William B. Beach. Elected Officials Academy Advanced Weekender

Transcription

1 Regional Cooperation William B. Beach Michigan Municipal League Elected Officials Academy Advanced Weekender February 18 19, 2011

2 What do we think about when we talk about regional cooperation? 1

3 Regional Authorities? 2

4 Number of Units of Local Government in Ten Standard Metropolitan Areas in Michigan Source: U.S. Bureau of the Census, 1957 Census of Governments Local Government in Standard Metropolitan Areas and Government in Michigan. 3

5 Transportation Authorities South East Michigan Transit Authority (SEMTA) Southern Mobility Authority for Regional Transportation (SMART) Detroit Regional Transportation Authority (DARTA) Ann Arbor Transit Authority (AATA) Capital Area Transportation Authority (CATA) Interurban Transit Partnership (The Rapid) Metropolitan Transportation Authorities Act 1967 PA 204, MCL Public Transportation Authority Act 1986 PA 196, MCL 124,451 et seq. 4

6 Airport Authorities Detroit Metropolitan Wayne County Airport Authority West Michigan Airport Authority (Tulip City Airport) Bishop International Airport Authority Capital Region Airport Authority Public Airport Authority Act 1945 PA 327 and 2002 PA 90 MCL

7 Water and Sewer Authorities Livingston County Water Authority (Brighton, Green Oak Township, Hamburg Township) Mancelona Area Water & Sewer Authority Multi-Lakes Water & Sewer Authority East Lansing Meridian Water & Sewer Authority Detroit Water and Sewer Authority??? MCL et seq. MCL et seq. 6

8 Special Interest Authorities 7

9 West Michigan Regional Medical Control Consortium Cobo Hall Regional Authority Huron Shores Regional Utility Authority Four County Register of Deeds Consortium (Wayne, Oakland, Monroe & Macomb) 8

10 Metropolitan Government Councils 9

11 Metropolitan Councils Act (Act 292 PA 1989) Allowed a combination of 2 or more local governmental units in a metropolitan area to form a metropolitan area council to: Propose standards, model ordinances to regulate the use & development of land and water To pa plan, promote ote & finance, issue bonds, to acquire, own public improvements and services and issue bonds to finance same MCL

12 Metropolitan Councils Act (Power s cont d) Water & sewer public improvements Solid waste collection & disposal Parks, museums, Zoos and recreational facilities Special use facilities Ground & air transportation Economic development Higher education MCL

13 Boston: New Orleans: History of Metropolitan Areas Consolidated City & County (19 th Century) Consolidated City & Parish Governments (19 th Century) New York: Consolidated its Burroughs (1898) Toronto: Metropolitan Toronto Act (April 2, 1953) coordinated d services across municipal i boundaries until January 1, 1998, when the amalgamated City of Toronto was created January 1, 1998 Indianapolis: Consolidated county & surrounding cities

14 A Metropolitan Council is formed through agreement by participating communities, creating a statutory entity with the filing of Articles of Incorporation, election of officers, hiring of staff, etc. 13

15 In order to eliminate the duplication of services and resolve conflicting ordinances, Grand Rapids, with 1 county, 8 cities and 5 townships, formed a Metropolitan Council in

16 Inter, Local Government Cooperative Authorities 15

17 Recreational Authorities Downtown Development Authorities Joint Building Authorities Joint fire Authorities Joint Dispatch Authorities Joint Cable TV Authorities 16

18 Reasons for Considering Cooperation 17

19 Consolidation of governmental services through h intergovernmental t collaboration can reduce the cost of government by capitalizing i on economies of scale. Citizens Research Council Nov Report

20 Do we need to reduce costs? 19

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28 4 th Consecutive Year of Negative SEV Monroe County Washtenaw County Commercial % Commercial -4.12% Industrial Industrial Residential Residential Development

29 CITY OF MILAN Since 2007, City of Milan SEV has fallen from $287,493,303 to $191,689,846, a reduction of 33.3% 3% 28

30 Taxable Revenues will follow Milan experienced decrease of 0.62% decrease of 17.62% decrease of 13.5% 29

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32 BYE-BYE Revenue Sharing Counties are scheduled to come back into the formula that will decrease the share for everyone. Sales tax collections which fund revenue sharing has continued to decrease. Statutory portion of revenue sharing may be eliminated altogether or be conditional upon participation in consolidation, cost reduction or some state program. 31

