city officials started looking closer to home, they realized that the PSD already used the Microsoft Exchange program for e-mail accounts serving some 30,000 students, faculty and staff.

The city and the PSD conducted a feasibility study and found that the PSD's e-mail system had plenty of space to host the city's three domains: fcgov.com, ci.fort-collins.co.us and poudrelibraries.org. Because the PSD works with a local Microsoft Gold Certified Partner to augment their in-house staff, Vosburg said, the school district had "a professionally maintained cloud solution." As part of the one-time transition cost, the city has to pay for Microsoft Client Access Licenses (CALs) and also plans to purchase a physical and virtual server.

"We recognized that PSD had built a robust and scalable e-mail infrastructure which we hoped to leverage," he said. "We found we could add our own separate post office into that mix and to do it in a way that helps optimize management of the public's resources. We've basically turned toward a private cloud strategy for e-mail."

But security concerns came up. The city has its own set of policies and local officials didn't want the school district's setup to interfere. For example, it's city policy to destroy city e-mails that have been on the server for more than 90 days. The city wouldn't have agreed to the partnership if the school district couldn't comply with records retention and other city policies. But the PSD was able to accommodate the city through a multitenant platform design that kept electronic mailboxes separate.

"Clearly our taxpaying citizens are expecting us to be more efficient with resources and work together," said City Manager Darin Atteberry. "This e-mail collaboration is just one example of how we're looking to be more efficient."

Sharing Equals Savings

In the last few years, financial hardship has turned some local government agencies into fast friends. Whereas these groups may have lived the siloed life in years prior, budget restrictions have promoted the idea of shared services as a smart cost-savings strategy.

A generic government-run shared service can cut costs roughly 20 percent, according to Jerry Mechling, faculty chairman of the Leadership for a Networked World program, which hosted the conference. But governments can't afford to wait around, said David Wilson, managing director of Accenture's state and local government practice for the U.S. and Canada. With the downturn in government revenue expected to cripple budgets for 10 or so more years, he said, departments need to start restructuring now to face the tough terrain ahead.

A recent survey by state CIOs affirms those sentiments. Along with the consolidation of applications and data centers, more state CIOs have been rolling out shared services and managed services models in light of tighter budgets, according to a report released this week by the National Association of State Chief Information Officers (NASCIO), TechAmerica and Grant Thornton.

"In the next three years, most CIOs plan to

Russell Nichols  |  Staff Writer