News-Sentinel.com

A House Divided -- A four-day series on consolidated government

Day 1: County costs keep going up, and revenue keeps falling

By Kevin Kilbane of The News-Sentinel

When Allen County Council members sat down two weeks ago to plan the 2004 county budget, they first had to slash $7.7 million from this year's budget to keep the county out of debt.

Council members later ordered county officeholders to cut a combined $30 million from their 2004 budget requests. The cuts, which could result in the loss of dozens of jobs, will allow the county to keep treading water financially.

To be sure, the county is a victim of unusual circumstances: The poor local economy has eroded revenues while low interest rates have reduced investment income. But council members also blame the structure of county government, which they see as outdated and ineffective.

Over the next four days, The News-Sentinel will explore problems with the current structure of county government. We also will look at the potential pros and cons of a consolidated city-county government, an option more communities are choosing to meet their residents' needs.

The first indications of Allen County's financial crisis appeared early last year.

High unemployment, the elimination or relocation of high-paying jobs and, some say, state-level goofs meant a decline in receipts from the County Option Income Tax (COIT) and Community Economic Development Income Tax (CEDIT).

Allen County's COIT receipts will fall this year to about $11.4 million, a loss of $3.7 million compared with the previous year, Auditor Lisa Blosser said. COIT revenue likely will fall to $10 million next year. CEDIT receipts will total $8.4 million this year, or about $400,000 less than the previous year.

The loss of a job or a reduction in income also has caused more county residents to default on property tax payments, further reducing county income.

Allen County residents and businesses failed to pay more than $16 million in property taxes last year, a jump of about $2.6 million from the previous year, county Treasurer Bob Lee said. The total includes new delinquencies as well as those unpaid from prior years. The delinquencies cut about $900,000 from Allen County's portion of property tax revenues. The shortfall is double the delinquency total from last year.

Also, a state-ordered change in the way property is valued for tax purposes delayed issuance of property tax bills normally paid in May and November. To get some money flowing in, the state allowed counties to send out provisional tax bills, which are based on residents' 2002 tax bills.

Another problem has been interest rates, which tumbled to historic lows. The county expects interest income of about $1 million this year, Blosser said. It earned a high of $5 million a few years ago.

Revenue shortfalls are only one side of Allen County's financial equation, however. There are major costs increases as well.

By late this year, the county likely will open the new addition to the Allen County Jail and a new juvenile justice center, the latter replacing aged Wood Youth Center. The facilities will consume about $6.6 million annually in operating expenses, the auditor's office reported.

County officials estimate other costs, such as coroners' autopsies, spraying to control mosquito-borne West Nile virus and paying for county employees' health insurance, could vary this year anywhere from $280,000 to $1.1 million.

"To me, that is one of the major problems in the county: The costs keep going up and up and up, and the income is not there to cover them," County Councilwoman Margaret Ankenbruck said.

A statewide property-tax freeze prevents Allen and other counties from using tax increases to resolve their financial problems. The freeze limits Allen County to a 5-percent, annual increase in property tax revenue.

Language in the new state budget, however, allows the county to establish an additional tax to pay for court-ordered construction of the jail addition and juvenile justice center. Neither facility met national standards for inmate census and care.

County council members doubt creating another tax will solve the county's financial problems. But at a budget meeting Monday, they indicated keeping the county solvent probably means they will have no choice but to add $30 a year to residents' property tax bills.

(Tomorrow: A conversation with former Fort Wayne Mayor Paul Helmke, the county's most enthusiastic proponent of consolidated government.)

There's no reason we have to keep doing things the same old way

When County Councilman Cal Miller became that body's liaison to township assessors, one of the first things he noticed was an apparent duplication of efforts.

In Allen County's seven largest townships, residents independently elect a township assessor. Rather than work together and share personnel, those assessors each typically hire staff to set the tax value for homes, buildings and property in their townships.

"The potential for greater efficiency exists," said Miller, who believes those townships could share one pool of property assessors.

As county council works to dig the county out of financial crisis, Miller and other council members say the structure of county government remains one of the biggest obstacles to long-term stability.

"I think it is important to remember we are running on an 1800s government, and it is 2003," County Councilman Darren Vogt said.

The current structure of local government is based on the Indiana state constitution, which was adopted in 1851.

The state leaders who approved that document intended county government to provide services people had to have: Elections, property assessment for tax purposes, courts, a jail and law enforcement through the sheriff, said David Bennett, former head of Taxpayers' Research Association, a local organization that served as a watchdog on government spending.

