Archive for the ‘Consolidation’ Category

If a religious leader wrote an article for the paper during an election season stating that their religion was the “only answer” and then implied that not all candidates were as strong believers of the faith as others, I have no doubt there would be a public outcry admonishing this leader to keep religion out of politics. Beyond that, it wouldn’t be surprising if the IRS and ACLU trained their sights on the leader’s organization as a result.

So does anyone else think it’s inappropriate for FMCC President Dustin Swanger to essentially do the exact same thing? In his article published on October 26th in the Amsterdam Recorder, he asserts that the “only answer” for economic growth is through “regional thinking/cooperation” (aka consolidation) and then all but asks us to vote for those who subscribe to that ideology. Of course he carefully hedges and stops short of endorsing any specific candidates, but overall, the message is clear: vote for the “true believers”.

Non-profit organizations risk their tax-exempt status when they endorse political candidates. I’m not sure if FMCC is technically subject to the same restriction. But the college president is a taxpayer-funded, non-elected position. I think Swanger comes very close to overstepping his bounds by using his position (and the visibility that position gives him) to promote a political point of view.

Make no mistake, the latest article from Swanger does not use the term “consolidation” however the idea of combining all localities into a single regional government has been clearly articulated and advocated for in past articles. He’s just using different terminology now.

And also make no mistake that just like all other consolidation proponents, Swanger has yet to show any solid plan or actual numbers that might indicate that municipal consolidation would deliver any tax relief, help restore our downtowns, or revive our economy.  The small scale consolidation plans that I have seen that do work, fall apart once you take out the financial handouts from NY State which is our tax money that is apparently being held in reserve for communities who consolidate.  Consolidation proponents have yet to show how their ideas do anything other than replace more accountable, small governments, with less accountable, big government.

I would definitely recommend that readers take a look at Swanger’s take on the role of community colleges in local politics. He presents a lot of ideas that I think are both good and essential. I think that local colleges providing leadership in the area of economic development is a great idea. But what baffles me is how Swanger’s narrative in the local paper over the years seems contradictory to the ideals he espouses in his thesis.

He affirms that small and medium-sized businesses are essential to revitalizing the economy, but promotes “regional cooperation” which primarily benefits big businesses as the “only answer”.

He talks about the importance of livable communities and neighborhoods and the importance of building up a “sense of community” but then proposes that towns, villages and cities are somehow archaic ideas that need to be done away with.

He talks about community planning as a “resurgence of order” but fails to address how reliance on big businesses (like the type that Mike Mullis works with) have disrupted that order over the past decades.

He quotes from “Rise of The Creative Class” by Richard Florida, which focuses on the ability of cities to attract creative professionals as a key economic driver, but on the other hand would discourage local cities like Johnstown, Gloversville and Amsterdam from trying to do this on their own.

Finally, let’s call this article out for what it most likely is – a recommendation against voting for Johnstown mayoral candidate Michael Julius who has been outspokenly resistant to the idea of consolidation between the cities of Johnstown and Gloversville.

And that’s kinda funny because in my view Johnstown is one of the best examples in the Fulton/Montgomery area of the type of livable community that Swanger claims to be in favor of. Is it any wonder that city residents and leaders might want to preserve that?

Voters in the Village of Corinth voted 338-209 last Tuesday against dissolving the village and being absorbed by the town. Doing some reading on the subject, I’ve found some very interesting points to share which should help us better understand the complexity of the dissolution/consolidation process and how it could possibly play out in our own region.

Studies of dissolution options showed that while village residents may have realized an annual tax savings of between $145 to $242 (per $100,000 assessed value), town residents could have seen anywhere from a $48 decrease to a $137 increase. The amount of savings depended on whether a resident utilized municipal sewer and water services, and also on the availability of funds from NY State’s Aid and Incentives to Municipalities (AIM) program. AIM was designed to help communities who decide to dissolve/consolidate with additional funding. However it seems that the actual availability of these funds was so questionable, that scenarios with and without this funding had to be considered.

