Launch Slideshow

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The urge to merge

The urge to merge

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    With the pending merger of their respective fleet operations, San Benito County Public Works Administrator Steve Wittry (left) and City of Hollister, Calif., Public Works Director Clay Lee will provide for the other what each has specialized in — the county, heavy equipment; the city, passenger vehicles. The transition is also made easier because of proximity: both operations are located in Hollister, the county seat. Photos: Nick Lovejoy Photography

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    Hollister, Calif., Equipment Mechanic Ernie Castillo's job will become more specialized after his city and the county merge services.

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    Source: PUBLIC WORKS

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    In California, San Benito County and the City of Hollister plan to merge fleet services because continuing statewide budgetary issues — like a deficit of around $13 billion — are trickling down to city and county agencies.

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    The rich are getting richer and the poor, poorer. Consolidation ensures equal access to public services for citizens of all economic means, says local government consultant Mayraj Fahim.

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    TWO BECOME ONE. Some say next year's merger of New Jersey's Princeton Borough and Princeton Township into “Princeton” works only because the two communities had similar populations and tax rates and that, because they'd shared 13 services, estimates of $3.2 million in annual savings are overoptimistic. But in a state with the most municipal bond downgradings, at least one financial analyst, Moody's Investors Service Inc., terms the move “credit positive.” The new Princeton will have about $112 million in combined debt, which is about 16% of the operating expenses of each. Map: Center for Governmental Research Inc.


Why localities say no

In December 2011, the International City/County Management Association published Coping with Crisis: How Are Local Governments Reinventing Themselves in the Wake of the Great Recession? By reviewing more than 246 articles in the association's newsletters from April 2009 to April 2011, author Carl Stenberg, professor of public administration and government at the School of Government, University of North Carolina at Chapel Hill, determined that local governments have weathered the economic downturn by reducing staff and services. But they've refrained from consolidating functions or governmental units with neighboring jurisdictions, and have been reluctant to form collaborative partnerships.

One reason is lack of trust. As Medford's Blanton explains, “There can be rivalries, and a wariness in working with larger agencies that may want to dictate work. Smaller agencies want to keep their authority.”

As one of our survey respondents wrote: “I don't feel [the concerns of] the residents of our township would get the attention they deserve.”

Another reason is that while consolidation eases financial burdens in the short term, costs may creep back. “In the past, any such reorganization cost the state even more money while the waste continues,” says a survey respondent from the Western region.

Then there are the constituents, who have final say on such proposals (see sidebar on page 30). Even with high unemployment rates, they're willing to pay higher taxes to keep their community identity and autonomy.

Taxes, however, are why more localities will consider merging with their neighbors. Stenberg predicts the next few years will bring a perfect storm of continued softness in housing values leading to lower property tax revenues, more state budget cuts to local programs, and further reductions in federal discretionary grant programs. This may force cash-strapped local governments that have exhausted their downsizing options to seriously consider consolidation.

Local government reorganization consultant Fahim agrees: “We're going to see a greatly reduced tax base, so it's clear that fragmented local governance of the order currently in place will not be able to be maintained.”

WEB EXTRA

For more examples of consolidation efforts, click here.