When Local Governments Merge, Consolidate or Make Agreements

When governments merge services
Image: Cache Creek Casino Resort Golf Course, Flickr

How cities, counties and towns can use agreements and alliances or merge governments and workforces to save money, improve services and better compete.

Cities and counties rarely merge despite the potential savings that can be gleaned with combined public services like trash collection and broadband. Why is that, and how can municipalities work better together?

Why Mergers Fail

According to the Pew Charitable Trusts, what invariably sours effort to merge are things like municipal staffing consolidations that happen when governments combine, money constraints like that of White Pine County’s when it wanted to merge with a more financially sound Ely, Nevada, and property tax hikes in select jurisdictions by states like New Jersey.

In England, some view government consolidation as a predatory land grab, as is the case with Derbyshire County Council in its lawsuit against Sheffield, England, in its effort to bring authority over the market town of Chesterfield under its city region government.

Sheffield wants “a bigger scale, a bigger footprint, so they can compete with Manchester and West Yorkshire,” said Anne Western, leader of Derbyshire County Council, when she told The Guardian back in December that Sheffield’s motivation was predatory.

According to the National Association of Counties, cities and counties (there are 3,069 counties in the United States) have only combined 42 times since the 19th century. One of those mergers, the township and the borough of Princeton, New Jersey, which formed the Municipality of Princeton in 2013, realized about $2.3 million in savings in 2015.

But prior to the consolidation, the Princeton governments attempted to merge unsuccessfully three times over 40 years.

According to City Lab, U.S. state-local preemption may also prevent local governments from making deals that consolidate or move resources across municipal silos. Currently 42 states constrain local fiscal authority through tax and expenditure limitations, which can sharply restrict a local government’s ability to raise revenues.

Some red states have progressive governance starting points; for example, laws enabling their cities to annex suburbs and grow a robust fiscal base. At the same time, many blue states have rules that keep cities and suburban municipalities small and weak,” wrote Bruce Katz, scholar at the Brookings Institution and co-author of The Metropolitan Revolution.

Government to Government Agreements

The Yocha Dehe Wintun Nation and Yolo County, Calif., recently approved an intergovernmental mitigation agreement that will provide the county and others more than $161 million for a range of public uses over the next 22 years.

The nation is expanding its hotel at Cache Creek Casino Resort, so it will deliver resources for public safety, local Capay Valley programs, roads, public transit and the county’s general fund.

Yocha Dehe Tribal Chairman Leland Kinter said in a prepared statement that the project is going to generate hundreds of construction as well as permanent jobs as it becomes an economic development asset to the region.

The nation’s Tribal Council worked with an ad hoc subcommittee of the Board of Supervisors.

“The Tribe has been a great partner,” said Yolo County Board of Supervisors Chair Duane Chamberlain. “We look forward to this new chapter in our collaborative relationship.”

Under the 22-year agreement, Yocha Dehe Wintun Nation will pay Yolo County:

  • $1.5 million within 90 days of the start of construction
  • $6.16 million each year, adjusted for inflation, for gaming-related costs and to support the county’s discretionary general fund
  • $300,000 each year for Capay Valley community-specific projects and initiatives
  • The costs of adding two more sheriff’s deputies staff and vehicles
  • $20,000 annually to the California Highway Patrol
  • $50,000 annually for local emergency and fire service districts
  • Up to $5 million in CalTrans road improvements on Highway 16

Kinter said the nation is looking forward to providing resources on important programs in the county and valley. “This shows how much we can achieve by working together, government-to-government, as partners,” he said.

Consolidating Services Under Alliances

In 2015, the cities of Seattle and Tacoma, Wash., created the Northwest Seaport Alliance to run the two formerly competitive harbors.

According to CityLab, the two harbors used to compete for business, but leaders on both Puget Sound shores saw that shipping industry consolidations would exert power over port operation negotiations and a move to merge would benefit them both.

Seattle and Tacoma port authorities worked on environmental issues, but it wasn’t until recession in 2008 and 2009 that pushed port commissioners to talk about an alliance. The alliance put facilities run by both ports under one operation, but it preserved the commissions, which still make major decisions.

So far, the alliance received both commissions approval for a $141 million investment in Tacoma’s facilities to be paid by fees on both Seattle and Tacoma docks. The upgrades will allow two large ships to unload simultaneously.

Pros & Cons of Merging Municipal Workforces

The main challenge for the merge of Princeton has been consolidating the two public workforces, according to Pew Charitable Trusts. The merged government initially bumped up lower paid employees, which kept morale up. When workers retire, or transfer jobs, vacancies are not always filled.

While some public services have improved with the consolidation, small touches like the borough’s regular picking up of detritus on sidewalks, are missed. Services like that are now on a townwide schedule.

Former Princeton Township Mayor Chad Goerner recently told the Asbury Park Press that though the former township police department was initially opposed to the merger, the consolidated police force and its pro-active outreach is a example of efficient and effective service delivery.

“We were able to reduce the number of total police in the combined department, saving about $2.1 million per year. We were able to make many of the staff reductions through attrition and retirements, and based on existing state law there were not any significant changes to wages and benefits,” said Goerner.

Additional Resources

Access Merging EMS Organizations, a digital ebook with information and resources, by EMS1.com.

Fire Department Consolidation Models

Case Study: How to Approach Library Consolidation

About the author

Andrea Fox

Andrea Fox

Andrea Fox is Editor of EfficientGov.com and Senior Editor at Praetorian Digital. She is based in Massachusetts.