Budgets not services are consolidation target

July 29, 2011
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(Editor’s note: Second in a two-part series examining One Kent Coalition’s merger proposal for Kent County and Grand Rapids.)

Even though Kent County and the city of Grand Rapids provide different services to their residents, the One Kent Coalition wants to merge both into a unified metropolitan government because their total budgets represent roughly 76 percent of all the public sector’s expenditures in the county.

Excluding the school districts, One Kent said the county, its nine cities and 21 townships spend about $900 million annually, with Kent County and Grand Rapids spending about a combined $682 million each year. The coalition felt merging the two would offer the best opportunities for improvement in services and the greatest savings in reducing duplication of efforts.

“If you dig into the budgets, you find that the city and the county are doing just about everything,” said Nyal Deems, a local attorney at the Varnum law firm and spokesman for One Kent. “That’s a big enough chunk to start off with.”

Public officials have said merging the six core cities would make more sense, as they all offer the same services. But One Kent has countered that the six have a combined budget of $424 million, just $99 million more than the $325 million that Grand Rapids spends each year, and consolidating them wouldn’t offer the same potential for cost savings as combining the county and Grand Rapids.

“That doesn’t do much for you. If you merge the six cities, you merge the budgets of $400 million and that’s not enough,” said Deems, a former mayor of East Grand Rapids.

On top of that, Deems said the county and Grand Rapids perform at least a dozen of the same services. He noted both have clerk, legal and law enforcement offices, court systems, community development and public works departments, along with other similar functions like facilities management.

“That leaves 800 to 900 people doing the same things,” he said.

Deems said One Kent thought about adding the cities of Wyoming and Kentwood to the consolidation effort, but came to the conclusion that their budgets weren’t large enough to make much of a dent in reducing expenditures countywide. The coalition estimated Wyoming’s spending at $31 million per year and Kentwood’s at $16.8 million.

“You don’t have to take away their identities, unless they don’t want their governments anymore,” said Deems.

Deems added that other units will be able to join the metro government if they want or merge some of their services with it.”You don’t need to try to put everybody in the same box at once. They wouldn’t like that,” he said. “We thought (having that option) could work well.”

Should Lansing approve the coalition’s consolidation legislation this fall, One Kent wants the measure on the November 2012 ballot throughout the county. According to data compiled by One Kent, there have been 44 attempts to merge a city with a county in the U.S. since 1957. Of those, voters have approved 19 and rejected 25. Those that were rejected came before voters a total of 49 times. Nashville, Jacksonville, Louisville and Indianapolis are the mergers One Kent has pointed to as successful examples.

The coalition went public with its plan in February when Deems addressed the county commission. The Business Journal asked him to characterize how that effort has gone so far. “I think in terms of talking to the politicians, it’s been a struggle,” he said. He added that he has run into a lot of skepticism, which has drawn a negative reaction from the public sector, even though he said the last four county chairpersons and past two city mayors have said they supported consolidation.

“They all made public speeches about that. They wanted the private sector to get involved with that,” he said. “Instead of feeling that they’re part of the process, they felt left out.”

Deems said One Kent first was attacked because it didn’t offer enough details for merging; then it was criticized for not being open enough. “We really didn’t think we were really doing that,” he said.

Deems said local Democrats claimed One Kent was trying to eliminate elected seats held by their party, while Republicans argued the coalition only wanted to use the county’s reserve funds to rescue the city from its debt and legacy cost.

“I think there is much more of a blend here than is appreciated. We’re trying to create a structure that would create more Democratic seats,” he said, while adding that the coalition has members who traditionally vote for Democrats. “Our thought is to have the city’s seats reflect the city’s boundary.”

One Kent has proposed that a 25-member commission oversee the metro government, which would be led by a chief executive who would have veto power. With the city having about a third of the county’s population, Grand Rapids should end up being represented by seven or eight commissioners.

Deems said One Kent emerged informally in early 2010 after local philanthropist Peter Wege began talking about consolidation. The group then hired a consultant based in Louisville to discuss the issue further, as Louisville merged with Jefferson County in 2000.

After the 2010 election, Deems said the coalition began speaking with legislators and state officials about merging and were told that whatever model they came up with could possibly serve as a template for the rest of Michigan. Deems said newly elected Gov. Rick Snyder and Lt. Gov. Brian Calley told One Kent back then they were interested in what the group was trying to do.

“What this, if it’s successful, would do is make it a metropolitan government and give (the area) much more play (nationwide),” said Deems, who added that making Grand Rapids more well known across the country is the underlying motive fueling the coalition’s push.

As an example, Deems said the head of a local investment group recently told him they were ready to invest but only planned to do so in a Top 50 market and, with a population of 188,000, the city isn’t on that list. Deems said consolidating the city with the county would allow Grand Rapids to be marketed with a population of 602,000, which is the 2010 U.S. Census Bureau count of all residents in the county, and would make the city a more competitive and desirable place for investments and jobs.

“If we’re able to recast ourselves as a metro city with a population of 602,000, we will have more power in the state and on the national front for economic gains. We have a better downtown than Indianapolis or Jacksonville,” said Deems of two cities that have merged with their respective counties.

“The main factor of what we think we can do with this is to make the area the economic engine that drives the state. No one will want to talk about the east side of the state.”

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