A key issue in this situation was whether Epcor Power LP, which is part of a large transnational corporation and operates the Curtis-Palmer Hydro plant, would discontinue certain funding that they had been providing for the village or possibly challenge their tax assessment. It appears that this was a serious concern, based on past attempts by the company and the failure of Epcor to assure the panel that it would not seek to decrease their funding. The possibility was deemed great enough to include the scenario in the study (although the language in the study seems to downplay the risk), which showed that village residents could see an annual $445  increase in taxes (per $100,000 assessed value) if Epcor was successful in reducing their funding after the dissolution.

Given all these factors, the village panel charged with studying the idea actually recommended against dissolution  in November 2010. Village officials, including the mayor, also recommended against dissolution. Nevertheless, village officials were not opposed to holding a referendum on the proposal, but they also indicated they didn’t want to rush to a vote either. However, it appears that a well-organized citizen’s group gained the necessary number of signatures to petition for a vote in January anyway.

It’s interesting to note here, that there are two types of actions that citizens can petition for – dissolution or consolidation. Since the citizen’s group petitioned for dissolution of the village, only the village was required to vote, even though it was clear that the town would be affected considerably by this action. If the referendum had passed, the town would have been forced to accept a de-facto consolidation.

So one has to wonder, what was driving this “citizen’s group” to push through this referendum given the very real possibility that dissolution would have raised taxes for both village and town residents, and the very real possibility that the greatest tax savings could end up going to a large transnational corporation?

The idea for the City of Amsterdam to merge with other localities to provide police and fire protection, maintenance and other services has been increasingly talked about in the local media, blogsphere and among local politicians this election season. The further goal of completely disbanding the city to be part of a wider, single government encompassing all of Fulton and Montgomery County, is also one that is increasingly being alluded to.

The promise of consolidation seems attractive – more efficient services with lower cost which means lower taxes. What concerns me greatly, however, is the shocking lack of any specific evidence as to whether consolidation will actually achieve this or not. The biggest cheerleader of consolidation, the Amsterdam Recorder, under the direction of publisher Kevin McClary, has put out editorial after editorial supporting the idea with little more than anecdotes and vague generalizations. The conversation on the subject is startlingly lacking in supporting details, which should raise a red flag for all of us.

Looking for some objective analysis on the concept of city/county consolidation led me to discover a fascinating paper written by by H.V. Savitch and Ronald K. Vogel from the University of  Louisville about the 2003 consolidation of the city of Louisville and Jefferson County, Kentucky. This paper is challenging to read, however I would urge anyone seriously concerned about the issue to take the time to look at it. The study describes and analyzes the events and circumstances that led to the merger and takes a critical look at the results. I found a remarkable similarity between the story of this merger and what is currently happening in our area.  The following summarizes the main points of the paper.

Louisville suffered from problems similar to ours
According to the study, the idea to merge the city of Louisville and Jefferson County originated from the same problems that many cities (including Amsterdam,NY) face: declining industrial base, stagnant population growth, increasing poverty and competition between the city and other localities for tax revenues. The first attempt at merging came in 1982 and was narrowly voted down in a public referendum, only to be revived again in the 1990’s.

The consolidation push was spearheaded by big businesses and the local media

“Business elites and the newspaper continued to focus on government organization as a major impediment to Louisville’s future health…A substantial network of organizations and local personalities took up the issue. The local chamber of commerce…took the lead working with business leaders and donors. These included the city’s largest corporations…”

Costs saving studies were completed, showed no benefit, but the results were ignored
In order to answer calls for substantiation, consolidation proponents asked local accounting firms to conduct an analysis.

“The firms produced a six-page financial analysis that covered eight functions representing just 38% of the city-county budgets…Excluded from the analysis were nine other services like police and fire. The analysis found no cost savings; nor could it identify any substantial duplication of services. The most the analysis could say about this limited number of functions was that ‘no major additional costs or cost savings’ could be found by merging…The firms admitted that is was ‘impossible to accurately predict where these benefits might arise’. Searching for a ray of light, the firms speculated that a merged government would somehow find benefits.

