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Is bigger cheaper? citites and counties contemplate merging or sharing

Minn Post December 8, 2010

With austerity in vogue, the how-to question keeps popping up: How to save money? How to wring more value from what you already have? How to cut back and still get what you need?... "There's a lot to be said for efficiency without the political contentiousness of full merger."

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12.08.10 Minn Post Lindsey Merging.pdf


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With austerity in vogue, the how-to question keeps popping up: How to save money? How to wring more value from what you already have? How to cut back and still get what you need?

Cities are asking those same questions. By cities I mean the conglomeration of governments that make up the typical metropolitan unit. Atlanta, Seattle and Phoenix, for example, each contains dozens of separate municipal and county governments as well as school boards, park boards, transit authorities and other such bodies. Surely among such close neighbors there should be savings for taxpayers if police forces were merged, fire departments combined, street services consolidated, computer systems shared.

It's only when you get close to home that you realize the difficulty. What seems obviously prudent in the abstract becomes impossible when you know the petty jealousies, suspicions and rivalries that dominate local politics. Minneapolis and St. Paul, for example, are by any reasonable geographic reckoning the same city. But combining their governments would be unthinkable. Minneapolis and Hennepin County overlap and duplicate in many ways. But a consolidated government would be politically impossible even if economies of scale were clearly evident -- and even if state law allowed it, which it doesn't.

Not that city-county mergers haven't happened elsewhere. New Orleans and Orleans Parish combined in 1805. Boston, Philadelphia, San Francisco and Denver are products of countywide consolidations. New York's amalgam of five boroughs (Manhattan, Bronx, Queens, Brooklyn, Staten Island) was cemented in 1874. Most recently Nashville, Jacksonville and Indianapolis merged with their counties, with Louisville joining the list the list in 2000. Altogether, there have been 40 city-county mergers -- big and small -- across the country. But almost none has come easy.

Consolidation is rare
"For those who try to consolidate, the failure rate with voters is about 85 percent," said Suzanne Leland, a political science professor at the University of North Carolina-Charlotte, who, with Kurt Thurmaier, has written extensively on the topic. (Their latest book is "City-County Consolidation: Promises Made, Promises Kept?")

Saving money is almost always offered as a reason, Leland said. But voters tend not to believe those claims, or they look for excuses not to believe. Often they fear that suburban taxes will rise and that suburbs will lose their comparative advantage in drawing new business and residents. Often they don't trust claims that services will improve, fearing instead that suburban services will decline to urban levels.

Conversely, many urbanites -- especially blacks and Latinos -- fear that consolidation will bring a loss of political power and community identity. All in all, the ever wider gaps in income, property value, ethnicity, culture and partisanship within metropolitan places makes consolidation less and less likely.

When mergers do happen, Leland said, they tend to draw on voters' beliefs that a unified city will have a better shot at attracting economic development and status. Kansas City, Kan., merged with Wyandotte County in order to land a major NASCAR track, for example. Louisville's merger with Jefferson County was driven by fears that Lexington would soon become Kentucky's largest city. Consolidations in Indianapolis, Nashville and Jacksonville were aimed partly at expanding their populations so that they could appear larger than "big cities" like Boston, Cleveland and Atlanta.

Do mergers save money?
Even when consolidations are considered resounding successes, as in Louisville and Indianapolis, there's no clear-cut evidence of lower costs because taxes and services are moving targets. Indeed, there's always the possibility that larger governments will grow larger bureaucracies. And there's a line of thinking that smaller governments competing with one another might produce lower costs.

State law is another major impediment. Minnesota, among several states, forbids city-county consolidation, although it allows cities to merge with cities and counties with counties. And it encourages all levels of government to share services under joint powers arrangements. Therein lies potential for savings in the metro area.

"There's a lot to be said for efficiency without the political contentiousness of full merger," said Greg Lindsey, a political science professor at the University of Minnesota's Humphrey Institute. He followed closely the aftermath of the 1969 Indianapolis-Marion County consolidation. "They left out police, fire and schools because it was too difficult," he said. "They couldn't even agree on the color of the police uniforms," he said. Only much later, in 2005, did the city achieve a unified police force.

