The Columbus Dispatch...
Merging systems may not cut costs for municipalities
By Collin Binkley
Monday August 22, 2011 

Gov. John Kasich and other state officials have urged municipal leaders to be creative and share costs, rather than raise taxes, to cope with the loss of half of the state’s aid to local governments. 

But sharing doesn’t always save money, past examples show, and experts warn that government officials should avoid rushing into deals to combine or share resources. 

“The push is on from outside sources — you’ve got to consolidate, you’ve got to coordinate, to cut costs,” said Susan Cave, director of the Ohio Municipal League. “You really have to do your homework upfront and know what you’re getting into ... not just because the state thinks it’s a cool idea.” 

State Auditor Dave Yost, too, warns that hastily planned consolidations can create costly bureaucracies rather than reduce them. “Pretty soon, that eats the money left from the savings,” he said. 

Consolidating services might seem to be a way to save costs. But that’s not always the intended reason for a merger. 

Hilliard police and Norwich Township fire departments combined their services under one roof, along with township offices. 

And the township/Hilliard joint venture was even profiled on Yost’s Shared Services Idea Center, which touts the collaboration as having “saved taxpayers somewhere in excess of $3 million.” 

But the Joint Safety Services Complex in Hilliard wasn’t necessarily intended to shave costs, said Jamie Miles, Norwich Township finance director. It was “strictly to merge both safety forces under one building.” 

Having employees together in one building creates better communication, she said. Already, the police and fire agencies are sharing diesel and gasoline costs. 

Hilliard police had outgrown their old offices, and building two new headquarters would have been expensive. 

“Doing it individually would have cost the township more; and by combining it, everyone saved,” said Hilliard Finance Director Michelle Kelly-Underwood. 

But the new building costs taxpayers considerably more to operate. Township operating costs jumped 25 percent in the two years since the 2009 move into the $11.5 million complex. The police department’s electric bills have more than doubled since it moved in. Heating costs more than quadrupled. 

The building, at about 65,000 square feet, is more than five times larger than the space firefighters and the township previously shared. 

Similarly, the 2010 merger between Delaware County emergency dispatching services and those in the city of Delaware inflated the county’s operating cost by $2.3 million, officials said. 

Before the merger, the city had run its own call center and was reimbursed for the cost by the county. But officials had long wanted to merge the centers, hoping that eliminating the redundancy would cut costs and provide better service. 

The county, though, ended up footing the bill for technology upgrades across the county, which accounts for much of the added cost. 

In many consolidations, “you can see cost reductions, but you don’t see them the first couple of years,” said Bob Greenlaw, director of the 911 center, adding that costs would flatten out over time and save the county money. 

County taxpayers, so far, have not had to pay more for dispatching. Voters recently approved a request to maintain the same taxes they paid for dispatching services before the merger, but only after they rejected a tax-increase request. 

The key to sharing services, Yost said, is combining agencies that already serve similar populations in similar ways, and with similar goals. To help municipalities do that, his office has created the website www.skinnyohio.gov, which eventually will be a searchable database of policies that have helped municipalities save money. 

If school leaders in Hilliard search “busing,” for example, they might find an example of how a similarly sized district in Ohio saved money on transportation, Yost said. Many of the examples already on the site detail how municipalities shared services. 

Unlike data on the Shared Services Idea Center, which aren’t fact-checked by Yost’s office, the new website will pull information from performance audits that the auditor performed for municipalities. 

As for the examples that aren’t fully vetted, such as the Hilliard/Norwich Township safety building, Yost said, “Maybe that’s something we ought to take off the website.” 

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