Studies of previous city/county mergers showed increase in costs and taxes, but were also ignored

“One study by Edwin Benton and Darwin Gamble (1984) compared merged Jacksonville with unmerged Tampa [Florida]. The authors state ‘These findings demonstrate that city/county consolidation has produced no measurable impact on taxing and spending policies of the consolidated government…In fact, both taxes and expenditures increase as a result of consolidation’.

Similar results are cited from a study of consolidation in the Miami, FL area.

Studies showed that economic development was not related to government reorganization

“Jared Carr and Richard Feiock (1999) find no relationship between economic development and consolidated governments. Their controlled study of 18 consolidated city-counties examined “annual growth in manufacturing, retail, and service establishments” before and after consolidation. These researches found that economic growth was a function of broader economic trends and not government reorganization…. John Blair and Zhongcai Zhang (1994) take a different tack demonstrating that local economic development depends on state prosperity. For them, states rather than metropolitan regions constitute the critical variable” 

The local paper played an important part in the push for the consolidation

“…the city’s newspaper…the Courier-Journal, was central to merger’s success…As the area’s only at-large newspaper, it is the sole source of information on local affairs. The Courier stands as a megaphone for Louisville, and it not only conveys the news but also construes and shapes it. The Courier spared no effort in promoting merger. It’s editorials writers personally attacked anyone who opposed merger, accusing officeholders of being ‘fear mongers’ who engaged in ‘obstruction’…Editorials sometimes devoted whole columns to individual opponents, accusing them of …selfishly defending the ‘status quo’.”

The city never got its own vote
The consolidation plan was fast-tracked through the Kentucky state legislature early in the year and defined only one referendum, to be voted on by the entire region being considered for consolidation. In other words, the citizens of the city of Louisville did not get to determine for themselves whether they wanted to consolidate or not, rather it was decided by the entire region as a whole.  The referendum passed later in the year and took effect in 2003. This merger was actually the first successful merger between a major city and a county in 30 years.

The end result of the merger was more power in fewer hands
The merger between Jefferson County and the city of Louisville created a single government that commanded a budget and workforce that was many times larger than what had existed before. The paper concludes:

“The irony of this realignment is that it has diluted the city’s core constituency and weakened it’s ability to defend itself…Consolidation was used to lodge a great deal of power in a “strong mayor”, making it more difficult for poorly  financed candidates to run for that office.

After examining new political institutions and the local newspaper’s interaction with the merger campaign, we find that consolidation is better explained by a logic of opportunity – one that emphasizes political advantage, individual fortunes, and pressure politics rather than policy considerations. The major consequence of city-county consolidation in Louisville is likely to be a more internally cohesive regime, coupled to weakened city neighborhoods that are less able to influence the development agenda and more rather than less urban sprawl.”

 So what does this mean for Amsterdam?

Let me be clear, I’m not saying we can look at the consolidation in Louisville as an exact parallel to our own situation.  I don’t want to dismiss the concept of consolidation based solely on what happened in other regions. Missing from this paper is a followup analysis on the actual effects of the merger on tax levies (however I believe the citations of studies on other previous mergers are telling.)   I think there are enough striking similarities here that should motivate all of us to take a closer look at the process going forward. Here’s what I think we should look for:

  • We should take a closer look at which politicians, organizations or corporations are leading the charge for consolidation, what the connections are between them and what they have to gain.
  • We should take a closer look at Recorder publisher Kevin McClary (who is a board member of the Montgomery County Chamber of Commerce) and his relationships to the larger corporations in the area
  • We should expect the Recorder to continue it’s increasingly bold stance on city-county consolidation, continuing to provide only ideological and anecdotal arguments rather than hard evidence of real cost savings for tax payers. Look for continued patronizing characterization of opponents of consolidation as “fearful”.
  • We should take into account the pro-consolidation bias in the Recorder’s endorsements for the upcoming election
  • We should demand that legitimate studies be done before any consolidation plans are put up for a vote. We should reject any plan that cannot be shown to have significant cost savings.  Pay close attention to the results of the upcoming study on consolidating highway services to be conducted by the Montgomery County Business Development Center 
  • Watch for a fast-tracked, under-the-radar initiative to get a referendum on consolidation approved by the state legislature. Much of the ideology for consolidation comes from NY Governor Andrew Cuomo and there appears to be widespread, bi-partisan support among state legislators for the concept.

