LANSING (AP) – A survey of the state’s local government leaders found that Gov. Rick Snyder’s financial incentives for communities to share services are working, although most were collaborating to save money long before Snyder took office last year.

The University of Michigan survey results also found that not all communities are getting on board, with some saying they wouldn’t save enough money by sharing services or wouldn’t get enough in incentive money to make it worthwhile.

“Just making something bigger doesn’t make it better. If it did, then Detroit would be the most efficient city in Michigan,” Royal Oak City Manager Don Johnson said Wednesday.
The university posted the report on the survey findings on its website Thursday. The Associated Press obtained an advance copy.
Royal Oak has shared water, sewer and trash removal services with 11 nearby communities for more than 50 years and looks for additional ways to save money through further collaboration, Johnson said. But the mayor and city commission of this Oakland County community also sent a January letter to Snyder noting not every effort proves worthwhile.

The city recently decided against sharing police dispatch and jail services with Madison Heights and Troy because the arrangement would have been “very favorable for Troy, not so favorable for Madison Heights and not favorable at all for Royal Oak,” Johnson said. “When you do these kinds of things, everybody has to win. Because the losers aren’t going to participate.”

The current state budget splits $210 million among nearly 500 cities, townships and villages that take steps to share services, post online reports Snyder refers to as “dashboards” and have employees pay for a bigger share of their benefit costs. Twenty-seven communities also got to share $5 million in grants to put more shared services in place.
Snyder was so happy with how well the Economic Vitality Incentive Program worked that he wants to give local communities another $210 million if they continue to follow what he calls “best practices” in the budget year that starts Oct. 1. He also wants to raise the level of grants to $25 million to help communities pay for merging services and would replace revenue sharing for counties with $125.6 million in similar incentives.
“If some communities were already doing sharing, that is great, but we know there is always room for improvement,” Snyder spokeswoman Geralyn Lasher said Wednesday. “The goal is to consistently improve services and provide better value to the citizens.”

The University of Michigan survey found that communities have been collaborating for years, pushed by the chance to save money as they lost state funding over the past decade and, more recently, dealt with capped or falling property tax revenues.

“Intergovernmental cooperation is just extraordinarily common out there,” said Thomas Ivacko of the university’s Gerald R. Ford School of Public Policy, which conducted the survey. But he also found evidence that communities have ended existing agreements so that they could create new ones that would qualify them for the additional state money, an unintended consequence.
In the fall of 2010, before Snyder became governor, 72 percent of local jurisdictions already were sharing services and looking to expand those efforts, Ivacko said. Snyder’s financial incentives caused most of the rest to get on board and submit plans to the state last year for new or expanded efforts, although some small communities said they couldn’t make it work.

Escanaba shares its 911 dispatching, water and landfill services and a sports center with other communities. The Upper Peninsula city buys its copy paper jointly with the local school district and has the county buy its snow plow blades so it gets a better deal.

City Manager James O’Toole agrees with Snyder’s push to get local governments to run more cheaply and efficiently, but he said he worries his community won’t get credit for the services it already shares. Like Johnson, he said squeezing more services together doesn’t always add up financially.

“If this is to be driving revenue, we absolutely think we deserve credit for what we’ve done,” O’Toole said. “I hope I don’t get into a situation where we’re just doing things to say we’re doing things. It has to be meaningful.”

The survey was conducted from Oct. 3 through Nov. 23 last year and was sent to all of the state’s 1,856 local jurisdictions. The findings were based on the 1,331 countable responses and cited the results of a similar fall 2010 survey. The margin of sampling error was plus or minus 1.5 percentage points.

Survey: At this link

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