33 Tax Tribunal cases are increasing? personal property taxes being eliminated? Health care benefits have purported to increase more than 20% over last year. Pension Liability is scary because: Mass retirements have occurred to avoid loss of health benefits or layoffs. Stock market crash reduced OPED funds. 32

34 Headlee Train Wreck Municipal i Revenues will be slow to recover because taxable values will not be able to rise as quickly as property values increase, if and when the real estate market starts t to turn around. 33

35 WHAT CHOICES ARE AVAILABLE TO MEET THIS FISCAL CHALLENGE? 34

36 Increase taxes Reduction in services Payroll reduction Pension and health benefit reductions Layoff of staff or Find alternative methods of providing services at current levels for less money 35

37 ALTERNATIVE METHODS 1. Joint Purchasing Wholesale and retail providers of governmental supplies often are willing to reduce the unit price as the quantity purchased increases. Collaborating with other government units creates a larger purchase pool and results in lower prices. 36

38 Joint Purchasing (cont d) Motor Fuel Motor Vehicles Computers Paper Office Supplies Cleaning Supplies Salt Uniforms Guns 37

39 2. Cooperation with Neighboring Communities (Horizontal) Two or more local governments combine to provide a governmental service 38

40 This Types of Cooperation Water Authorities Sewer Authorities Land Fill Authorities Librariesi Fire Authorities District Court Services Dispatch EMS Mass Transit Shared training facilities Joint Planning Commissions 39

41 3. Collaboration with County or State (Vertical) Local governments collaborate with county or state for provision of services by sharing cost of services, contracting to have services provided by county governments or the state or simply having them assume the responsibility for performance of special functions. 40

42 Types of Vertical Collaboration at o Sheriff patrol Storm water drains Assessing Planning 911 Dispatch Parks Roads 41

43 4. Indirect Collaboration Local governments collaborate with other units of government to contract with private entities to provide service. 42

44 Types of Indirect Collaboration at o Crime labs Jails DPW services Garbage collection Gas Electric Cable TV Internet services Museums & art galleries Fleet service Cemetery Service Engineering Planning Sewer treatment Senior services/transportation 43

45 Regional or cooperation between local units of government is not a new idea! 44

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47 Problems Raised During Negotiation of Cooperative Agreements with Neighbors Old grudges Lack of trust Lack of sophistication Reduced autonomy Labor agreements Reshuffle of staff Complex legal issues Imbalance of benefits and costs 46

48 Example of Cooperative Action Village of Beverly Hills Library: Village participates with the Baldwin Library to provide services to Village residents by cooperative agreement based on use. (City of Rockwood does same with Flat Rock). Public Works: Village has completely privatized operational services provided by Public Service Department. Maintenance and repair of water and sewer infrastructure is provided by Oakland County Water Resources Commission (OWRC). 47

49 Building Department Inspections: Private Contractors handle all site plan review, construction plan review and inspection services. Assessing Services: These services are provided d through h the Township who contracts with Oakland County. 48

50 Example - continued Drinking Water: The Village is an original member of the South Oakland County Water Authority (SOCWA), which procures water from Detroit Water and Sewage Department. SOCWA owns, operates and maintains a significant portion of water system infrastructure. Refuse Disposal and Recycling: County Resource Recovery Authority (SOCRRA) and gets competitive garbage collection and disposal rates through sheer volume. 49

51 Sewage Services: The Village is a participant in the Evergreen Farmington Sewage Disposal System (EFSDS) which is operated by OWRC, which performs maintenance and repair of sewer infrastructure. Elections: Township holds all of Village elections. Professional Services: All professional services are contracted directly with private sources. Code Enforcement: The Village has a part time code enforcement officer. The Village contracts out his services to Village of Bingham Farms on an as needed basis. (City of Rockwood does same with Brownstown). Prison Housing: Village contracts with City of Lathrup Village and Village of Franklin to house and process prisoners for these communities. Cable Service: Village participates with Birmingham, Bingham Farms and Franklin on the Birmingham Area Cable Board to pool user base to be able to get better service at cheaper prices. 50

