Rethinking Municipal Service When Facing Declining Population and State

Budget Unpredictability

Tuesday, February 28, 2020

Co-hosted by the Chaddick Institute for Metropolitan Development

Illinois Municipal Policy Journal

Upcoming IMPJ Author Webinars

Wednesday, February 5, 2020 from noon to 1 p.m.• “Effective Municipal Strategies

to Eliminate Lead Service Lines”• Caroline Pakenham at Elevate

Energy • Nora Beamish-Lannon at DePaul

University• Stephen Beavis at DePaul

University

Thursday, February 20, 2020 from noon to 1 p.m.• “How Changing Public Opinion

and State Preemptive Policies Affect Municipal Policy Options”

• John S. Jackson at Southern Illinois University

• Nestor Davidson at Fordham University

• Laurie Reynolds at University of Illinois

Rethinking Municipal Service When Facing Declining Population and State

Budget Unpredictability

Tuesday, February 28, 2020

Co-hosted by the Chaddick Institute for Metropolitan Development

Nick Kachiroub

as

Joseph Schwieterma

Setting the StagePromoting Government Efficiency in

the midst of Flat or Declining Population

Joseph Schwieterman

Municipal Policy Webinar SeriesPresented by Chaddick Institute, DePaul University

January 28, 2020

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Reasons for optimism

- Push to enhance efficiency generally bridges the “party divide”

- “Low-hanging fruit” readily available

- Springfield’s dysfunction is ebbing

- Metro Chicago agencies/counties have more cooperative spirit

On the bubble: What happens to an Illinois Municipality when its population drops

below 25,001?

Nick KachiroubasMunicipal Policy Webinar Series

Presented by Chaddick Institute, DePaul University

January 28, 2020

A review of Home Rule Powers in Illinois

“A County which has a chief executive officer elected by the electors of the county and any municipality which has a population of more than

25,000 are home rule units. Other municipalities may elect by referendum to become home rule units. Except as limited by this

Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs including, but not

limited to, the power to regulate for the protection of the public health, safety, morals and welfare; to license; to tax; and to incur debt. (Ill.

Const., art. VII, sec. 6a, 1970)”

Post 1980 Census

CEN

SUS

YEAR

MU

NIC

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VOTE

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1980 Dolton 11/3/81 N U U

1980 Elmwood Park 3/18/80 U 4,976 1,947

1980 Evergreen Park 3/16/82 A 3,647 382

1980 Morton Grove 318/80 N 2,031 5,863

1980 Rantoul 11/2/82 A 2,069 397

1980 South Holland 11/3/81 N 555 4,628

1980 Villa Park April 1981 U U U Y

Post 1990 CensusCE

NSU

S YE

AR

MU

NIC

IPAL

ITY

REFE

REN

DUM

DAT

E

BALL

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1990 Park Forest 3/17/92 A 3,671 1,046

Post 2010 CensusCE

NSU

S YE

AR

MU

NIC

IPA

LITY

REFE

REN

DU

M D

ATE

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2010 Edwardsville 11/6/12 A 9,362 1,353

2010 Homer Glen 11/6/12 A 8,368 2,885

2010 Maywood 11/6/12 N 3,458 5,128

2010 Westmont 11/6/12 N 4,560 4,314 Y

2020 “on the Bubble” Projections

Municipality2010 Census Population

2018 Census Population

Estimate

2020 Census Projection

Belvidere 25,585 25,194 25,145

Carbondale 25,902 25,376 25,326

Collinsville 25,579 24,621 24,573

Freeport 25,638 23,920 23,873

Harvey 25,282 24,641 24,593

Kankakee 27,537 26,052* 25,206*

Melrose Park 25,411 24,925 24,876

Norman Walzer Andy Blanke

Rethinking Local Services DuringPopulation and State Budget Uncertainty*

Norman Walzer and Andy Blanke

Municipal Policy Webinar SeriesPresented by Chaddick Institute, DePaul University

January 28, 2020

*The Governor’s Rural Affairs Council funded the LEAP guidebook and database development.

Presentation Overview• Major Issues Involved

• Most Non-metro Counties (53 Of 66) will Lose Population in Next Decade• Projected Growth in Elderly will Change Services Needed• Smaller School Age Population• Population Declines may mean Unnecessarily Complex Government Structure• Shrinking Populations Mean Higher Per Capita Property Taxes

• SALT Limits Raise Net Burden• Property Taxes May Increase Outmigration in Border Counties

• Local Efficiency Assessment Plan (LEAP)—Approach to Collaboration• Options For The Future

Projected Population Changes 2015-2025

Source: Illinois Department of Public Health.

Net Migration Rate, 2010-2017

Source: U.S. Census Bureau, Population Estimates Program, 2010-2017.

Contributing Factors to Rising Costs & Taxes• Less State Support for Local Services e.g., Schools • Rising Pension Contributions• Unfunded Mandates Increase Costs• Relative Ease in Creating Governments

• Bond and Debt Limits• Large Number of Overlapping Governments• Hard to Remove Existing Governments*

HB 348 signed by Gov. Pritzker allows referendum in McHenry County to dissolve townships and transfer assets/responsibilities to county government effective immediately.

29

No. of Governments in 2017

Source: U.S. Census Bureau, Census of Governments, 2012-2017.