 Thoughts, impressions, arguments and refutations are welcome in the comments section!

The latest editorial from the Recorder offered a gem of a paragraph that begs for some additional scrutiny.

The 2 percent tax cap under which Gov. Andrew Cuomo has snugly tucked New York’s municipalities — including the most flailing and failing — is an urging toward merging. Eliminating duplication and layers of government, forcing small school districts to join forces with neighboring rivals and small counties to do likewise, has long been a song and dance performed in this very space. For the most part, it’s been a solo act. With a deafening echo. And crickets.

No doubt, Gov. Cuomo has always been an advocate for consolidation. Looking for some additional background on the subject, I found this website that was created back when Cuomo was Attorney General. Reading through this site, one can clearly see where the inspiration for the narrative put forth by local consolidation proponents comes from.

Now the intent of the “Empowerment Act” that Cuomo spearheaded was to make it easier for local governments who wanted to consolidate to do so. That by itself sounds fine to me. But the Recorder, however, suggests that Cuomo’s intent with the 2 percent tax cap was to purposefully force local governments into financial crises that would somehow push them in the direction of consolidation. I think that may be a stretch. But the Recorder goes further to advocate forcing school districts and counties to consolidate. This is blatantly un-democratic and quite frankly, a disturbing sentiment that should concern anyone who values a government “of the people, by the people, and for the people.”

What further concerns me is as I read through this site is that the narrative exhibits the same ideology based arguments as put forth in the Recorder, and has a similar lack of any hard numbers or credible proof that consolidation results in lower taxes. It seems to me that if the intent behind consolidation was purely to save taxpayers money, then the most convincing arguments would include facts and figures which would show the potential savings. But none seem to exist, and I think we have to wonder why!

Instead we have a long list of quotes from dozens of politicians, both Democrats and Republicans, jumping onboard the bandwagon repeating the same thing over and over again, that inefficiencies and duplication of services within the local government are the reason our taxes are so high. There are pictures of multiple tax bills and graphs showing how NY state taxes are the highest in the nation. But as far as actual proof – examples of where there is duplication of services or examples of how a given consolidated region would save the taxpayers money – there is nothing.

There’s been plenty of online discussion about the issue of consolidation. But whenever anyone has asked for some actual numbers, we hear nothing but crickets!

The thing is, though – I am absolutely sure that cost-saving opportunities are out there. They just have to be researched by our county and local governments. Do the homework and show the math that proves the idea will save money, and chances are there will be widespread support for the idea.

How about we start with looking at areas where we already know that larger numbers gets us better prices? How about a regional fuel purchasing partnership (as suggested in Mayor Thane’s platform), that provides fuel for all the service trucks in the various localities at a cheaper rate? Or how about creating a health insurance partnership that would provide lower cost health insurance to all municipal employees in a given region?

Or what about Medicaid? How about we start looking at cooperating with other counties to lobby for Medicaid reform? Medicaid is by far the largest item in the Montgomery County budget and probably is in other counties. Even a modest 10% to 20% reduction in Medicaid costs would save us many millions of dollars.

These are ideas that may actually work. But if “crickets” is all we continue to hear when we ask consolidation proponents to qualify their ideas with actual numbers that we can hold them accountable with, then don’t be surprised if “crickets” is all you get back!

Well I figured it was about time for the Recorder to write yet another editorial singing the praises of consolidation. This time the idea is to consolidate the Fulton and Montgomery County Chambers of Commerce. It’s worth noting here that Recorder Publisher Kevin McClary is a member the Montgomery County Chamber Board of Directors.

I found this editorial interesting because it indicates to me that the “vision for consolidation”, of which the Recorder is the primary evangelist of, clearly extends further than just Amsterdam/Montgomery County, encompassing all of Fulton and Montgomery Counties. The Chambers are private organizations but their memberships include almost all the major industries in the region. I believe a merger would be a major step toward unifying the business cultures of the two counties, which I suspect would lay a groundwork for further regional consolidation. Given the Recorder’s consistent and long-term advocacy of the consolidation concept, it’s hard not to see this single idea as part of a wider strategy.

