State releases findings on Norwich consolidation study

Consolidating the City of Norwich, Town of Norwich and Town of North Norwich into one government would save money for taxpayers in all three municipalities and increase local revenues, a state study released today claims.

Leaders in the towns, however, say they’re skeptical of the study’s findings, questioning the accuracy of the data and its general assertion that small governments are outdated and contributors to local and state economic woes.

City of Norwich Mayor Joseph Maiurano, whose municipality currently faces a weakening tax base and mounting expenses with limited room for expansion, believes considering consolidation and other forms of shared services could open the Greater Norwich area as a whole to more economic opportunities.

Conducted by the Center for Governmental Research, an Albany and Rochester-based private consulting firm, the study outlines two options for full consolidation:

• A merger of the towns into the City of Norwich.

• A dissolution of the city into the Town of Norwich.

The analysis includes benefits and challenges for each scenario.

“Like many other upstate communities, Norwich is facing negative demographic and economic trends that produce fiscal stress,” said John Clarkson, executive director of the State Commission on Local Government Efficiency and Competitiveness, which funded the Norwich study as part of its statewide report on local government consolidation, also released today. “These pressures often prompt local restructuring efforts, which can both reduce costs and improve services in many instances.”

Aside from mergers, the report suggests creating a combined highway department and a multi-government oversight board to manage future development and investment in the city’s water and sewer infrastructure.

If the three governments were to become a combined city, there could be significant increases in sales tax revenue and annual state aid, along with $214,000 in immediate savings as a result of reduced personnel and town court costs, the report states.

Challenges of becoming a combined city include: merging unionized professionals (city) with non-unionized professionals (towns), which would likely reduce personnel reduction savings; personality conflicts and difficulties between officials; and the potential of increased property taxes for current town taxpayers, as the combined costs of the new entity are spread across the entire community (although the report states that the potential for increased revenue could result in an overall savings, pending further analysis).

All three municipalities already share services to some degree – the city provides contracted fire and ambulance services to both towns, as well as water and sewer to the highly developed parts of the Town of Norwich.

Although town officials dispute the numbers, CGR concludes greater efficiencies could be found from further collaboration in light of statistical trends that show rising expenses and decreased operating funds outpacing revenues in all three governments.

“Norwich, like many other communities, is already undertaking numerous shared services and cooperative agreements, and as the CGR report noted, there are lessons for other communities in your experiences,” said Clarkson. “At the same time, there is still untapped potential for further action, with particular opportunities areas in water, sewer and consolidated highway operations.”

Consolidating the towns of Norwich and North Norwich into the city would create a new municipality that would be 72.3 square miles in size, making it the largest city in terms of land area in the state.

Similar recommendations were made for the greater Cortland and Oneonta areas, which were also included in the report.

Ultimately, the study concludes that Cortland, Norwich and Oneonta have lessons to offer each other based on their similarities, yet their different governmental models and practices.

City of Norwich reactions

“The big things is the revenues,” said City Mayor Joseph Maiurano, who spearheaded consolidation talks in Norwich by replying to a letter sent by former Governor Eliot Spitzer in April 2007 to all local governments asking for consolidation ideas. “There would be some savings with consolidation. But the biggest deal is the revenue, that is huge.”

Maiurano is referring to increased sales tax revenue and state aid that would be available should the municipalities combine into a city. He argues that spreading around that added money will not only help offset city tax burdens, but drive down costs even further in both the towns, which already have considerably less services, less expenses and little to no debt burdens compared to the city’s infrastructure costs.

“I see more of a mutual gain,” said Maiurano, arguing that a high tide could raise all boats, not just those in one municipality or the other. “It’s probably the best thing for the whole area.”

Maiurano added that if portions of the sales tax revenues were to be pre-empted to remain in a combined city, that a balance on the amount could be struck with the county so as to mitigate the impact on county and town operations that currently receive that money.

In the near future, the Mayor would like to see further discussion on a regional water district that could encompass a much bigger area, arguing that it could open up Greater Norwich for further development.

Town of Norwich reactions

As far as the prospect of increased sales tax revenue, town officials say that’s just shifting the burden off one level of government and onto another.

“You’re just passing the buck on to the county,” said Town Councilman Adam Evans, since the county uses the majority of sales tax revenue as a way of lessening the taxes towns owe the county each year.

“Somebody has to pay,” added Town Supervisor David Law. “Everything comes with a price.”

Law doesn’t believe the three municipalities can hang their hats on increased state aid, either.

“This is the bottom line: The Governor has said, ‘Hold it New York state, we’ve got to stop spending,’” said Law, who questions if state aid will always be there in the future. “This is going to happen to all Americans. We haven’t seen the effects of our economy right now.”

Evans said the study’s assertion that the town had experienced a period of fiscal distress was a misnomer based solely on an over $400,000 spike in costs in 2006 due to heavy flood damage and a scheduled building project. The councilman argues that town was prepared for the challenges, and did not have to raise taxes or take on any bonds as a result.

“We’ll be in as good or better shape than we were in 2006,” he said.

Rather than consolidation as a solution, Evans believes the city could cut its spending and become more fiscally responsible.

“This town has always lived within its means,” he said. “Taxpayers in the city have a choice. They can continue on with the government they’ve had and the high taxes they’ve had. But if they want the services they receive at a lower cost, maybe there are tough decisions to be made.”

Town of North Norwich reactions

On the overall concepts, Town Supervisor Richard Decker isn’t sold that local governments drive taxpayer burdens in New York.

“My estimation is that local government is not the driver of the taxes,” said Decker, arguing that state mandates for Medicaid and social services are the biggest tax drivers locally. “What are our options? The state sets the mandates, we raise the taxes.”

However, Decker does believe the concept of looking at local efficiency and consolidation, to a degree, could be beneficial.

“It gets us all to sit and discuss what our options are,” said Decker, “and ask, ‘Are these ideas that our communities can handle, that we can make work or implement on some level, if not in their entirety?”

“Looking at efficiency is sometimes as important as looking at the monetary side of things,” he added. “(It would beneficial) if we can glean something out of here that will smooth the process up.”

Decker did take exception with Town of North Norwich highway fund figures for 2006, stating that they were inflated by $200,000.

Officials for CGR say the findings were accurate, and based on numbers reported by the towns to the state Comptroller’s Office.

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