The Chelsea Standard
A Heritage Newspaper
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The buck stops where?
Lawmakers target townships in effort to save money and consolidate services
By Sean Dalton, Heritage Newspapers
PUBLISHED: January 31, 2008
A bill at the state level is making plenty of noise, not because it might someday become law, but more because of the bigger ramifications it could have on government agencies, especially townships and counties.
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A bill now being considered by state lawmakers would shift several essential services from township control to county responsibility, effecting some 55 percent of Washtenaw County's 351,232 residents currently living in townships.
One piece of legislation included in the bill would force drastic changes in the responsibilities of a township, including turning over local elections to the county.
House Bill No. 4780, or the Township Services Consolidation Act, would automatically effect 16 of Washtenaw County's 20 townships - with the other four (Pittsfield, Scio, Superior and Ypsilanti) needing evaluation of other criteria to determine whether they are subject as well.
State Rep. Paul Condino, D-35th District, is the architect of the bill. And while even he doesn't expect it to ever become law, it's the intent of the bill that is important and the reason he introduced it in the first place.
Condino said his sponsorship of the bill, along with co-sponsor state Rep. Virgil Smith, D-7th District, was a strategic move at the request of Speaker of the House Andy Dillon (D-17th District) to get the ball rolling on consolidation talks.
"There was no feeling to move these bills, but to start the debate," Condino said. "And boy did it work. This package of bills is just one part of a lengthy dialogue at the state level."
The package of nine pieces of legislation tied into the Township Services Consolidation Act (House Bills 4780 through 4788) was introduced during the May 17, 2007, House session and subsequently referred to the Committee on Intergovernmental, Urban and Regional Affairs, where it has remained untouched ever since. While no official action has taken place, the act has sparked plenty of discussion and debate, which was the intent all along.
Condino said the feedback of his sponsorship of the act as been "active and ongoing," especially from township officials throughout the state.
"At a Michigan Township Association forum in September, there was a large response to the bill," Condino said. "The question was whose jobs were threatened, and what would this mean for township supervisors and other employees. But there were also some interesting ideas of consolidation that have come from these same discussions."
Under Michigan law, township clerks handle municipal and school district elections, while township supervisors, treasurers and assessing officers employed by a township handle tax collection and property assessment. If the act passes, these duties would shift to the county clerk, county treasurer and county equalization department and would be conducted locally by the administering county officials.
The county also would conduct school elections and qualifying townships would have to reimburse the county for those services rendered.
The act would affect those townships with a population of fewer than 10,000 people or a township that has between 10,000 and 20,000 residents, but doesn't provide fire and police service on a 24-hour basis, either through contracting or by directly providing those services. Townships in that population range must also provide water and sewer to 50 percent or more of its residents.
Condino has denied claims that this consolidation talk is an attack on the township form of government and an attempt to eliminate it, saying that is "simply not the case."
He admits that the public has been quiet on the issue, but the few who have contacted him have been supportive of the idea.
Condino said the House drafted the Township Services Consolidation Act after Gov. Jennifer Granholm presented last year's State of the State Address, calling for a "transformation of government" into something more "lean and mean."
Granholm called for state government to root out inefficiencies and do more with less through reforms as quickly as possible because of the state's continuing budget issues.
"We've saved hundreds of millions of dollars through initiatives like bulk purchasing of prescription drugs, new protections against food stamp fraud and forcing state departments to share services," Granholm said in the address.
Since 2002, the state has 7,000 fewer employees, she said at the time. "In fact, the size of the state government workforce is smaller today than it was in 1973, yet these state employees are serving over a million more citizens today than they did in the '70s," she said.
"Michigan's counties, cities and villages, townships and school districts all must do more to share and consolidate resources."
Townships already have been taking measures to consolidate as a result of changing requirements attached to state revenue sharing.
To qualify for revenue sharing from the state, a municipality often must demonstrate movement toward shared services or consolidation with nearby units of government at the local or county level. Progress in those areas is measured by a dollar figure that represents taxpayer savings or, as the state calls them, efficiency milestones.
"It's simple," Granholm said. "When they show us they're consolidating or sharing, we'll show them the money.'"
Similar consolidation requirements are attached to school district funding, urging school districts to move services to the county or state level.
Leslie Fritz, budget spokeswoman for Granholm, said penalties mentioned in the address could be included in the budget, which will be presented on Feb. 7.
Penalties would reduce state revenue sharing if local governments don't demonstrate to the state that they are creating cost efficiencies. Incentives were the goal in the previous budget, Fritz said.
"Instead of penalties, one of the things that (Granholm) proposed last year were incentives for local government," Fritz said. "We originally tied that to revenue sharing, but our last budget did not include that piece."