Of course the supporting arguments for the merger idea are vague, which is par for the course with these types of editorials. The Recorder’s argument seems to be hinged on the premise “Pooling resources whenever possible is often a good idea; today, it is most often a necessity.” This sounds “truthy” at first, but really says nothing about this specific situation. Are the two Chambers struggling financially? Is a merger necessary for them to survive? Who knows?

Outside of the survivability issue, the specific question that I believe needs to be answered in this case is whether a combined Chamber will be more effective at supporting its members, promoting tourism for the area, and marketing the area to new businesses, than the two Chambers separately. There needs to be solid evidence that a significant advantage can be achieved, otherwise one would have to question the need to do this. I hope that Chamber members of both organizations will keep an eye on the progress of this idea, ask questions, and make sure that their opinions are heard.

Awkward Clarification

Posted: September 6, 2011 in Consolidation, Uncategorized

My previous blog post entitled “A Proposal for the Amsterdam Recorder” was, in fact, a satire based on two recent opinion pieces that appeared in the Recorder in regards to consolidation and shared services. I’m not sure how well this idea worked, probably because I did not get completely  over-the-top ridiculous with my suggestions. In fact,  on re-reading what I wrote, some of the ideas actually do make sense! I was amused to learn that the Leader Herald actually did print the Recorder’s papers when their power was knocked out last week. And as Diane commented, I too would be glad to get both paper’s content in the same place.  But if you found my reasoning a bit vague and somewhat patronizing, well, that was the point : )

It’s no secret that local papers everywhere are struggling. The number of people who choose to get their news on “paper” is declining daily.  Back in the 18th and 19th centuries, when newspapers started to become popular, news travelled  slow and therefore, we created newspaper companies  that were small and that provided for the local people’s needs. Some people actually lived their entire lives only getting their news from the local paper.  But today we have radio, television and the internet to get our news. Today’s world is not the same as it was in 1930. Newspapers like the Amsterdam Recorder need to start thinking outside their territorial boundaries if they are to survive.

Inspired by the Amsterdam Recorder’s steadfast advocacy for consolidation and regional collaboration, I believe the best thing for them is to consolidate with The Leader Herald. Now I don’t have any real facts to show that this would be the best thing for them economically or if this would actually serve the needs of the people of Fulton and Montgomery County any better, but to me it just seems like the right thing to do.

Actually, it’s a little ridiculous that this paper has to be reminded of these realities, especially when our neighbor Schenectady County, with a population roughly the same as Fulton and Montgomery combined, has only one paper, the Schenectady Gazette. Now if one paper can cover that many people, why do we need two? I am sure that there are many areas where these papers are duplicating services like advertising, billing, and circulation. I bet that both these paper’s printing presses are being underutilized too. Why not just use one and save money? And I am sure that the combined reporting staff can be downsized and still cover twice the area they once did at the same salaries. I mean it just makes sense, right?

The concept of the neighborhood paper, while a nice one, simply doesn’t work. Competition between papers only hinders progress. The Amsterdam Recorder should adopt a collaborative approach which everyone will benefit from. So what do you say, editors?

“Consolidation” and “shared services” – seem to be two buzzwords that are being used a lot these days. All three mayoral candidates have expressed (in varying degrees of detail), their support for working with other municipalities to cut costs of services. The idea of  consolidating local governments gets mentioned a lot by some county supervisors, numerous Recorder editorials, and most recently is mentioned (somewhat obliquely) in an opinion piece in Monday’s Recorder by Fulton Montgomery Community College President Dustin Swanger, entitled “Plan a collaboration for a brighter future“.

I’ve always been supportive of the idea of shared services. If, for instance, it would cost less to pay the county to plow our roads than to maintain our own fleet, then by all means, let’s do it. So while I think that shared services and even consolidation in some cases could be good ideas, I’m starting to get a little concerned about the way this is being sold. It’s almost as if we are being asked to buy in to these ideas by faith, rather than by facts.

