Dr. Kurt Thurmaier, Professor and Chair Department of Public Administration, School Of Public & Global Affairs Northern Illinois University

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1 Governance: Should Orange County Become One City? Chapman University February 24, 2017 Painting the Landscape of Political and Functional Local Government Consolidation: The Challenges for Regional Reform in Orange County * Dr. Kurt Thurmaier, Professor and Chair Department of Public Administration, School Of Public & Global Affairs Northern Illinois University The dispersion of political authority continues as a key feature of our federal system. Regional governments that cover a metropolitan area such as the Metropolitan Council in the Minneapolis St. Paul area or Miami Dade County are rare in the United States. Instead, citizens have embraced small-scale regional governance reforms such as metropolitan planning organizations, regional councils of governments, city-county consolidations, and/or shared services to improve local governance. City county consolidations is a middle-ground option that has traction and is frequently debated in US jurisdictions (Leland and Thurmaier 2000). A political city county consolidation merges two or more political structures (typically a county and the largest city in the county) and can include the annexation of unincorporated areas. While rare, such political consolidations remain on the agenda and occasionally are on the ballot in cities and counties across the country. More frequently, local governments have adopted functional consolidation of city and county services that overlap, such as law enforcement, parks and recreation, and sewer and water. The following examines the research on the adoption, implementation, and performance of political consolidation. What Does Consolidated Mean? Both functional and structural types of consolidation are complicated propositions, and both require careful analysis and implementation. Community studies of city county consolidation foster community-wide debates about regional problem solving and the key public administration values of efficiency, effectiveness, equity, and accountability. Marando (1968) asserts that such conversations are about what the future of the area should be and can increase political participation among the electorate. A city county consolidation is a political consolidation because it merges two or more general purpose political structures (typically a county and its largest city) into a single entity with a single legislative body and a mayor or county executive. The unified government is usually defined as a city and a county for purposes of state mandates and taxing powers. There are two paths to political consolidation. Legislatures have the power to consolidate local governments by legislative fiat, such as New York City (1898), New Orleans (1805), and Indianapolis Unigov (1970). Such legislative measures are rare. The more common path is through a citizen referendum. The majority of these consolidation attempts occurs in either smaller rural jurisdictions in states such as Alaska, Montana, Georgia, Kentucky, and Tennessee or larger cities where population ranges from 150,000 to around a million. Political consolidation does not necessarily imply that all services from the former municipality are combined into one government with the county. A considerable number of services such as police and fire may remain unconsolidated, as with Unigov (Indianapolis Marion County, Indiana). Or a consolidated government often establishes separate service districts with different tax rates, mirroring the old boundaries of the city and county (Nashville Davidson County, Tennessee). Most political consolidations exclude both special and school districts. Another important characteristic of most recent city county consolidations in urban areas is that smaller municipalities and towns remain excluded from the political consolidation and continue as independent elected bodies; they can opt out of the consolidation. Unigov, Indiana excludes four cities and one town. Wyandotte County Kansas * An extensive version of this argument is found at Suzanne Leland and Kurt Thurmaier. "Political and Functional Local Government Consolidation: The Challenges for Core Public Administration Values and Regional Reform." The American Review of Public Administration 44(4) suppl. 2014: 29S-46S. 1 of 5

2 City, Kansas (WC/KCK), excludes three cities. 83 incorporated cities were included in the Louisville Jefferson County, Kentucky,consolidation but continued to have their own city councils. In more than 50% of modern consolidation cases, the combined city county elected body contains the same number of elected officials as before, or even more. Smaller municipalities continue to retain their elected bodies and have representation in the new unified government. In the 1997 WC/KCK consolidion, one of the mayors of a town that was excluded from the consolidated government was elected to the unified governing body and served in both capacities. Functional consolidation involves merging specific service areas but leaving the political bodies independent. These arrangements are more flexible than city county consolidation because over time, services can be added, deleted, or shifted between cities and counties. While they preserve local autonomy, they can be characterized by instability if arrangements are easily altered by elected officials turnover, whereas not a single structural consolidation has reverted back to its pre-consolidation structure. Charlotte Mecklenburg County provides a good example of a city with 15 functionally consolidated services such as law enforcement, parks and recreation, motor fleet services, sewer and water, building inspections, animal control, and rideshare. They even share a building and use the same chambers for city council meetings and county commission meetings. Research Questions About Political Consolidation There are two principal research