Parrish Copy Muskegon plan

July 29, 2011
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(Editor’s note: First in a two-part series examining Kent County’s role in One Kent Coalition’s consolidation plan.)

Kent County Chairwoman Sandi Frost Parrish said Muskegon County did it the right way, and that is the way she wants the consolidation process to be done here.

“I hope everybody takes a step back and looks at that,” she told the Business Journal last week. “Let’s all work together with a third party. Let’s do some analysis and see where that goes.”

Parrish was referring to One Kent Coalition’s effort to merge the county and the city of Grand Rapids into a metropolitan government, an endeavor she feels hasn’t been inclusive enough. She cited a story in last week’s Business Journal about how business groups, public officials and nonprofit agencies in Muskegon County got together with an Ann Arbor consulting firm for a year and developed 19 recommendations on how services could be shared by nine municipalities in that county.

“That’s what happens when you work together,” said Parrish. “That is the trajectory that should have happened here. A third party should oversee it. I think what should be the next step for our community is to do what Muskegon did.”

What has happened here, so far, is a study committee of representatives from the city, county and One Kent was created to meet every other week for three months. But when the topic of whether a consolidation was necessary wasn’t allowed to be discussed, the county withdrew from the group. The most recent meeting of that group reportedly drew some city representatives and a single member of the coalition.

Parrish said county commissioners haven’t regretted withdrawing from the group because it became apparent to them after the first few meetings that key questions such as how much is consolidation going to cost and who is going to pay for it weren’t going to be addressed.

“There wasn’t a reason to stay at the table if those questions were not going to be answered,” she said.

Parrish also said that when she appointed county representatives to the study group, she wasn’t told that the only topic open for discussion was which consolidation model should be chosen.

“It wasn’t about which model to follow. It was supposed to be about getting answers to our questions,” she said.

Parrish recently appointed a committee comprised of county commissioners that will be chaired by Commissioner Dan Koorndyk. The panel will try to determine the economics of One Kent’s consolidation plan, and also analyze the merger legislation the coalition has drafted and hopes to submit to the state Legislature in September.

She said she wants the committee to finish its work by the end of the year, at the latest.

“They may have the legislation introduced while we’re still analyzing it,” she said. “We are going to have to analyze this. We will have to go to an outside consultant to do this. This is what I thought was going to happen in the study group.

“We don’t know what the ballot language will be. They said it is ‘enabling legislation,’ but it’s not enabling if it says ‘the county and the city shall merge,’” she added.

If state lawmakers and Gov. Rick Snyder approve the legislation One Kent submits, the coalition wants to have the merger question before voters throughout the county in November 2012. But Parrish has a closer deadline in mind: next April when county officials will head to New York to go before Standard & Poors and Moody’s Investors Service to defend its triple-A bond rating, which the county has held for 13 consecutive years. She said the ratings agencies’ representatives knew of the consolidation plan this past April.

A major concern Parrish and commissioners have about the consolidation — and have had since One Kent publically unveiled its plan in February — is how a merger will affect the county’s top bond rating. “The answer can’t be ‘we don’t know,’” said Parrish. The coalition told the Business Journal it thought the county’s triple-A rating would remain in place. But the county feels logic may indicate otherwise because the city has a double-A rating, and it’s unclear how the county’s rating could survive intact when it’s combined with a lower rating and additional debt. One difference that marks the two ratings is the county has more money in reserve than the city.

According to County Fiscal Services Director Stephen Duarte, the county saves taxpayers about 23 basis points today for every $1 million it borrows because it has a triple-A rating instead of a double-A mark. Those points cut $2,300 from principal payments for every million dollars of new debt every year. Let’s say the county borrows $120 million for 20 years and the principal payment each year is $6 million. The triple-A rating would reduce the county’s cost for the bond by $276,000 in the first year and by $2.9 million over the 20-year term than the cost would have been if the county had a double-A rating.

“The good side of this,” said Parrish of the consolidation effort, “is it has put these issues front and center.”

Next: Parrish addresses criticism that the county isn’t interested in consolidating because it wants to maintain the status quo.

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