One unit many more questions

February 25, 2011
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“The Metropolitan Government of the City of Grand Rapids and Kent County” is a potential name a private sector group has chosen to represent its future vision of what governance should look like here.

“We believe it’s time to update our governmental structure,” said Nyal Deems, a real estate attorney with Varnum Law and a spokesman for the One Kent Coalition, to county commissioners last week. “Collaboration and consolidation just make sense, and the private sector should take a more active role.”

Deems, a former East Grand Rapids mayor who is generally credited with founding the Grand Valley Metro Council, said a consolidated city and county government would provide more efficiencies and cost savings than the current scheme. Merging the two, he said, would also lead to more economic growth, as the city could be marketed as having a population of 605,000 and that number would vault Grand Rapids from being the 89th largest metro area in the country to the 25th biggest.

“We believe this would enhance the economic structure,” he said.

But Deems didn’t offer a financial projection on how much the savings for the public sector would be, and he didn’t indicate how large the economic gain would be from merging the two governments. He said the One Kent Coalition, which began promoting this issue in the fall of 2009, has about 22 members, all from the private sector. He added that no elected public officials have been involved with the organization and that he would provide the county with the membership list.

“It was a group that just came together to say we need to do something, and it just evolved. No one on it sits on an elected board. We’re just starting to reach that level,” said Deems, who joined the coalition last August.

Deems said the coalition has begun to draft legislation it plans to present to state lawmakers for approval this year. The Legislature can approve a law that creates a new metropolitan governing body via Section 27 of Article VII of the Michigan Constitution. Deems said once the state law is in place, the coalition plans to get it before county and city voters next year. He added that the ballot measure needs to be put on a fast track.

Commissioner Jim Saalfeld said the issue needs to be explored further and he heard from others that the drafting process was underway. “I think it’s critical that we know what’s going on before we spend millions of dollars. I’m concerned that this legislation is being pushed without consulting us.”

“I would be very careful in fast-tracking this legislation. There are 150 unintended consequences that could come out of this,” said Commissioner Roger Morgan.

County Corporate Counsel Daniel Ophoff said he couldn’t imagine that a merger measure could go forward without the county’s approval. He told the Business Journal that Grand Rapids would have to revoke its charter and also approve a ballot proposal.

Commissioner Stan Ponstein asked Deems where the money would come from to pay for merging the two governments. “Potentially, we don’t know,” said Deems. He said the coalition has looked to the Legislature and governor’s office for possible funding, and he noted that some start-up money could come from the $200 million incentive fund that Gov. Rick Snyder has set up to reward collaborative efforts done by municipalities.

“I think the plan is ill advised. You have to have the other five cities in this for it to be efficient,” said Ponstein, who served on the Grandville City Council. Deems said other municipalities could join the new government if they chose. Commissioner Tom Antor and Morgan expressed concerns about the fate of the county’s 21 townships if the governance system changes. “Local township governance is some of the best governance we have,” said Antor.

Commission Chairwoman Sandi Frost Parrish said it was good to hear some of the background regarding the coalition’s movement because there have been questions about what work has been done, who is involved and what is the vision. “So it was good to hear from that group exactly what they’re thinking and what their vision for the county is,” she said.

A consolidated government would mean the city and the county could become responsible for some portion of each other’s future financial liabilities, while each could keep its respective tax revenues. Because the county has larger revenue reserves than the city, the Business Journal asked Parrish if she felt that her board would be willing to pay a portion of the city’s retiree health insurance, pensions and outstanding bond debt, while the county has to cover its pensions and debt.

“I think what the commissioners will be most concerned about is maintaining our Triple-A bond rating, because the Triple-A bond rating impacts and benefits everyone in the county — not just the county and not just the city as governments, but all of our townships that are able to use our full faith and credit,” she said. “So I’m certain, in that situation, the overall financial picture will need to be strong for the commissioners to support it.”

Deems pointed to two cities that have been involved in consolidation efforts — Indianapolis and Nashville — and said both have benefited economically from mergers. He said prior to the change, Indianapolis just had an annual car race and Nashville just had the Grand Ole Opry, but now both cities are able to successfully compete on a global basis.

Deems said the city has seen a lot of good economic activity the past few years, but it isn’t enough. “We struggle to put ourselves out there in a global economy,” he said. “The county and city ought to function as one government.”

Former Grand Rapids City Manager Kurt Kimball, who is part of the coalition, told the Business Journal that the group is likely to meet with some city officials within the next few weeks.

As for the county’s next step, Parrish said she plans to hold a work session on this issue with the full board in either March or April. “I think what’s next for the county is for the commissioners to absorb all of the information they heard, gather their thoughts, and provide some questions back to the group in order to have a future dialogue that is productive,” she said.

“From our perspective, because we have so many new commissioners since 2008, not just since 2010, we have a lot of commissioners that don’t necessarily know what work has been done previously or how the conversations have gone previously. It occurs to me that everyone needs to have the same information with regard to the history on this issue. They also need to be aware of studies of some of the same material that this group is reading. We need to be reading some of the same material.”

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