[All] KW Merger: Facts on why it's not a good idea.

[Louisette Lanteigne]

Hi folks
I created a webpage which I've shared with several candidates regarding the Kitchener - Waterloo merger issue. I did my own preliminary research on the matter and compiled a summery of the findings that can be viewed here:

http://waterloomoraineact.com/costsofmerger.htm
Along side what was on the net, I have another report re: costs per capita increases due to amalgamation with figures reflecting various mergers across Canada that can be seen here: 
( I can't get the links to PDF reports working in my emails due to the new web browser I'm trying out but if you cut and past the URL and you'll get there.)
http://www.fcpp.org/pdf/FB%2022%20Reassessing%20Local%20Government%20Amalgamation%20FEB%2004.pdf

When it comes to costs and mergers, the main issue is scale. The bigger the municipality, the larger the demographics of servicing is needed and this reduces the pool of companies that municipalities can selecting from when providing municipal services. The larger companies tend to merge with area firms creating a monopoly and these larger firms tend to take full advantage of municipalities. The 20-30% increase in taxes is a fiscal demographic arguement not limited to the concept of mergers but certainly relevant. For example, U.S. cities of more than one million population spend 21 percent more per capita than the cities with 500,000 to 1,000,000 residents, 18 percent more per capita than cities with 100,000 to 500,000 residents and 13 percent more than the average city  To view one quick Chart titled US City Expenditures per Capita by Size visit this
 weblink: http://www.google.ca/imgres?imgurl=http://www.publicpurpose.com/tor-wcc3.gif&imgrefurl=http://www.publicpurpose.com/tor-demo.htm&usg=__3bOQB5A1cmI-ZlyTcVEaFDxJDvU=&h=268&w=313&sz=5&hl=en&start=1&um=1&itbs=1&tbnid=6o9a0_shQY4L8M:&tbnh=100&tbnw=117&prev=/images%3Fq%3Damalgamation%2Bcities%2B20%2525%26um%3D1%26hl%3Den%26rls%3Dcom.microsoft:en-us:IE-SearchBox%26rlz%3D1I7IRFA_en%26tbs%3Disch:1 What we need to do is focus the view on our current population and municipal financing numbers per capita on topics folks can relate too: waste management, schooling, library services etc.  A merger will basically "increase"  the population artifically so if we examine the economic per capita numbers from cities that have a population equal to a Kitchener and Waterloo city combined, we can create our fiscal arguements from there. This next report is a handy one. It shows a basic example of a cost issues associated with mergers on page 15 ( or
 page 21 of the PDF report) featuring the section regarding waste management. It's a common service that folks can relate to. Check out the costs of this service for small vs. Larger municipalities and observe how complicated the service becomes the bigger the city gets.  http://www.cdhowe.org/pdf/bish.pdf. 
Now if you recall the inconvience of the Toronto Garbage strike, you can see how quickly these issues can get out of controll. The bigger the city, the bigger the firms involved, the more potential impacts from labour disputes etc. Smaller cities, more flex, less problems and costs.
Taxpayers need to clearly understand that a merger will increase their tax base should they want to merger. Study after study proves it. The data is evident not only among merger documents but in many general studies comparing the basic costs differences of larger and smaller municipalities. Contracting firms know the tax base is larger for bigger municipalities and the price difference of their contract jobs reflects this.

In spite of the overwhelming amount of data showing smaller cities are more cost effective there apparently is no shortage of pre-merger promises from companies itching to profit from a merger. They state that costs will be reduced but the data to support these claims simply doesn't exist when examining the per capita tax base. 
One of the most alarming examples of mergers that didn't pan out is the City of Toronto. They're getting buried in debt. Here is the latest report regarding their situation that was released in Feb 2010. 
 http://www.irpp.org/po/archive/feb10/schwartz.pdf
Right now 80% of Canada's infrastructure needs to be replaced over the next 20 years, so a municipality, it is absolutely vital we take the long term view in order to keep costs down.  Smaller cities means more competition among bidders and more flex for municipalities and in the end, this creates the kind of economic resilience we need in order to maintain a reasonable tax base while maintaining our current quality of life.  
In the attachment is a correspondence I received from Minister Bradley (MInister of Municipal Affairs and Housing)  for your reference regarding the merger question basically stating the vote is non binding etc. 
I just wanted to bring everyone up to speed on these concerns and I encourage people to send a copy of this email to various candidates for consideration. The more folks aware of these issues the better!
Louisette Lanteigne
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