The proposal was to reward municipalities that met a cost-savings benchmark.
Fritz said whole township services could be a means to that end, but said that "less drastic steps," such as fire services, trash pickup and group purchasing, also could be used to meet the benchmarks.
"This legislation is a dramatic example of the things we are talking about, but just getting the conversation started is an essential first step that I think it has accomplished," Fritz said.
"In this economy, local government looking to save money is just as important as the state looking to save money."
Cost efficiency
Michigan Township Association Executive Director Larry Merrill isn't necessarily against consolidation and regional efforts in a broad sense, but worries about this effort to bring attention to the issue and whom it targets.
"The premise that townships need to be singled out for shock and awe ignores that townships are very involved in collaborative agreements," Merrill said. "Instead, what units of government ought to be looking at is where there are economies of scale, such as capital services including utilities, water and sewer."
As an example, he cites the Detroit Water and Sewerage Department, which reaches far beyond the city's urban borders to provide water and sewer service to four million people in 126 communities.
A good example of governmental consolidation, Merrill said, exists in the Upper Peninsula, where a cluster of five communities that originated around a cluster of once operational mines have adjusted to the times.
With the shift from industry to commerce — Iron River is the commercial center of Iron County — Iron River, Mineral Hills, Stambaugh, Caspian and Gaastra formed one government, having been forced to by the nearly complete disappearance of the industry that spurred their settlement in the 1800s.
"It's not something you just pass a law and make happen," Merrill said. "There are a number of communities in southeast Michigan where the tax bases have shrunk and their financial ability to support locally produced and managed services is harder to do. Local officials will react on their own during the budgetary process."
Merrill said the state could support local studies with grants, ensuring township officials have the knowledge to make their own decisions more wisely.
In the case of townships, many functions are already provided at the lowest cost, compared to other units of government.
"The officials and employees who make those functions make $12,000 per year and work in excess of what they are compensated for, making them, largely, volunteers," Merrill said. "The counties do not have the capacity and studies show that the more work a county takes on, the more they have to raise wages to accordingly compensate their employees to deal with the additional complexity that comes with rolling townships functions and services into the county's framework."
The Michigan Township Association commissioned a study of the areas addressed in the consolidation act. Researchers working in Michigan State University's State and Local Government Program looked at elections, tax collection and property assessment. Property assessment appeared to be the only area that could be properly studied in a meaningful way because of all of the variables in election administration and tax collection, said Eric Scorsone, co-director of the program.
"I don't think elections and tax collection consume a significant portion of any township's budget," Scorsone said. "Many election functions are embedded in the clerk's office and they are handled largely by volunteers."
Assessment was probably the most expensive and easiest to study, he said.
Scorsone said that the study determined that 508 townships surveyed, or 40 percent of townships in Michigan, spend $14.6 million to provide assessment services, while just 19 of the 32 counties surveyed would spend $16 million to provide the same services. There are 83 counties in the state.
"I think that clearly there is not cost efficiency," Scorsone said. "There might be a better assessment process, but we didn't look at that. The argument has been made that a better process might produce a better outcome, but I don't know if that is true."
Scorsone also called into question a potential conflict of interest having property assessment handled by the equalization department, which is itself a check on local assessment, with a check on itself existing in the state equalization department.
"The reason we have these separated is conflict of interest," he said. "Does equalization get moved up from the county to the state next?"
Equalization is the process by which the county regulates the cost of properties on a class-by-class basis, assigning a rating to residential, commercial and other property classes that increase or decrease the locally assessed value. The state subsequently sets a value for each class or zone of property that increases or decreases the county equalization rating to keep values uniform and in check.
In addition to the broad question of conflict, Scorsone said that just about every county he has communicated with reported that it didn't have the staff or building capacity to take on such a burden in totality.
"In some cases, it makes sense, but in others it doesn't. But to force every one of those that doesn't make sense is a problem, and the majority of them don't," he said.
Scorsone also wondered what would happen to the local Board of Review, at which residents can dispute their valuation and go to court as a next step if the review is not agreeable.
Aside from the efficiency question, he also said that inefficiencies are sometimes built into government for a purpose.
"Many equalization directors expressed that we separate these things for a reason - that reason being that if you put all of these things in the same place, it's easier for corruption and other issues to arise," Scorsone said. "It's kind of like why we separate different cash management duties in municipalities, with some of those duties handled by different people, so it's more difficult to embezzle.
State law does allow local municipalities to farm out their property assessment to the county, which there are instances of in Washtenaw County.
Saline Township, for example, already contracts with the county to handle property assessment and Freedom Township typically has a partial contract with the county.
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