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Original article URL: http://bridgemi.com/2013/10/merge-governments-sounds-good-but-not-in-my-backyard/

Economy & competitive position

Merge governments? Sounds good, but not in my backyard.

In August 2012, residents of two quiet Manistee County communities faced a choice. They could vote to dissolve Onekema Village and fold it into Onekema Township, a move proponents said would save money, trim tax bills for village residents and streamline their modest government operations. Or they could keep it all the same.

Status quo prevailed – the latest evidence just how tricky the politics can get when it comes to government mergers.

“There may be an opportunity for savings. But that is weighed against attachment to a community, identity and the relationships to the community people live in,” said Eric Lupher, an analyst with the Michigan Citizens Research Council, and author of a report on the proposed merger of Saugatuck and Douglas.

Onekema Village resident Rudi Milasich attributed the results in his community to lack of trust in what was proposed.

“There was a fair amount of distrust between the village and township,” said Milasich, a merger opponent who was elected to the village council a few months after the merger vote.

“At each step along the way, the lack of trust became evident and increased. There was a sense of a loss of control over our identity. It was like a corporate takeover.”

Village voters turned down the merger 139 to 86, while township residents voted 254 to 166 in favor. It needed two-thirds approval to pass.

In 1993, following a five-year effort, voters rejected a proposal to consolidate the Village of Spring Lake and the city of Ferrysburg in Ottawa County. In 2006, voters spurned a proposal to consolidate the city of Grand Blanc and Grand Blanc Township by a two-thirds margin in both communities. A 2011 proposal to merge Kent County and Grand Rapids never got to the ballot, as it dissolved amid strong political pushback.

In the meantime, Gov. Rick Snyder continues to advocate merger and shared services as a means to make government more efficient.

Deputy Press Secretary Dave Murray noted that Snyder “believes communities can look for innovative ways to run more efficiently by sharing services, and, in some cases, merging the local units.”

Past Center for Michigan public engagement campaigns in 2008 and 2010 also found wide public support for the concept of local government consolidation and service sharing to improve government efficiency and save money.

Actual savings possible through consolidations are debatable.

A 2010 study by Michigan’s state Senate Fiscal Agency compared local government spending per person in Michigan to that of six other Midwest states. It noted that Illinois had more than 6,000 local units of government compared to about 2,300 in Michigan. But their spending per capita was similar, $4,914 in Illinois and $4,609 in Michigan. Wisconsin had 2,679 local units – more than Michigan – but spent less, $4,508 per person.

“The evidence at least throws into question the assumption that local government consolidation is likely to result in lower spending or cost savings,” the report stated.

In the 1950s, iron ore mining was still a major employer in three small Upper Peninsula communities, the cities of Stambaugh, Iron River and the village of Mineral Hills. Less than 30 years later, it was finished as the last mine in the Menominee Range closed in 1978. The population of Iron River plummeted from more than 3,700 people in 1960 to barely 2,000 in 1990.

In 2000, a majority of the three communities voted to consolidate into a single city, to be called Iron River. The change is noted with pride on the city’s Web page, which proclaims Iron River as “Michigan’s first consolidated city.”

Long-time local resident and Iron River City Attorney Mark Tousignant believes the community had little choice but to act.

“Things became more and more sparse as far as population and money,” he said.

A 2011 analysis by the city of Iron River – while conceding it is “virtually impossible to accurately identify the precise dollar value” – calculated the merger was saving the three communities about $1.3 million a year through staff reductions and consolidation of services.

But Iron River City Manager Perry Franzoi, who served as city manager in Saugatuck in the 1990s, believes savings can be overstated.

“Any so-called savings as a result of consolidation are generally short term because once the units are merged you end up with essentially the same staff less top management like a city manager and a clerk treasurer,” he said in an email.

“Just an opinion from someone who has been in both communities.”

Ted Roelofs worked for the Grand Rapids Press for 30 years, where he covered everything from politics to social services to military affairs. He has earned numerous awards, including for work in Albania during the 1999 Kosovo refugee crisis.

3 comments from Bridge readers.Add mine!

  1. Duane

    Maybe the wrong questions are being answered. Are consolidation and how much we can save the right questions?

