Details Will Determine If Mergers Help

December 12, 2004

Will the next round of city-county consolidation proposed by Mayor Bart Peterson fulfill the promise of Uni-Gov, or add to its mixed legacy? Will Indianapolis Works—Peterson’s plan for that consolidation—really generate $35 million in annual budget savings and avoid at least $20 million in additional annual costs?

The answer is a resounding: It all depends!

Maybe Indianapolis Works will work; maybe it won’t. But either way, the devil lies in the details, many of which remain to be determined by Gov.-elect Mitch Daniels and the Indiana General Assembly this winter.

Recent history confirms the potential for solid gains if Indianapolis and Marion County successfully consolidate their police and sheriff’s departments, fold 10 fire departments into one, eliminate dozens of township assessor and trustee positions, and make the mayor a genuine city-county chief executive with full budgetary powers.

In one of the most exhaustive examinations ever, for example, researchers at the University of Georgia determined that operating expenditures by the newly unified Athens, Ga.-Clarke County regional government increased at a rate noticeably slower after consolidation than in three unconsolidated pairs of cities and counties.

More recently, the elimination of some 700 government jobs by the new regional city of Louisville early last year helped the metro city avoid what was looming as a combined $44 million shortfall for the former city and county governments. And no wonder: Instead of two information technology departments, two finance departments and two human resource offices, there is now one of each—and solid gains from erasing redundancy and seizing economies of scale.

Equally encouraging for Indianapolis is the fact that public safety reorganization—central to Indianapolis Works—holds out especially enticing prospects. Evaluations of consolidated police agencies in Pennsylvania in the late 1980s suggest that, at least among relatively small municipalities, regionalizing coverage saved real money as management was thinned and assets were pooled.

These studies concluded that full-time service from consolidated police departments cost on average about 25 percent less overall than that provided by traditional departments. In one case, that of the six-municipality Northern York Regional Police Department, the cost of handling criminal incidents and calls fell to as low as half that in communities going it alone. Even better, the reorganized department was able to do more with less as many municipalities reported getting more complete and timely police coverage than they had before merger.

The implication: Mayor Peterson is absolutely right that widening the reach of city-county consolidation in Indianapolis can lead to smaller, less expensive yet better government.

And yet, will it? Will the next round of unification deliver on its promise? Unfortunately for proponents of consolidation, a look at even these successful precedents for Indianapolis Works gives grounds for caution.

Nothing, it turns out, is automatic with consolidation.

The reason for this was well stated by the authors of the Athens, Ga., study: Nothing intrinsic to the act of consolidation can guarantee efficiency. Instead, like every other government reform, city-county unification offers the opportunity for savings but remains utterly dependent on the specific details of how the consolidation is designed and implemented by policymakers.

In Indianapolis, for instance, the specific details of the original Uni-Gov fusion—which excluded police and fire protection—essentially ensured that the combination would yield few public-finance benefits, as Indiana University political scientist Bill Blomquist has pointed out.

And in the Athens, Ga., case, charter stipulations severely constrained those implementing the consolidation by guaranteeing that no full-time city or county employees would lose their jobs or suffer any reduction in pay or benefits. No wonder the new personnel system actually required a $2 million increase in the personnel-related operating budget.

As to Indianapolis Works, plenty of questions come to mind:

  • Will the inevitable tendency to minimize resistance to restructuring by “leveling up” salaries, for example, of township firefighters joining the new regional department gobble up potential financial savings?

  • Will the elimination of nine township assessors and all but two township trustees in Marion County really stand now that the Indiana Township Association has gone on the warpath?

  • What about the fire departments? Will the new consolidated fire department really be able to save $19 million a year without closing any fire stations or letting go any staff, as Indianapolis Works projects? If not, will the final implementation allow cuts?

In each case, a shortage of details is one problem in evaluating Indianapolis Works, which was developed largely in private. But what makes the package even harder to assess is the simple fact that these and many other questions ultimately are political questions unanswerable by Peterson or anyone else. They are largely subject to the deal-making and interplay of numerous interest groups, Indiana’s new Republican governor and its cantankerous legislature.

In this sense, Peterson and those who want to update Uni-Gov for a new generation face two related challenges.

First, proponents of Indianapolis Works must begin right away to better explain and communicate their promising concepts to both legislators and the public.

And second, they must realize in earnest that the road to high-minded policy reform runs squarely through the tough neighborhood of partisan politics—and proceed accordingly. In fact, if they don’t get what they need at the Statehouse next year, they will need to do what they can on their own, even without the General Assembly’s permission.

But either way, the reality is the same: Innovation will require tough decisions in the face of entrenched interests, and such decisions will ultimately require a well-informed, supportive public.

Get that part right, and with any luck Indianapolis’ continued determination to renew its governance will soon yield reforms that really do deliver on the promise of Uni-Gov.