Misleading DOS report:

The NYS Department of State, Local Government Efficiency Program, Annual Report 2008-2009 makes a variety of claims about how the program is improving local government efficiency. As an example of a successful "municipal mergers, consolidations, and dissolutions" (p.5) it cites Batavia, NY.

"IMPACT EXAMPLE:

City of Batavia/Town of Batavia
Annual cost savings: $943,000
Percent of combined tax levy: 19.5%
Annual household tax savings: $107.25

The City of Batavia in Genesee County initiated a municipal consolidation study with the Town of Batavia. The City had been running deficits and the property tax hikes needed to cover them were becoming excessively burdensome. The study found a net cost savings of almost $1 million could be achieved by consolidating the Town into the City. This could be accomplished by amending the City’s charter to establish tiers of taxation to alleviate concerns about the loss of City services and City debts being shifted to Town taxpayers."

Unfortunately the claim above is seriously misleading. The study from which these numbers were taken actually shows the following.  (All numbers on a per year basis.)

Savings due to efficiency: $212,000 plus about $33,000 in savings from an anticipation note financing reduction. However, of this amount, $104,000 would be a shift of court operation costs from the town to the state, so the actual efficiency savings is $141,000.  Loss of court revenues would be $20,000. There would be an increased cost of $72,000 to normalize employee compensation. The state would provide AIM incentive funding of $790,000.

The arithmetic to get to the DOS claim of "savings" of $943,000 is:

Efficiency savings: $141,000 + Cost shift to state: $104,000 + Addition state funding (AIM incentive): $790,000 - Loss of court revenues: $20,000 - Adjustment to normalize employee compensation: $72,000 = Cost "savings" of $943,000.

However, notice the following distribution:

• Savings: $49,000  (which is $141,000 - $20,000 - $72,000)
• Cost shift: $84,000 (which is $104,000 shifted to NYS, but increased State court revenue of $20,000)
• Additional NYS AIM spending: $790,000

There is no "savings" of $943,000.  In actuality, there is a projected net increase in government spending of $741,000  (which is $790,000 - $49,000).

While it is true the citizens of Batavia would see a reduction in their expenses, this reduction comes primarily from shifting cost and increased NYS spending.  

It does not seem fair, to me, for the DOS to claim an improvement in government efficiency when net government spending increases by $741,000/yr.

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