questions regarding political consolidation. Which factors determine whether a consolidation attempt will be successful? The so what question, does a consolidated government keep the promises made by the reformers during the consolidation campaign? What Studies Tell Us About Consolidation Referenda Only about 15% of consolidation referenda adopt a city county merger proposal. The classic consolidation model developed by Rosenbaum and Kammerer (1974) asserts that consolidation prevails only under rare circumstances where there is some kind of crisis in local government. They describe three necessary stages to achieve passage: first, a crisis climate to precipitate such a radical reform; second, an inadequate or errant response of local authorities to the crises that leads to the rejection of the local government structure (power deflation) by unhappy civic elites; and third, a catalytic event that accelerates the consolidation debate and moves the voting public to support city county consolidation. It is worth noting that increased efficiency was not seen as a critical element of the Rosenbaum and Kammerer model (the R&K model). The activities giving rise to consolidation had more to do with the ineffectual response of governments to problems than gains in government efficiency. In 2004, Leland and Thurmaier revised the R&K model to account for these critiques. The C3 (city county consolidation) model synthesizes previous consolidation literature and transforms the extended stages patterns of the previous work into a set of measurable criteria that apply to each of the consolidation movements that have reached a referendum in the United States over the last century. It expands and modifies the basic R&K model in five important ways. First, the C3 model focuses on the institutional framework in which the consolidation efforts will occur; it emphasizes the importance of each state s legal framework for inhibiting or enhancing consolidation efforts noting that the relationship between states and local governments is unitary and not one of shared sovereignty like the national-state relationship. For example, 39 states do not have enabling legislation and referenda require special legislation. Second, the C3 model expands the characteristic alternative government responses in the R&K model to include voter alienation. Third, the model suggests that specific charter provisions may provoke specific interest group attitudes (elite or non-elite) toward the proposed charter, which may trigger active participation (for or against) in the ensuing consolidation referendum campaign. Fourth, the C3 model appends a referendum campaign stage to the end of the basic R&K model, and divides the consolidation process into two parts: It is likely that the actors interested in and capable of accessing the local policy agenda are different from those able and willing to pursue a countywide referendum (Carr & Feiock, 1999, p. 477). Part 1 focuses on elite agenda-setting activities that culminate (or not) in a consolidated government charter proposal that is presented to voters. It expects that whether the civic elite are united or divided matters. Part 2 of the model focuses on the election campaigns for and against the proposed 2 of 5

3 charter, culminating in the referendum itself. The C3 model predicts that the politics that lead to a charter proposal are not necessarily the same politics that contribute to successful passage of the proposal in a referendum. One of the important characteristics of successful consolidation efforts is that the frequency of consolidation failure in a particular county often corresponds to repeated attempts by advocates to achieve a successful referendum vote. In that sense, initial stages of the latest round of reform efforts are likely related to the later stages of a previous reform effort in the county. Finally, the C3 model highlights the role that the civic elite play in the consolidation reform effort throughout the process, both in leading to a charter proposal and in the campaign for voter approval. Leland and Thurmaier (2004) led a team of 17 scholars who tested this model with a sophisticated comparative case study design using 12 cases of consolidation referenda that occurred between 1970 and The most important finding of the study is that campaigns emphasizing increased governmental efficiency always lose; the voters do not seem to believe that promise. However, campaigns that emphasize increased economic development for the community (now redefined as the larger county-wide community) have a strong chance of success. Other important factors identified by the study include the central importance of the sheriff s support (campaigns fail without it), the legal framework of state law conditions options and thus successful charters, minority protections for electoral representation in the new governing body are necessary elements, and a safety net for public employees (guaranteeing no job losses and no reductions in pay) are critical to precluding active public sector opposition. The Promises of Consolidations Local government reformers have not been able to point to systematic evidence that consolidated governments keep the promises of increasing accountability, equity, efficiency, and effectiveness of local government service delivery. In 2010, Thurmaier and Leland led a team of 16 scholars to assess the success of city county consolidations in a quasiexperimental comparative case study design of nine cases of consolidation between 1970 and The study finds that efficiency gains are at best a proposition, but there is evidence of increased effectiveness in community economic development relative to the comparison cases. The probability of increased government efficiency is often lowered by the compromising, political nature of consolidation campaigns for small and large, rural and urban consolidations. To neutralize powerful voting blocs and opposition of current elected officials, proponents often have to sacrifice