    Should we be asking about community and why we want to be part of a community?

    When talk turns to consolidation and changing boundaries, is community and pride in our community being challenged? What if talk was about how to build better communities and why the people come together to for communities, would it be more likely find common interests and to draw people together?

    Could Bridge help the discussion by asking why we come together to form our communities, why we live in our communities, what we want our communities to do, what we can do for our communities? What if we learn our governments can do less to meet the expectations in up our communities and who does that best? Might we think less about boundaries and more about how we can strengthen our communities?
    Instead of focusing on how efficiently we can spend money why don’t we ask if we are spending it on the right things. In Douglas and Saugatuck they might gain more if the asked why they like to live there, what they want from their community, and who delivers what most effectively. They may find they have more in common and can benefit more by sharing. They may find their community is made better by coming together on the things they have in common.

  2. Charles Richards

    When Mr. Roelofs says, “Past Center for Michigan public engagement campaigns in 2008 and 2010 also found wide public support for the concept of local government consolidation and service sharing to improve government efficiency and save money.” he is unwisely conflating too separate things. There is a considerable difference between “local government consolidation” and “service sharing”. There might be a great deal of support for sharing services, but little or none for consolidation. It would have been extremely helpful if the support for each had been specified.

    And it would have been very helpful if a link had been provided to the Senate Fiscal Agency study comparing local government spending per person. Was there a significant difference in the average size of local communities in the states that were compared? Did costs vary significantly by size of community? By population density?

    Has Mr. Franzoi’s assertion that staff counts remain pretty much unchanged in the long run been tested? And what percentage of Iron River City’s budget is $1.3 million?

  3. Bill Vajk

    I recently published a rough study of Iron County, MI, where the consolidated Iron River lives, and found that for a total population (state estimate 2009) of 11,633 we have some 195 public officials for a ratio that has one municipal public official for every 62 men, women, and children, not including county officials. I estimate that the ratio drops to one public official for every 50 men, women, and children once the county officialdom gets added in. Not public servants, mind you, but officials. The problems with the Iron River consolidation have to do with the complete failure to overhaul and streamline the corporate culture of the governing group(s). It took 8 years after consolidation for the city to sell off redundant public works (DPW) assets (mostly machinery) that annually saved thousands of dollars in liability insurance premiums. Redundant DPW employees were retained until retirement, some for more than 10 years. The city continues to pay for health insurance for early retirees till they achieve Medicare. Records from the predecessor municipalities are still strewn in cardboard boxes on a floor. One FOIA request I tendered had a $70+ search fee attached because the information was disorganized in those boxes. Fringe benefits, as we only recently heard, had climbed to significantly over 100% of income forcing a drastic reduction of the police force. The city recently closed a block of a city street that it cannot afford to repair, forcing an additional mile a day car travel for those affected, and there has been talk about shutting off half the city’s street lighting as a cost savings measure. And City Hall employees (including Mr. Franzoi) continue to work a 9 to 4 shift that represents 82% of the hours the rest of us put in our jobs for 100% of the pay. Please see the online edition of the Iron County Reporter for last week, particularly the reader opinions column. In the meanwhile the city continues with its draconian enforcement of ordinances that clearly aren’t serving the public, but is rather driving the destruction or abandonment of taxable housing units. If you want a near perfect example of how not to run a city, study the last 13 years of the consolidated City of Iron River. Consolidation is only one critical half of consolidation. The other half is a review of management technique and elimination of wasteful thinking. But it pays to keep in mind that without eliminating extraneous “officials,” each of who has their own vision of plans to “improve things,” no advance in efficiency is possible. The only salvation for municipal economies in this county is for government to take an active hand in repopulating the housing that it acquires through abandonment and failure to pay property taxes. Given the broken window syndrome, there isn’t a lot of time available between abandonment and the necessity of repopulating a property before destruction by vandals. And needless to say, no such program is available. Stay tuned for more “how not to do.” The net effect is that the longer term failure of consolidation for Iron River sheds plenty light on the way to success. Consolidated governance has failed so far in Iron River, but it doesn’t have to. Hopefully our population is waking up to the realities, and will force success on a heels-dug-in group of local politicians.

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