Merger Mania: The Assault on Local Government

184 Pages·2000·9.719 MB·English

by  Andrew Sancton

te assault on local government
Andrew Sancton
Published for the City of Westmount by
McGill-Queen's University Press
Montreal & Kingston • London • Ithaca
© Copyright 2000. All rights reserved. No part of this book may be
reproduced in any form (except by a reviewer) without permission from
the City of Westmount.
ISBN 0-7735-2140-2 (cloth)
ISBN 0-7735-2163-1 (paper)
Legal deposit second quarter 2000
Bibliotheque nationale du Quebec
Printed in Canada on acid-free paper
McGill-Queen's University Press acknowledges the financial support of the
Government of Canada through the Book Publishing Industry Development Program
(BPIDP) for its activities. It also acknowledges the support of the Canada
Council for the Arts for its publishing program.
Canadian Cataloguing in Publication Data
Sancton, Andrew, 1948-
Merger mania: the assault on local government
Includes bibliographical references
ISBN 0-7735-2140-2 (bnd)
ISBN 7735-2163-1 (pbk)
1. Annexation (Municipal government)
2. Annexation (Municipal government) - Case studies
3. Municipal government. I. Title
JS78.S26 2000 320.8'59 COO-900292-8
Available in French under the title
La Frenesie des fusions: une attaque a la democratie locale
ISBN 0-7735-2165-8
ACKNOWLEDGEMENTS
T his book was commissioned by the city of Westmount, Quebec during
a time of considerable controversy about municipal boundaries in the
Montreal area. As a contribution to the public discussion, I was asked to
write about municipal amalgamations in Western democracies. Because
many such amalgamations - most notably in Toronto - have recently been
extremely topical in Ontario, the experience in this province receives
considerable attention. My hope is, however, that the book will also be of
interest to readers outside Quebec and Ontario who are concerned about
preserving and improving systems of local government in which locally-
elected councils can help determine what happens in their own local
communities.
The structure, form, and content of this book are mine. In some parts,
the subject matter is relatively new to me. In others, I have written about
matters with which I was more familiar. The new parts - mostly historical -
have enabled me to approach this subject in the most comprehensive way I
know how.
Mayor Peter Trent of Westmount launched this project with a telephone
call many months ago. Ever since, he has acted like a good editor for an
academic publishing house: always ready with suggestions and ideas, but
never insisting on one particular direction; always constructively critical, but
never getting in the way of what I wanted to communicate. So concerned
was he that this be a credible contribution to an important debate that he
asked Professor Jean-Pierre Collin of the Institut nationale de la recherche
scientifique - Urbanisation to act as an external reviewer. Professor Collin's
thoughtful review helped me to avoid a number of errors, to clarify points
that were unclear, and to learn about some important sources with which I
was not previously familiar.
At city hall in Westmount, I received the friendly administrative support
of Bruce St. Louis, the city's director-general. Marie-France Paquet,
manager of legal services and city clerk shared with me her remarkable
collection of materials from around the world about municipal
amalgamation. Andrew Ross, research assistant, helped me track down a
number of important items and shared in the work of constructing the table
showing the number of municipalities in various American metropolitan
areas. Luc Menard, Director of Finance, generously shared his insights.
Ann Moffat and the Westmount Public Library staff gave freely of their time
and finally, my thanks to Marie Jose Aubertin for her support.
Lionel Feldman, president of Lionel Feldman Consulting Ltd., assisted
me with Chapter 5 on Toronto's "Megacity." Our frequent conversations
about this chapter and other aspects of the project were always helpful and
reassuring.
This manuscript was written at my home in London during a much
appreciated sabbatical leave from the University of Western Ontario. My
family - Pam, Rebecca, and Derek - put up with papers spread over places
where they could, in more normal circumstances, walk unimpeded. They
also tolerated a husband and father who was often more distracted than
usual. Thank you all for your patience.