People created city government to provide added services in urban areas, such as greater police and fire protection or water and sewer service, said Bennett, who now is executive director of the Fort Wayne Community Foundation.

(For more information on the origins of Indiana government, see tomorrow's installment.)

In the city, however, the mayor appoints most department heads. The mayor has the power to hire, fire and accept or reject departments' budgets, plans or recommendations.

In the county, residents independently elect 100 county and township officials. The county council has final say over a large portion of most county offices' budgets. But the offices technically operate independently of the council and county commissioners, the main governing bodies of Allen County government.

"If you don't want to do it, we can't force you," said Mike Cunegin, county council president. "That is the hard part of county government."

In addition, county courts possess the power to mandate, or order, the performance of certain tasks. Allen Superior Court judges, for example, ordered the county to build a new juvenile-justice center to replace aging Wood Youth Center.

"County government is structured so the power doesn't rest with any one person," said Matt Brooks, executive director of the Association of Indiana Counties in Indianapolis. The many elected offices serve as checks and balances on government power, Brooks added.

But the diverse responsibilities of county government can create problems, county council members said.

The county, for example, has little control over the number of people booked into the jail and sent through the local court system, Cunegin said.

Fort Wayne police can obtain a federal or state grant to run extra drunk-driving patrols, said Cunegin, a city police detective. But for each person the city arrests, the county must pay the costs of booking the person into jail, holding him in jail, prosecuting his case and processing him through the courts system. If the person doesn't have money to hire an attorney, the county has to pay a public defender to represent him.

"The burden (of cost) comes back not on the city, but the county," Cunegin said.

Fellow council member Margaret Ankenbruck holds a similar view.

"For large, urban counties like Allen, the current structure is cumbersome and can make it more difficult to deal with some problems," Ankenbruck said.

County council members said county offices must find ways to operate more efficiently.

"We are trying to emphasize more of a business approach to managing county government," new councilwoman Paula Hughes said.

County offices should explore ways to collaborate when two or more departments are doing similar work, Hughes said.

The Building Department and Assessor's Office, for example, collect similar data on properties. Rather than each office continuing to send staff to the same locations, the offices have begun developing a plan for building inspectors to share their data with assessors.

County officeholders also have been asked to identify areas where county services overlap with services provided by the city of Fort Wayne, Hughes said. Local residents may be better served if some city and county offices collaborate or consolidate to provide a service both governments now offer separately.

"Just because they are the way things have always been done, it doesn't mean it is the way we should keep doing them," Hughes said. "That is what got us into the financial crisis we are in now."

Neighboring Views

County council members have discussed restructuring Allen County government to make it more cost-effective and efficient. Here are two residents' thoughts on some of the ideas that could be proposed.

Greater consolidation is best the way to go

Name: Susanne Moorman
Age: 54
Occupation: General manager of community affairs, American Electric Power

Susanne Moorman believes greater consolidation of city-county government is "absolutely the way to go." Combining similar departments would make government more efficient and eliminate duplication.

For similar reasons, Moorman likes the idea of asking townships to share some personnel resources, such as property-tax assessors.

Moorman disagrees with reducing the number of county commissioners to one from the current three. "I think we would be losing the diversity we have now," she said.

Having a single commissioner could concentrate too much power in the hands of one person, she said. The job also could be redundant with that of the city mayor.

A proposal to change some elected county offices to departments with an appointed supervisor could result in better-skilled people getting those jobs, Moorman said. But the community would suffer, she noted, if the appointments became highly politicized.

In addition, she doesn't think moving county courts, sheriff and other justice-related departments to a separate tax levy will encourage people to scrutinize those offices' budgets any more closely than they do now.

It is important to leave no one out of process

Name: The Rev. Michael Latham
Age: 42
Occupation: Pastor, Renaissance Baptist Church

Closer cooperation between city and county would make for better government, but voter representation would suffer under one city-county government, said the Rev. Michael Latham.

Many county residents don't know what it is like being an ethnic or racial minority living in the city, said Latham, local NAACP president. Similarly, many city dwellers don't understand the needs of rural residents.

"It is very important nobody gets left out," he said. "There should be somebody speaking for you."

Latham would support reducing the size of county government, such as by consolidating small rural townships into larger geographic units or asking townships to share certain staff. He questions consolidating county commissioners, saying one person may not be able to do the work of three.

Latham, a critic of fees charged jail inmates, opposes placing the county courts, sheriff and other justice-system departments on a separate property-tax levy. Proponents say the change would give taxpayers a clearer picture of justice-system costs and how money is spent.

"They have to be accountable, but they have to be able to get the job done they are elected to do," Latham said.