some of the easiest ways to economize. Thus, proponents often promise not to decrease the number of elected officials. The elected sheriff remains elected. Proponents may also promise no layoffs of city and county employees and that savings will accumulate from attrition over the long run. Lower county salaries are typically increased as opposed to decreasing the higher city salaries; proponents typically would not argue that they will lower the salaries of city police officers to the level of the county sheriff s officers. Second, promised economies of scale in service delivery (e.g., water, sanitation, policing) can be dwarfed by the new capital investments to raise rural service levels. While debt financing can obviate the need for large, immediate capital spending, the debt still must be repaid with higher revenues for some time. In small jurisdictions, such as in Lynchburg Moore, Tennessee, where debt financing is not as easy as in larger jurisdictions, the spike in spending related to new fire engines, new police cars, and uniforms can swamp the expected economies of scale quickly (Carroll, Wagers, & Wiggins, 2010). Efforts to merge governments can expect to spend more on merging information technology (IT) systems than any hypothesized savings that might come from fewer IT staff in the short run. Organizations have different equipment, forms, telecommunication systems, and so forth. Finally, the presumed savings from blending finance and budgeting administrations are often elusive. The administrative service functions in a city and a county do not overlap much. The county s finance department is largely oriented toward collecting taxes on behalf of the constituent governments and the state, involving property assessments and billings that the cities do not perform. In addition, the expanded social service and other state-mandated functions of county government require attention at the budget office level that is not required in a city budget office. Functional Consolidation Functional consolidation is a middle-ground resolution of the metropolitan efficiency and effectiveness debate. If the goals of regionalists include more effective and more efficient service delivery, allocating resources more strategically across multiple jurisdictions can accomplish both of those goals, without reducing the political efficiency that is prized by Tiebout (1956) and his intellectual heirs. 3 of 5

4 Local governments have been sharing service responsibilities for many decades through interlocal agreements (ILAs), and the intergovernmental relations literature has established the extent of local governments participation in intergovernmental service delivery (Agranoff & McGuire, 2003; Agranoff & Pattakos, 1985; Bartle & Swayze, 1997; Coalition to Improve Management in State and Local Government, 1992; Friesema, 1971; Henderson, 1984; Jones, 1942; Meek, Schildt, & Witt, 2002; Morgan & Hirlinger, 1991; Pagano, 1999; Shanahan, 1991; Studenski, 1930; Thurmaier & Wood, 2002; Zimmerman, 1974a, 1974b, 1976; U.S. Advisory Commission on Intergovernmental Relations, 1985; Wikstrom, 2002; Wood, 2006). ILAs range from informal agreements to lend/borrow equipment to public safety mutual aid agreements to consolidation and joint management of specific public services. Scholars who use social network theory identify social networks as the infrastructure by which administrators and elected officials develop notions of mutual interest, interpersonal and inter-organizational trust, and norms of reciprocity that lead to innovative collaborations to deliver public services more effectively and efficiently (Chen & Thurmaier, 2009; LeRoux & Carr 2007; LeRoux et al., 2010; Thurmaier & Wood, 2002; Zeemering, 2008). Chen and Thurmaier (2009), for example, find that the most common reasons for the creation of agreements is that public officials believe that an ILA will increase the effectiveness and efficiency of a public service, with the fiscal condition of the local government cited not nearly as often. This suggests that management considerations are the most important impetus for ILA participation, not fiscal crisis. They also find that equitable sharing of benefits is important for the successful implementation of interlocal agreements, and norms of reciprocity that emanate from underlying social networks underpin effective agreements. Carr, LeRoux, and Shrestha (2009) blend the social network and institutional collective action approaches in a study of Michigan communities that finds that some types of networks created by institutions increase the likelihood that local governments will rely on intergovernmental service arrangements, finding that that service production decisions are conditioned by the communication networks created through institutional linkages in addition to the transaction characteristics of services. Systematic research suggests that local governments are unlikely to be forced into service consolidation because of the economic climate, nor for that matter because of state legislative pressure. Conclusion A key obstacle to service consolidation among local governments is the perceived loss of political power and control associated with consolidation efforts. Multilevel governance theory and the concept of shared sovereignty offer an approach to regional problems with an eye to the political as well as administrative issues, and with instruments that promote core public administration values. Functional consolidation at a regional level can increase social equity by broadening the service delivery tax base and service area, one service at a time, without the political costs of wholesale metropolitan governments. The concept of shared sovereignty that underpins the regional collaboration of the countries in Europe has both descriptive and predictive theoretical potential for Orange County governments. The EU functions from a web of interlaced, interdependent agreements to share sovereignty in ways that manage political issues, economic factors, and