52 Seniors: Village participates in Birmingham Area Senior Citizens Council to pool lits requirement of services and providers together th with neighboring i communities. Police and Fire: the Village has full time police and fire services. They are looking at transforming into a Public Safety Department. t They have even considered future consolidation and cooperation above and beyond mutual aid to a regional Public Safety Service. Dispatch: Village provides its own. Alternatives looked at are permitting i County to perform dispatch or combining such services with neighboring communities. Southfield provides coordinated dispatch services for several neighboring communities. Tax collection: The Township collects taxes for school and county. Village collects its own. They have thought about consolidating services. 51

53 Building Department Services: What is left is contracted out similar to what Troy has done. Utility Billings: Village reads meters remotely. SOCWA has opened talks about combining forces to do this either by them or by private contract. 52

54 How To Start the Process of Regional or Local Cooperation 53

55 Trust is critical Everyone has to share the pain as well as the benefits Egos have to be checked at the door You only have to start with one partner If successful, engage g the media. Be totally transparent Patience is a virtue 54

56 Step # 1. Form a committee Step # 2. Identify Services Step # 3. The Committee should determine if neighboring local governments or the county provides or is thinking of providing similar services. Capital intensive services are generally more likely to be shared with a contiguous community. Labor intensive services are generally not the same. They are more difficult to join together. Technical services can be provided without consideration of boundaries. 55

57 Step # 3. Identify potential partners. This is always a job for local leaders. If the neighboring local government or county does not provide a function or service, they should be approached and given the opportunity to consider an interlocal agreement to provide service. If the answer is No, then the search should switch to private sector providers. If neither avenue is not reasonably cost effective, you continue to provide function yourself. 56

58 Example of Start Up Committee Citizen Budget and Finance Committee comprised of accountants, lawyers, business owners and residents met with City Manager, Public Safety Director, Public Works and Building Department Director and Treasurer. Identified all of functions and services of City. 57

59 Asked if function or service: (a) was needed at current or reduced level or needed at all. (b) could function or service be consolidated and performed by other City staff. (c) could it be privatized. (d) Could it be consolidated with neighboring community. 58

60 Committee took these questions and created a questionnaire which was sent out to the City residents for their input into the process. Committee took the responses and together with their own findings, made a report to the City with option it had available to it and the recommendation of the Committee and the citizens. 59

61 CONSIDERATIONS TO TAKE INTO ACCOUNT 60

62 Financial Considerations In almost every situation, there is a financial benefit in consolidation of services, but there is also a sharing of costs. A formula has to be devised to compensate communities for prior investments in services. Pay for administrative services. How do you share savings? 61

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66 IS THE CONSOLIDATION OF LOCAL GOVERNMENTS AN OPTION? 65

67 Consolidation of 2 or more villages, cities or townships is governed by the Home Rule Cities Act through a petition, and referendum process before the State Boundary Commission 66

68 Legal Barriers to Intergovernmental Cooperation Agreements The current statutory framework constrains local units of government from fully capitalizing on the cost savings resulting from intergovernmental cooperation. 67

69 Act 7 Urban Cooperation Act ( 5) Act 8 Governmental Transfers of Functions and Responsibilities ( 8) 1. The transferred employees become subject to the terms of the collective bargaining agreements of the local government their services are being transferred to, including retirement benefits from other government. 2. An employee being transferred cannot be placed in a worse position by reason of the transfer with respect to wages, workers compensation, pension, seniority, sick leave, vacation, health insurance or any other benefits. MCL

70 PERA and Act 312 Act 7 and Act 8 are transferring employees and benefits outside of PERA and open up the local governments to unfair labor practices charges of repudiation of collective bargaining agreements through intergovernmental ernmental cooperation agreements. 69

71 Act 57 of 1988 Section 10(3) provides that transferred employees retain the obligation under the labor agreements of the local government they come from since the emergency services are being provided to more than one community. The administration of wages and benefits becomes a nightmare. 70

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77 Authorization for Interlocal Agreements and Intergovernmental Cooperation in Michigan, Report 346, April

78 MTA has a paper p entitled Reforming Michigan s Local Government, January 2010, in which its premises is that consolidating local governments will not save money. Making smaller governments into bigger governments will most certain drive the cost of government up, not down. It works in capital intense services like water and sewer, but those services are paid for by user fees and cost savings will not impact general operating expenses of local governments. 77

79 Thank you for your undivided attention! 78

80 William B. Beach Miller Canfield 150 W. Jefferson, Suite 2500 Detroit, MI Direct: (313) Mobile: (313) Thank you for this opportunity