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