administrative values, and in a fashion aligned with core PA values in the United States. The current EU challenges notwithstanding, the shared sovereignty model bears future study and consideration. It has worked very well to overcome centuries of conflict, accommodate multiple cultural identities, and consolidate service delivery in a host of functional consolidations. The complex urban environment of Orange County, providing services to 3 million people in 34 cities spread across 800 square miles likely benefits from a complex web of overlapping interlocal agreements (aka EU treaties) that increase service delivery effectiveness and efficiency. There are likely opportunities for more of the same. References Agranoff, R., & McGuire, M. (2003). Collaborative public management: New strategies for local government. Washington, DC: Georgetown University Press. Agranoff, R., & Pattakos, A. N. (1985). Human services in local government: Patterns of service at metropolitan levels ( ). In Municipal year book. Washington, DC: International City and County Management Association. Bartle, J. R., & Swayze, R. (1997). Interlocal cooperation in Nebraska. Unpublished report prepared for the Nebraska Mandates Management Initiative. Carr, J. B., & Feiock, R. C. (1999). Metropolitan government and economic development. Urban Affairs Review, 34(3), Carr, J. B., LeRoux, K., & Shrestha, M. (2009). Institutional ties, transaction costs, and external service production. Urban Affairs Review, 44, of 5

5 Carroll, D. A., Wagers, K. A., & Wiggins, M. E. (2010). The Case of Lynchburg and Moore County, Tennessee ( ), in S Leland & K. Thurmaier (eds.), City-county Consolidation: Promises Made, Promises Kept?. Georgetown University Press. Chen, Y.-C., & Thurmaier, K. (2009). Interlocal agreements as collaborations: An empirical investigation of impetuses, norms, and success. American Review of Public Administration, 39, Coalition to Improve Management in State and Local Government. (1992). Improving local services through intergovernmental and intersectoral cooperation. Pittsburgh, PA: The Coalition. Friesema, H. P. (1971). Metropolitan political structure: Intergovernmental relations and political integration in the quad-cities. Iowa City: University of Iowa Press. Henderson, L. M. (1985). Intergovernmental service arrangements and the transfer of functions ( ). In Municipal year book. Washington, DC: International City and County Management Association. Jones, V. (1942). Metropolitan government (Vol. 39). Ill., the University of Chicago Press. Leland, S., & Thurmaier, K. (2000). Metropolitan consolidation success: Returning to the roots of local government reform. Public Administration Quarterly, 24, Leland, S., & Thurmaier, K. (2004). Case studies of city-county consolidation: The changing local landscape. Armonk, NY: M. E. Sharpe. S Leland & K. Thurmaier (eds.), (2010). City-county Consolidation: Promises Made, Promises Kept? Georgetown University Press. LeRoux, K., & Carr, J. B. (2007). Explaining local government cooperation on public works: Evidence from Michigan. Public Works Management & Policy, 12, LeRoux, K., Brandenburger, P.W., Pandey, S.K. (2010). Interlocal service cooperation in U.S. cities: A social network explanation. Public Administration Review, 70(2), Marando, V. (1968). Inter-local cooperation in a metropolitan area. Urban Affairs Quarterly, 4, Meek, J. W., Schildt, K., & Witt, M. (2002). Local government administration in a metropolitan context. In G. H. Frederickson & J. Nalbandian (Eds.), The future of local government administration: The Hansell Symposium (pp ). Washington, DC: International City and County Management Association. Morgan, D. R., & Hirlinger, M. W. (1991). Intergovernmental service contracts: A multivariate explanation. Urban Affairs Quarterly, 27, Pagano, M. (1999). Metropolitan limits: Intrametropolitan disparities and governance in U.S. laboratories of democracy. In A. Altshuler, W. Morrill, H. Wolman, & F. Mitchell (Eds.), Governance and opportunity in metropolitan America. Washington, DC: National Academy Press, Rosenbaum, W., & Kammerer, G. (1974). Against long odds: The theory and practice of successful governmental consolidation (Administrative and Policy Studies, Series. No ). Beverly Hills, CA: SAGE. Shanahan, E. (August, 1991). Going it jointly: Regional solutions for local problems. In Governing, Studenski, P. (1930). The government in the metropolitan areas of the United States. New York, NY: National Municipal League. Thurmaier, K., & Wood, C. (2002). Interlocal agreements as overlapping social networks: Picket-fence regionalism in metropolitan Kansas City. Public Administration Review, 62, Tiebout, C. M. (1956). A pure theory of local expenditures. Journal of Political Economy, 44, U.S. Advisory Commission on Intergovernmental Relations. (1985). Intergovernmental service arrangements for delivering local public services: Update Washington, DC: Government Printing Office. Wikstrom, N. (2002). The city in the regional mosaic. In G. H. Frederickson & J. Nalbandian (Eds.), The future of local government administration: The Hansell Symposium (pp ). Washington, DC: International City and County Management Association. Wood, C. (2006). Scope and patterns of metropolitan governance in urban America: Probing the complexities in the Kansas City region. American Review of Public Administration, 36, Zeemering, E. S. (2008). Governing interlocal cooperation: City council interests and the implications for public management. Public Administration Review, 68, Zimmerman, J. F. (1974a). The metropolitan area problem. Annals of the American Academy of Political and Social Science, 416, Zimmerman, J. F. (1974b). Intergovernmental service agreements and the transfer of functions. In Substate regionalism and the federal system (Vol. 3). Washington, DC: Government Printing Office, Zimmerman, J. F. (1976). Pragmatic federalism: The reassignment of functional responsibility. Washington, DC: Government Printing Office. 5 of 5