County merger project disappoints

All but four drop out of proposed 12-county human services consolidation

Far away from St. Paul, a group of counties in southeastern Minnesota has been trying to convert the much-talked-about notion of government services consolidation into reality. For Laura Elvebak, Waseca County’s administrator, the county’s outlook makes what’s generally known as government redesign a matter of survival.

“One of the things that the County Board is looking at is the services we’re providing now,” Elvebak said. “The level and the cost [are] unsustainable. We continue to get requests for more and more services, we continue to see our funding sources reduced. And so it’s getting more and more difficult for us to continue to provide services at a level that the board and county staff are pleased with.”

The Waseca County Board last week voted 3-2 to pursue a plan to merge human services with Dodge, Mower and Steele counties. The merger plan, known as the Southeastern Minnesota Redesign Project, is moving toward becoming a cost-saving reality. But it is also a living example of the myriad roadblocks that arise when counties of different sizes and governing philosophies try to combine important services such as caring for aging residents.

The four counties are the sole remnants of what started as a 12-county consolidation initiative. One of the counties that recently decided to bail on the merger is Freeborn, along the Iowa border. County Administrator John Kluever noted that abiding differences led more than half of the counties to jump ship. For example, some counties have human services programs that place a premium on preventive services. Others focus on providing the basic set of state-mandated services. And, Kluever said, Freeborn County commissioners got spooked by the initial costs of implementation.

“Governance, cost and philosophy — those are the three that [the county commissioners] talk about quite a bit,” Kluever said.

A report released in May by the Office of the Legislative Auditor found that Minnesota has 2,700 local governments — the second largest number in the United States, according to auditor’s crunching of U.S. Census data. Among the trends, the report found that larger government entities, like populous counties, are hesitant to join financially weaker neighbors. Smaller entities, conversely, tend to be more amenable to combining forces to realize economies of scale. The auditor’s report stressed that local governments fare better in banding together when they, rather than the state, start the conversation. But lawmakers at the Capitol have balanced the calls for restraint with pushes toward consolidation in hopes of lessening the state’s general fund obligations through programs such as local government aid.

In the case of southeast Minnesota and elsewhere, a couple of key points underscore why local government consolidation agreements are difficult to achieve.

“I think there are always three things that get in the way of change in redesign,” said Rep. Carol McFarlane, R-White Bear Lake. “That’s job protection, funding protection and identity protection. Those three things, in the public sector and private sector, are obstacles to change.”

McFarlane, who was redistricted into House Majority Leader Matt Dean’s district and lost the local GOP endorsement to him, is a co-chair of the Legislative Redesign Caucus. She has also been chief author of the Minnesota Accountable Government Innovation and Collaboration (MAGIC) Act, which would give local governments more flexibility to launch pilot projects.

Service consolidations like the one in southeastern Minnesota have been enabled by earlier legislation. The MAGIC Act would liberate local governments somewhat from state strictures as they restructure the way they deliver services, said Jim Mulder, a former executive director of the Association of Minnesota Counties who’s worked for years on the redesign issue. He said the current policy puts a misguided emphasis on micromanaging local governments as they go through the process.

“[The Legislature] has to quit seeing themselves as the managers,” Mulder said. “They need to focus on, ‘What’s our vision and what are the goals we are trying to achieve?’ rather than legislating process. If they did that, that would encourage innovation at the local level. So much of what’s happened at the Legislature and the state departments is [that] they are trying to dictate process.”

Mulder is now working on a doctoral project in public administration at Hamline University that focuses on government redesign, and he teaches classes at the University of St. Thomas. He has watched with some disappointment as eight counties split from the original merger plan.

“I think their leadership was very, very good,” Mulder said. “But they didn’t solve some of the basic problems early on about how you decide who is going to pay and who makes decisions. When it came down to it, people had a hard time being flexible or look for creative ways to make some of those decisions.”

One of the key factors in the plan’s downfall was the departure of Olmsted County, which is home to the city of Rochester and to a vast amount of the most valuable property in the original 12-county area. While Olmsted County is pursuing its own path, Mulder said, it’s possible that other counties will contract with the service delivery authority that it’s independently planning to create. And that, he says, could lead to a larger consolidation of human services delivery after all.

“If [Olmsted County officials] start moving in that direction and they start implementing it, there will be an opportunity, I think, for other counties to join them,” Mulder said.

To encourage successful redesign efforts, the state needs to dangle some carrots in front of local governments in the form of startup grants, according to Rep. Paul Marquart, a DFLer from Dilworth and a co-chair of the redesign caucus. The state used to give grants to help local governments merge operations, but that money was cut in 2002.

“It’s kind of unknown territory, and politically [mergers] can be a tough sell to residents,” Marquart said. “So the state has to put something in place that covers at least the short-term financial increases that might occur and do other things to put more power in their own hands on how they’d like to design some sort of service cooperative.”

4 Responses to “County merger project disappoints”

1. Dan Arms Says:
   September 27th, 2012 at 11:10 am

   Rochester is in Olmsted County – not Olmstead.

2. Bob Bendzick Says:
   September 27th, 2012 at 1:40 pm

   The average property tax capacity per capita of the non-Olmsted counties was 98% of Olmsted’s. It’s not a case of wealth. It’s a case of citizens’ choices and regional center needs versus less populated county needs. The project was a success because a lot was learned and some joint efforts will come of it.

3. Ray Marshall Says:
   September 27th, 2012 at 4:46 pm

   At one time many townships had 12 year, 1 or 2 room schoolhouses. The state legislature around the turn of the 20th century or so created the current system with merged the smaller rural school districts into the Independent School districts.

   This should be done with the counties today and maybe merge adjacent municipalities too, particularly in the larger metro areas (Twin Cities, Duluth, Rochester, St. Cloud, Moorhead, etc).

4. Blair Tremere Says:
   September 29th, 2012 at 6:29 pm

   The first step for all parties is to educate themselves about fundamentals: ALL local jurisdictions are creations of the state and are not, as some local officials believe or would have their constituents believe, sovereign. The Legislature does have a supervisory and even commanding role in what could be seen as a parent-child relationship. Leaving modernization to the kids without decisiive direction results in the chaotic and failed efforts experienced by the consortium. It is indeed tough love. A good start would be to revisit the legislation proposed by former Rep. Dave Bishop [incidentally of Rochester] around 2000. Ray Marshall has the right compass, too.