The central Minnesota town of Foley tried having its own police department and contracting with the county sheriff's department for law enforcement.
Now, in an effort to save money, the town with a population of 2600 is making a controversial move: it plans to employ a private security company to patrol its streets.
Nationwide, other cities have supplemented traditional police with contracted officers, said John Firman, director of research for the International Association of Chiefs of Police.
But as cities across the US struggle with the economic downturn, more will look at innovative ways of providing public safety, Mr Firman said.
''For the first time in our history … police are no longer immune from budget cuts,'' he said.
After cuts in state aid and uncertainty about future funding, Foley City Council started looking at options to save money on policing. The town decided to contract with General Security Services Corporation to provide 24-hour coverage starting in January for about $US16,000 ($15,592) a month.
Budget cuts have also forced a county school board in Colorado to sell advertising space on student report cards to help make ends meet.
Jefferson County Public Schools expects to make $US90,000 over three years from Collegeinvest, a college savings plan, for the five-centimeter ads on report cards issued by its 91 primary schools. The school board last year slashed its spending by $US40 million after reduced state and federal government support.
''We're obviously looking for revenue generators and taking them where we can find them,'' board spokeswoman Melissa Reeves said.
The Jefferson County school board already sells advertising space on buses to a bank. Ms Reeves said it anticipates making a further $US70 million in spending cuts in coming years, as the US struggles to put hard times behind it.