County Type County MunicipalitySchool District

Special District Township Total

Illinois Total(Change in No. Since 2012)

102 1297(-1)

886(-19)

3204(-23)

1429(-2)

6919(-44)

Nonmetro, Population Below 10,000 15 78 20 137 78 328

Nonmetro, Population 10,000-24,999(Change)

29 217 110 (-7)

561(-5)

346(-1)

1263(-13)

Nonmetro, Population 25,000-49,999(Change)

16 226 127(-7)

567(-2)

279 1215(-9)

Nonmetro, Population 50,000+ (Change)

8 107(-1)

76(-2)

275(-2)

155 621(-5)

Metropolitan Counties(Change)

34 669 553(-3)

1664(-14)

571(-1)

3491(-17)

Possible Approaches • Statewide Mandate to Eliminate Governments• Short Term Approach

• Cost-Accounting Analysis of Mergers, Consolidations, or Sharing• Pre-identify possible cost-savings• Merge, consolidate or eliminate specific governments no longer necessary

• Intermediate ApproachExamine Changes in Services Needed and Look for Efficiencies• Form a Local Efficiency Assessment Planning (LEAP) team• Examine expected population changes, expenditures, and revenues• Use internal capacity of current agencies to find more efficiencies• Implement action plan to streamline local delivery arrangements to meet needs for

public services

Reform Efforts in Other States

Skinny Ohio initiative• Publishes successful examples of collaboration & consolidation• Local gov’ts report the cost savings of reform efforts• ShareOhio web portal matches local governments looking to share or use

equipment

Municipal Restructuring Fund in New York• Grant funding for consolidation/collaboration projects that reduce

property taxes• 30 projects have been funded as of 2018, including shared policing, health

insurance consortia, eliminating a village gov’t, etc. (2019 report unavailable)

Local Efficiency Assessment Plan (LEAP)

Source: Guidebook for Modernizing Local Government Structure, GRAC and CGS, 2019.

The LEAP Process• Demographic & Economic Forecasts

• Fewer residents in future are likely• Declining number of jobs• More elderly population

(Independent sources can provide more data, e.g.. IDPH & IDES)• Assess Adequacy of Local Resources

• Economic base• Revenue structure and services needed• Local management expertise to assess efficiency options

• Current Local Arrangements • Examine current operations and partnerships• Evaluate the capacity to provide services needed in future with smaller populations

The LEAP Process (cont.)

• Anticipate Service Needs & Costs• Given expected trends in population and employment• How will costs change and implications for property taxes

• Design Local Strategy to Meet Future Goals• Share services to realize cost savings and provide services needed in 2025

• Review Techniques and Verify Authority• Periodically evaluate for successes and opportunities for improvement• Implement structural changes as feasible and needed• Monitor effects on quality of public services

Local Government Efficiency Assessment Dashboard

• https://www.cgs.niu.edu/government-efficiency-assessment/index.shtml• Information available for countywide summaries (all governments within a

county), and individual units such as municipalities and townships. • Information is introductory and meant to inform discussions with local

managers. • User guide, for making selections (only 6 pages, mostly screenshots):

https://www.dropbox.com/s/3z4rncih84hv3xj/User%20Guide%20for%20Local%20Government%20Efficiency%20Assessment%20Dashboard.pdf?dl=0

How will spending levels need to change? • Adjust spending and property tax forecasts separately- e.g., rising costs while trying

to hold line on property tax• Increases in dependent populations -> need for additional spending• How would property tax need to change to meet those needs? • Consult with local managers to decide on a reasonable expected trend for

projections. 3% increase is a conservative default estimate.

Move sliders to adjust projections.

Values updatebased on slider bars.

What service adjustments are needed? • What service areas are driving costs? • Does the municipality have unique needs? • Are capital projects being deferred?

What revenue options are available? • Compare counties on reliance on revenue by source• Are user fees underutilized compared to other counties?• Can federal grants offset some project costs? • Is economic development needed to improve sales & income tax base?

What is the pension liability my municipality?

• Are police/fire pension funds improving? • How have liabilities changed compared to other communities?

What alternative service arrangements are available? • High density of special districts- potential for mergers or collaboration• Service delivery at township level vs municipal level will depend on local

needs and capacity

Intended Outcomes of Guidebook

• Action Plan for High Quality Public Services in 2025• Adjustments in Revenue Structure, as Needed• Evaluate Current Public Service Delivery Approach• Residents, Public Officials Engaged in Planning Processes• Consensus Among Local Participants for Changes, as Needed• Redesigned Service Delivery System Suited for 2025?

What’s Next?

• LEAP Database updates coming in Spring 2020. • 2019 Comptroller Data for individual units• 2017 countywide summaries from Census of Governments

• Personalized, no-cost online training available for LEAP Database tool, including screen share:

• Andy Blanke, 815-753-1569 or ablanke1@niu.edu

• Shared Services Journal- browse examples of successful collaboration already underway in IL. https://www.cgs.niu.edu/Reports/Index.shtml

Projected Change in Operating Expenditures Per Resident2017-2025*

Source: Illinois Department of Public Health & U.S. Census Bureau, 2017 Census of Government Finances.

*Projected 2025 expenditures = 2017, countywide, non-capital expenditures adjusted by historical trends in Municipal Price Index. 2025 population levels projected by IDPH.

Effective Property Tax RateResidential Property, 2018

Source: U.S. Census Bureau, American Community Survey, 2014-2018.

For More Information, Contact

NormanWalzer, Ph.D. Andy Blanke, MPASenior Research Scholar Research Associate 815-753-0933 815-753-1569nwalzer@niu.edu ablanke1@niu.edu

Center for Governmental StudiesNorthern Illinois University

148 North Third StreetDeKalb, IL 60115

cgs.niu.edu

Questions?

Rethinking Municipal Service When Facing Declining Population and State

Budget Unpredictability

Tuesday, February 28, 2020

Co-hosted by the Chaddick Institute for Metropolitan Development