While in Westmount to discuss the project, I stayed with my parents,
John and Mary Sancton, sources of much personal inspiration, intellectual
and otherwise. I have absorbed my father's views on the subject of this
book since I was a teenager. Only later did I learn that they were consistent
(but not congruent) with the theoretical framework known as "public-
choice," a subject I discuss in Chapter 3. A complementary intellectual
influence is the work of L. J. Sharpe, my mentor (and Lionel Feldman's) at
Oxford University. Jim Sharpe's approach to local government is decidedly
not rooted in the assumptions of "public choice," nor do I think is mine.
I make use of "public choice" analysis because it has been so influential
in the United States and because I believe it helps counter the outlandish
claims - often from people who say they believe in the innovative benefits
of competition - that huge monopolistic municipalities will be more efficient
and effective than a number of small ones. To glimpse my own strongly
held views on why "merger mania" is wrong, I refer the reader to the last
chapter of this book, especially the last paragraphs. I am much more
interested in building institutions that enable citizens collectively to control
some aspects of their lives outside the structures of huge governments (be
they federal, provincial, or municipal) than I am with measuring efficiencies
in local service delivery. If this makes me a hopelessly old-fashioned,
idealistic liberal, than so be it.
Despite the city of Westmount's commission of this study, the contents
and opinions expressed in it are mine, and I alone take full responsibility for
them.
Andrew Sancton
London, Ontario
February, 2000
TABLE OF CONTENTS
Summary 7
Introduction 21
1. Municipal Amalgamation in the United States, 1854-1942 25
Consolidation in Philadelphia, 1854 27
Consolidation in New York, 1898 30
The consolidationist retreat 36
2. The Era of Big Government: The 1960s and 1970s 41
Great Britain 42
Metropolitan Toronto and Ontario's Regional Governments 46
Laval, Quebec 51
Winnipeg 57
Europe 63
3. The Decline of the Consolidationist Movement in the
United States, the Emergence of "Public Choice," and
the "New Regionalism" 69
Municipal Consolidation in the U.S. Since 1945 70
Public Choice 74
New Regionalist Approaches in the U.S 78
4. Amalgamations in the 1990s 83
New Zealand 84
Australia 85
Great Britain 87
Nova Scotia 89
Ontario 101
5. Toronto's Megacity 113
The Golden Task Force 115
The Harris Conservatives and Toronto's Megacity 117
Staffing Issues 123
Financial Implications 125
Governance 136
6. More Change in Ontario: Ottawa, Hamilton, Sudbury,
and Toronto (Again) 141
Restructuring Controversies Prior to 1999 142
The Special Advisors 144
The Fewer Politicians Act, 1999 154
Conclusion 161
Bibliography 169
SUMMARY
MERGER MANIA: THE ASSAULT ON LOCAL
GOVERNMENT
T he purpose of the report is to analyse the advantages
and disadvantages of municipal amalgamations, provide
a historical perspective of such amalgamations, and examine how these
experiences apply to the city-region of Montreal. The distinct
characteristics of the cities studied indicate that any attempt to define one
ideal size of a city-region or one ideal form of governance would be
doomed to failure. Relatively small city-regions may benefit from
amalgamation. Larger regions may need amalgamation of major services
such as sewage treatment and public transit, but smaller municipalities
provide better community services such as recreation. For city-regions the
size of Montreal, amalgamation is not a likely solution. For good reasons, a
single municipality stretching from Mirabel to Chambly and from Vaudreuil
to Repentigny is not on anyone's agenda.
Apart from a few politicians and some public servants concerned with
municipal affairs, few serious thinkers in recent years have considered it
desirable to reduce the number of municipalities within city-regions.
Although the consolidationist debate dates back to the 19th century, there
is little contemporary support for a public policy of forced municipal
amalgamations. In the past few decades, policies of "public choice" and
"new regionalism" have largely supplanted the consolidationist approach.
The report examines these trends from the first, consensual merger in
Philadelphia up to the recent forced mergers in Nova Scotia and Ontario.
The final chapter looks at these issues in relation to the city-region of
Montreal.
