Facing tight budgets, the cities of Minnetonka and St. Louis Park cut staffing last year. Only later did they realize the departments they had pared sometimes had more work than employees could handle.

Instead of adding workers, the two neighbors turned to each other.

Minnetonka recently did the health and safety review of a St. Louis Park restaurant. St. Louis Park helped Minnetonka with electrical inspections. No money changed hands. The two cities are tracking their hours, and if there's an imbalance they'll work it out at year's end.

Tough times can spur innovation, and the idea of cities sharing services is drawing interest. Representatives of almost 40 cities attended a recent forum on shared services in St. Paul.

"It's gaining traction, because cities are losing money at the state level and many are seeing revenue decline from sources like building permits and delinquent utility bills," said Patricia Nauman, executive director of Metro Cities, which hosted the event. Metro Cities represents 80 cities before the Legislature and the Metropolitan Council.

But don't expect city mergers anytime soon. Though many school districts were forced to consolidate while seeking similar sorts of operating efficiencies, experts say cities are more likely to balance sharing services with a fervent desire to maintain their civic identities.

The cooperation movement got a push last year from Gov. Tim Pawlenty, who proposed folding county human services offices into 15 regional centers and recommended that school districts buy supplies in bulk. Those ideas weren't implemented, but there are new proposals in the Legislature to push cooperation.

One measure would set up a commission on service innovation. Another would create renovation and construction grants if at least three agencies share a building. Both are sponsored by Sen. Terri Bonoff, DFL-Minnetonka, who says more cooperation is inevitable, particularly with technology, where proximity isn't key to getting good service.

The poster child for shared services may be Falcon Heights, population 5,800. Two-thirds of the city is tax-exempt land owned by the State Fair and the University of Minnesota.

"We have a limited tax base, but we still have to provide the same services as a larger city," said City Administrator Justin Miller. Asking "who can we work with?" he said, has "become part of our budget and culture."

The city's website, e-mail and telephone support comes from Roseville, as do engineering services. Police services are provided by St. Anthony Village. Snowplowing is done by Ramsey County; a street sweeper is shared with Little Canada. Falcon Heights, for its part, provides fire protection and inspection services to Lauderdale.

Falcon Heights, Arden Hills and Roseville have jointly bid street paving projects to take advantage of economies of scale.

"It seems to have worked, for the most part," said Duane Schwartz, Roseville's director of public works. "Combined, we can attract better prices and better contractors."

Roseville provides information technology services to 24 agencies, ranging from surrounding cities to a watershed district and two Ramsey County libraries. When a new Roseville library was built close to City Hall, it made sense for the city to provide Internet and telephone access through already laid fiber optic cable in the area, said Chris Miller, Roseville's finance director.

Roseville has just over eight full-time technology employees, about half employed because they manage websites, Internet access, e-mail and other technology services for outside agencies, Miller said.

"Some of these troubles we can fix right here from Roseville City Hall," he said. "One network server can serve 10 people or 1,000. So you're creating economies of scale."

Roseville's workers are on 24-hour call from other cities and agencies. Miller estimates that together, those agencies save about $500,000 each year.

"We're very upfront about what we can do and can't do for them," he said. "We invite them to compare us with the private sector and see if they can do it better and cheaper."

A year ago, Public Strategies Group in St. Paul looked at ways government could produce more results for less money. Group Chairman Babak Armajani said economic realities finally may be forcing cities to reconsider being the exclusive provider of traditional city services.

Service quality and identity loss are legitimate issues for cities, he said. He agreed with Bonoff that the easiest services to outsource are technical ones such as data processing, accounting and computer duties.

"Those kinds of services are not politically sensitive, like who's providing the police cars or fire trucks," he said.

He thinks it probably would be better to have five or 10 police departments, not 70, in the Twin Cities, but said consolidations have not always gone well in other parts of the country. "There is value in choice and competition," he said.

Armajani suspects more cities will explore shared services, to a point. "When we have always had our own police department or fire department, we are loath to give that up," he said. "It's part of our community identity."

Minnetonka officials have "thought long and hard" about that, said Julie Wischnack, community development director. Her city not only has the pilot employee-sharing project with St. Louis Park but provides services to smaller cities as well.

It can be a shock for a homeowner to open the door and find an inspector from another city, she said.

In a case like that, "the city of Minnetonka is still the ultimate decisionmaker," she said. "We are the controlling party ... [but] frankly, if staff members from another city can do something better than we can, we should do that."

Mary Jane Smetanka • 612-673-7380