The Outstater: Consolidation Unraveled

July 30, 2014

THE ETERNAL IMPULSES that argue for consolidated government, regional zoning, county executives, etc., have awakened in our corner of Indiana. Someone forgot, apparently, to drive the stakes through their hearts during the last rising.

So we citizens finds ourselves divided by an argument that won’t be resolved in the light of day; that is, rhetorically in advance of policy. Some of us simply believe; others of us simply don’t. The thing will be settled only in the messy world of actual cause and effect.

Coincidentally, an item came across our desk this week that offered valuable perspective. Ten years ago, former Mayor Bart Peterson of Indianapolis began a campaign to merge certain police and fire departments in Marion County. His most persuasive argument, other than the gathering of power and influence, was that taxpayers would save money.

Peterson guessed that consolidation would save close to $9 million: $300,000 through better management; $1.3 million in reduced facilities and fleet costs; $1.5 million in support services and $1.4 million in budget efficiencies; and $4.3 million in personnel costs.

Those savings were not realized. Indeed, they were largely imaginary, as experts at the time had told everybody would be the case. Undaunted, the Chamber of Commerce, the Indianapolis Star and the leadership of both political parties jumped for civic joy. Consolidation would improve efficiency, they had cheered as one. This was supposed to work in the same way as businesses combine departments — or in the same way you might combine the operations of your kitchen with your garage.

Oops, bad example . . . no wait, it was a good one, for what was being combined in the stratosphere of Indianapolis City Hall was not combinable as apples are with apples or oranges are with oranges.

Our Dr. Sam Staley made that point in testimony before a study commission of the General Assembly. He had told the legislators, without refutation, that the savings estimates were exaggerated. That, he said, was partly because the estimates assumed labor costs would not increase when higher-paid city union salaries were combined with lower-paid county non-union salaries at the higher rate, which, of course was the point of this calculated exercise.

Related testimony from a forensic accounting firm revealed that the mayor’s “savings” were mostly the result of uncommon accounting practices and blatant omissions. One example that sticks in the mind was the administration’s inclusion of monies that had been gradually put away by county trustees for large-equipment purchases. That was cleverly wrapped into the mayor’s projections of first-year consolidation “savings.”

This massive misunderstanding — the word fraud is overused these days — was detailed this month in a long-delayed audit report, one that had been grudgingly ordered way back in 2007 as a condition of GOP approval.

Russ McQuaid of Fox59 News broke the story: “Management savings were negligible, facilities savings were eaten up by contracted lease costs, unforeseen technology costs negated the support-services predictions, contracted jail medical and food costs wiped out budget efficiencies, and overtime and Social Security spending, combined with pay raises, actually increased personnel costs, according to the audit.”

Marion County taxpayers must live with the results. The rest of us, though, can be on watch for politicians promising to run our government more efficiently. They miss the point that we don’t want them to run it more efficiently so much as less intrusively, the difference in this case being a $9-million waste of everybody’s time, not including the inestimable cost of switching from democratic to administrative rule. — Craig Ladwig

See also: Sam Staley, ed., with Dagney Faulk, Suzanne Leland and Eric Schansberg. “Consolidating Local Government: What Works and What Doesn’t.” The Indiana Policy Review, winter 2006 (membership required).



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