Swanger’s article, while well written and optimistic, contains some points which echo other ideas on consolidation and shared services that I’ve heard, but just don’t sit well with me. I’ll explain why.

In regards to regional economic growth, he gives the following chastisement:

“We must reduce barriers to development. We cannot afford to withhold water or sewer services. We cannot worry about which town or city will gain the most from development.”

Now Swanger is most likely talking about a problem that developed between the cities of Johnstown and Gloversville last year related to the development of a Walmart Supercenter. Making a long story short, Johnstown and Gloversville built a waste treatment plant together many years ago, and had an agreement that if either city wanted to extend their sewer lines past their boundaries, the other city had to approve it.  The Town of Johnstown needed a sewer line from Gloversville to move forward with the Walmart Supercenter project. The City of Johnstown, for whatever reason, didn’t want to go along. So Gloversville annexed that part of the land from the town and worked out a revenue sharing deal.  You can find articles with more details on the situation here.

So everything actually worked out just fine, the project recently broke ground and everyone (except maybe the City of Johnstown) is happy. To me, this shows that when a clear economic opportunity presents itself, localities will bend over backwards to cooperate and get things done. The City of Johnstown probably acted the way they did because they weren’t getting anything out of the deal or thought the supercenter might harm them economically.

This situation was certainly difficult and could have gone a lot smoother if there had been a more flexible agreement between the two cities. But how common is this type of arrangement where one city has actual veto power over another? Swanger goes on to say,

“Our growth cannot be constrained by what are, effectively, artificial boundaries. If we cannot collaborate across these manmade boundaries, perhaps it is time to remove them.”

I’m not 100% sure if he is literally talking about municipal boundaries here, or if the word “boundaries” is referring to certain laws that may inhibit cooperation.  But my sense is that he is indeed, talking about the latter.  So because of one special case where localities didn’t fully cooperate, this is grounds for abolishing a local government? That just seems a little extreme to me.

I also take exception to describing the current local boundaries as “artificial”. This term would better describe Africa or the Middle East, where colonial powers drew national boundaries, disregarding the traditional boundaries of various tribes or ethnic groups. To me, our current municipal boundaries are “organic”, accurately reflecting the communities that people built throughout our history. Now Swanger argues earlier in his article that these boundaries are less important because of our increased mobility, and I would agree with that. However, I would say that our local boundaries are no more artificial or man-made than our county, state or national borders.

What I see happening is that larger companies are not willing to build or expand inside city boundaries. Either there isn’t enough space or the taxes are too high. So they look to the towns for large spaces to develop on. But unfortunately they don’t have the water or sewer systems to accommodate them. So, the towns look to the cities, who have invested extensively in these systems, to extend out their lines.

So in order for these large projects to happen, there certainly has to be cooperation between the cities and towns. I tend to wonder if the idea of consolidation is simply an idea that gets mentioned in order to keep cities on their toes  (ie share your water and sewer or else!), or if this is indeed a serious, credible policy being pursued on the county level.

 Finally, Swanger offers this idea,

“No company thinks ‘I need to locate my business in Amsterdam,Johnstown, or Gloversville.’ They think, ‘In what region of the country will my business gain the best advantage?’”

Well, I can certainly believe this when it comes to large companies who can afford to locate anywhere they want. But what about, for instance, a small business located in Albany with roots in the region, but is struggling financially and needs to cut costs?  Why wouldn’t they consider moving to Amsterdam to take advantage of the low-cost commercial space that is available? With the proper marketing, I think that yes, some businesses might actually think they need to locate their business in Amsterdam, Johnstown or Gloversville. Statements like this, along with the numerous editorials from the Recorder admonishing the Mayor for pursuing city marketing, make me really wonder if this opposition exists simply because a successful growing economy in Amsterdam would be at odds with the vision for consolidation.

As the discussions on shared services and consolidation goes on, I think it is vitally important for citizens to ask the hard questions of our elected officials, both in the city and county government. We need to make sure that any decision to consolidate services or governments is based on facts that demonstrate true cost reduction and serve the best interests of everyone.