Charlotte, N.C., which has a single city-county school system, has developed a kind of two-tier police force in which city officers patrol and investigate crimes throughout Mecklenburg County while sheriff's deputies serve all warrants and operate jails. That's notable because police and fire departments offer perhaps the greatest potential for savings, if only because they eat up such large portions of municipal budgets (often half). Still, police and fire services are hardest to merge because they are so emotionally attached to local communities. Union contracts, pension funds and department traditions add more barriers. Minneapolis has failed even to fold its parks police into the regular force.

Hennepin-Minneapolis cooperation?
"Inertia always seems to win out," said Hennepin County Commissioner Peter McLaughlin, who favors stepped up efforts to merge city-county services. Mid-level officials will nearly always find to protect their territory and maintain separation, he said. One exception was Hennepin County's 2008 takeover of the city library system, an effort he helped to lead. Early indications are that the merger, although painful, has saved some administrative costs and prevented the closing of several city libraries. McLaughlin said the county is interested in taking another stab and combining the 911 emergency call system, an invitation the city rejected in 2005. "Minneapolis residents are paying twice for 911, and that doesn't make sense," he said.

After a decade of ever tighter budgets and big cuts in state aid, Minneapolis Budget Director Patrick Born has thought long and hard about how the city and county might combine overlapping functions. Revisiting the county's 911 invitation would be a good first step, he said.

Sharing back-office operations
Still, the most realistic potential for savings is in back-office operations, Born said, naming technology, insurance and other benefit plans, purchasing, accounting, payroll, record keeping, revenue collection and maintenance of vehicle fleets, buildings and other property as possible joint projects. Some kind of blue-ribbon panel might be needed, he said, because mid-level employees would fiercely oppose consolidation, especially in times when jobs are scarce.

Among other functions, the merging of city and county health departments has been discussed. (St. Paul and Ramsey County have done it.) Folding the city's civil rights department into the state's human rights office has been a topic. Sharing Minneapolis' successful 311 citizens' question/complaint system with Hennepin County or nearby suburbs is another idea, Born said.

Other potential sharing would be difficult. Unlike many cities, Minneapolis jealously guards its parks system and would resist any hint of merger. Combining city and county public works, planning and economic development functions would be almost as hard, although Born wonders if the city and county shouldn't consider sharing office space for some operations. "Breathing the same air tends to promote more working together," he said.

St. Paul-Ramsey offers a model
Indeed, St. Paul and Ramsey County provide a better collaborative example, perhaps because the city and county are smaller in size, more coterminous and don't have the dramatic racial/income contrasts that beset Minneapolis and Hennepin. St. Paul and Ramsey share public health, purchasing, building maintenance, printing, police dispatch and the 911 emergency call system. The city parks department and school system also cooperate and share buildings for afterschool activities.

"We're looking for more opportunities to share functions with St. Paul and with our other cities, too," said Deputy County Manager Heather Worthington.

With local governments continuing to take brutal hits to their budgets, collaboration is not only prudent but increasingly necessary. Several states, including Texas, New York, Pennsylvania, Florida and Indiana, are studying ways to encourage city-county consolidation and a cost-saving measure. A number of cities, including Omaha, Albuquerque, Milwaukee, St. Louis, Charlotte and Pittsburgh, are looking into the prospect. Despite a lack of evidence that mergers necessarily increase efficiency, there's a belief that efficiency is possible if mergers are done right. Moreover, as Leland and Thurmaier concluded in their book, the promise of a higher profile and a better chance at economic growth seems to have paid off for consolidated cities. In that sense, bigger might be better.

Afterthoughts
• The Minneapolis-St. Paul metro is expected next year to launch a unified economic development effort with a single, privately-funded agency. The effort is guided largely by the Itasca Project's job growth initiative.

• Mayors R. T. Rybak of Minneapolis and Chris Coleman of St. Paul outlined the effort this week at the Brookings Institution's Global Metro Summit in Chicago.

• A merged Minneapolis and St. Paul would become the nation's 20th largest municipality (pop. 666,631), just ahead of Boston, Baltimore, Seattle and Denver, and just below Austin, Fort Worth, Charlotte and Memphis.

• A consolidated Minneapolis-Hennepin County (1.16 million) would form the nation's 10th largest city, just ahead of San Jose and Detroit, and just below San Diego and Dallas.

• A merged St. Paul-Ramsey County (pop. 506,278) would make the nation's 35th largest city, just below Albuquerque and just above Kansas City.

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