Should two towns become one? Merger question moves to Saugatuck-Douglas

Former Saugatuck mayor Catherine Simon has invested $4,000 of her own money in the consolidation effort. “It is going to save money,” she says. “But I also think we would become more effective as one community. We want to have a voice that is competitive with other communities.”

On paper at least, the match makes sense.

Saugatuck and Douglas, each with about 1,000 residents, share borders, tourists and land along Lake Michigan and Lake Kalamazoo. Their tax base is about the same. Their populations are comparably homogenous, each more than 95 percent white. They already share police and fire, sewer and water services, a library, a school system and harbor authority.

But whether voters should approve a merger of these cities in a ballot proposal on Nov. 5 is a matter of strong, divided, local opinion. It needs a majority in both cities to pass.

Standing on Main Street in Douglas, former three-term mayor and outspoken merger opponent Matt Balmer sees little to gain and plenty to lose.

“It won't be a good thing for the two cities. There really isn't anything to gain by putting this together.”

Look closer, Balmer insists, and you will find communities different enough from one another to have no compelling reason to change.

Former Douglas mayor Matt Balmer says “there really isn’t anything to gain” by merging his community with neighboring Saugatuck.

“We have identities that are completely different. Saugatuck is more like a spring break kind of town. It is so packed with people. Douglas is a much quieter community. It's not worth losing our identity for this.”

Beyond its local import, the vote shapes up as a referendum on a mantra of GOP Gov. Rick Snyder. Like business, Snyder says, government must find ways to cut costs and maximize efficiency. That includes shared services, consolidated school districts – and merged cities and townships.

“It is time that we view both challenges and solutions in a regional context rather than confining them to township, city and county borders,” he said in a 2011 speech in Grand Rapids a few months after he took office.

To that end, the governor has budgeted $30 million the past two years to help local units consolidate or share services.

The record for mergers is thus far underwhelming. In 2012, voters rejected the merger of the Village of Onekema and Onekema Township, Manistee County communities southwest of Traverse City. In Kent County, a proposal to consolidate governments fell apart in 2011 in the face of stiff political resistance. A consultant recommendation in July that Grand Rapids, Kentwood and Wyoming merge police and fire departments has found little support.

And if a merger doesn't happen in two adjoining tourist towns of comparable size along Lake Michigan, just where would it?

Local advocates of consolidation see pluses for both communities, while they point to a non-partisan study that projects savings of nearly $500,000 a year.

In July, the Citizens Research Council of Michigan projected annual savings of nearly $470,000 from a merger, mostly from streamlining the offices of city manager, treasurer and clerk and funding one public works department and one city council instead of two. For a home valued at $200,000, it calculated annual savings of $192 in property tax in Douglas and $184 in Saugatuck. Another study by the accounting firm Plante Moran, funded by the group backing a merger, found similar savings.

The author of the report, CRC analyst Eric Lupher, concedes those savings are not guaranteed. The projections assume personnel reductions that would have to be enacted by a new council and include salary levels that would have to be negotiated.

The CRC report cautioned that a merger will likely cost “hundreds of thousands of dollars” in legal fees and other costs to implement, expenses that could be repaid through state grants. It noted that Saugatuck holds about 80 percent of the communities' long-term debt, $3.7 million compared to $950,000 in Douglas.

But it also found unique similarities in the two communities: “Very few of Michigan’s non-urban cities are conjoined with another city and share an identity, service delivery responsibilities, and stewardship responsibilities for natural resources as do Douglas and Saugatuck.”

Mergers have been so rare in Michigan, the report added, that it will be difficult to predict its outcome there.

Sitting in the vintage lobby of the 150-year-old Maplewood Hotel in Saugatuck, former Saugatuck mayor Catherine Simon is confident a merger is best for both cities.

“I love this community,” said Simon, the hotel owner and a 23-year resident of Saugatuck. She is also a member of the Consolidated Government Committee, the group backing a merger. She has given nearly $4,000 to its campaign through personal contributions and her business.

“It is going to save money,” Simon said. “But I also think we would become more effective as one community. We want to have a voice that is competitive with other communities.”

In her view, many who oppose merger are driven by “fear of change.”

If the referendum were decided by funding alone, it would be no contest.

As of July 20, the group had raised more than $168,000 in direct and in-kind contributions, much of it with a distinct Republican flavor.

It includes a $10,000 donation from billionaire Oklahoma industrialist Aubrey McClendon through his Singapore Dunes LLC. McClendon, who has doled out several hundred thousand dollars to Republican causes, bought 412 acres of Saugatuck Township land near Lake Michigan in 2006 and has battled for years for the right to develop it. Saugatuck resident Bobbie Gaunt, a former Ford executive named to the Michigan Women's Council in 2012 by Snyder, gave $13,000. She is co-chair of the Consolidated Government Committee.

Saugatuck Township resident Travis Randolph gave more than $26,000 in personal and business donations. He has donated to the Michigan Chamber of Commerce PAC and the campaign of former GOP state Sen. Patty Birkholz. Holland-based furniture maker Haworth contributed $17,500. Its chairman emeritus, Richard Haworth, has donated hundreds of thousands of dollars to Michigan GOP candidates and the state Republican Party.

The campaign has funneled more than $60,000 in consultant fees to James Storey, appointed in 1999 to the Michigan Liquor Control Commission by GOP Gov. John Engler. Elected in 2012 as a Republican to the Allegan County board, he also served as press secretary to the Michigan state House GOP caucus.

But Bobbie Gaunt, the committee's co-chair, said merger has nothing to do with politics.

“To me, this is all about the future,” Gaunt said. “The people who have invested in this are people who have deep ties to this community in terms of their own investment in the community.”

Gaunt said “part of the inspiration” for the merger proposal was Snyder's challenge to local governments to reinvent themselves.

In 2011, the group submitted 430 petition signatures to the State Boundary Commission supporting consolidation of Saugatuck, Douglas and Saugatuck Township. In a June 2012 hearing of the Boundary Commission held at Saugatuck High School, officials from all three jurisdictions raised objections, as did numerous local residents. A few months later, the commission approved consolidation, but just for Saugatuck and Douglas.

In February, an opposition group called Citizens for Independent and Cooperative Communities submitted more than 340 signatures to the state to force a vote by residents of both cities. It has raised just under $4,000.

Douglas resident Balmer, its treasurer and spokesman, is undeterred by the disparity in spending. Owner of a downtown Douglas restaurant, he compares his organization to the “Occupy Wall Street” initiative, a bottom-up citizens group that he believes will prevail on Nov. 5. He donated to the campaign of Democratic Gov. Jennifer Granholm.

Noting the GOP connections of many pro-merger donors, Balmer believes that a merger win would be akin to a pelt on the wall for Snyder.

“We don't need to be his poster child for consolidation,” he said.

Dave Murray, Snyder's deputy press secretary, said the governor's agenda “is to help communities provide better services to their residents.” He added that merger “is a decision for the residents of those communities.”

And so the debate continues. Perched on the steps of his Saugatuck home a block removed from the downtown shops and galleries, resident Victor Gutierrez nodded his head when asked about merging.

“I do believe it would save money. We already have one fire department and one police department. Why not have one city?”

His biggest issue: What to call it?

“That's my biggest concern. I sure don't like Saugadoug.”