7
MERGER MANIA: THE ASSAULT ON LOCAL GOVERNMENT
1. MUNICIPAL AMALGAMATION IN THE UNITED STATES, 1854-1942
Current debates in Canada about municipal amalgamations frequently
cite American references, both positive and negative, and indeed the
United States has had some influence on the structure and practice of local
governments in Canada. It is important, however, to remember one big
difference - American municipalities enjoy constitutional protection from
coercion by state governments. A municipal corporation in the United
States is created mainly for the interest, advantages and convenience of
the locality and its people. American cities grow by annexing
unincorporated areas within their counties and no solvent American
municipality has been forced, against its will, to lose its status and join
another in almost 100 years. The amalgamations of distinct municipalities
that did occur did so following approval by referendum. The two most
dramatic examples are Philadelphia and New York.
The amalgamation of Philadelphia, in 1854, involved the merger of an
entire county and all its municipalities. In institutional terms, it was not
unlike the recent merger of Metro Toronto and its six constituent
municipalities. Conceived in response to a serious social problem - the
breakdown of law and order - amalgamation enjoyed considerable support
among the political elite. Despite great optimism that the amalgamation
would yield many benefits, it actually only addressed the policing problem.
Otherwise, bigness brought weakness and corruption rather than
imagination and quality of service, and did nothing to stop Philadelphia's
economic decline.
The most significant municipal consolidation ever undertaken in North
America was New York's in 1898. In that year fifteen cities and towns and
eleven villages in five separate counties were merged to form the new city
of New York, with a population of 3.5 million. New York was already a major
world city, and a century later it is the world's paramount economic centre.
Manhattan has remained a home base for the world's rich and famous, but
the other municipalities, such as Queen's and the Bronx, did not fare so
well.
The movement for consolidation in New York was spurred by some
business interests concerned that the city's economic growth was not
keeping pace with that of more westerly cities, notably Chicago. They
believed that "if a single municipal government could gain control over New
York harbour and all the surrounding territory, it could promote the unified,
comprehensive development of shipping, railroads, and related facilities in
such a way as to aid both merchants and property owners." One proponent
8
SUMMARY
insisted that "New York was in competition with London, Paris, Chicago,
and even Brooklyn... and all these had grown by increasing their
boundaries; consolidation would enable the city to hold its own" - a
debatable claim akin to today's global competition cliches.
In 1894, the New York State legislature enacted a law providing for a
referendum on consolidation. The greatest opposition came from the city of
Brooklyn where anti-consolidationists were concerned with identity and
local control, though pro-consolidationists in Brooklyn argued that a share
of Manhattan's tax base would lower Brooklyn's tax rates and provide better
services. The prospect of a tax grab by Brooklyn, in turn, stirred opposition
in Manhattan. In any event, the referendum carried in all the counties, but
only by a vote of 64,744 to 64,467 in Brooklyn.
Amalgamation in New York did not save money. In the ten years
following consolidation there was a sharp upward trend in expenditures and
funded debt. Budget appropriations for the city increased from $78.4 million
in 1898, to $98.6 million in 1903, and to $130.4 million in 1907. Between
1896 and 1899, tax rates in Manhattan went up by about sixteen per cent,
due largely to consolidation.
During the 20th century there was significant public investment in New
York's infrastructure - especially for transportation - but most planning and
investments came from a remarkable network of special-purpose
authorities that transcended the city's boundaries (the New York State
Metropolitan Transportation Authority and the Port Authority of New York
and New Jersey).
A century later, New York is by far the most populous municipality in the
United States with a population twice the size of its old rival, Chicago, and
comprises fully half of the greater New York City region compared to
Chicago's one-quarter of its region. Yet it was New York that was bankrupt
in the mid-1970s, not Chicago.
Since 1898, there have been no more comprehensive legislated
municipal amalgamations in the United States. In most states such
legislation would violate the state constitution. At a minimum, popular
approval through referenda in affected municipalities would be required.
2. THE ERA OF BIG GOVERNMENT: THE 1960s AND 70s
After 1945, there was great faith in the ability of government to solve
problems. Part of this government-centred solution involved "modernizing"
9