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Not all government consolidations work

Updated: October 15, 2013 1:06PM



Most reform groups and editorial page writers are strong proponents of government consolidation, and for obvious reasons: When it’s done right it saves money and improves efficiency.

And the sheer magnitude of government in Illinois — we have more than 7,000 separate taxing bodies, most in the country by far — cries out for consolidation.

But merging services can have unintended negative consequences when new sources of money and power end up in the wrong hands, creating new opportunities for abuse.

Case in point:

Lyons Township has a school treasurer’s office responsible for managing and investing more than $200 million in tax money for 13 public school districts in the west suburbs.

The purpose of the office is commendable: centralize financial services so the school districts don’t have to hire their own people.

But a BGA investigation found that the ex treasurer Robert Healy had deep political connections but no discernible financial expertise.

And with little oversight by the agency’s elected board or the school districts, Healy improperly cashed in unused sick, vacation and personal days; hired friends as consultants; operated with no budget, and allowed investments that may have violated state law.

He was recently charged with two felonies for allegedly embezzling more than $1.5 million from the treasurer’s office over the past two decades.

This is one consolidation that clearly ran amok.

Another merger in the western suburbs also gave us cause for concern, though not in a criminal context.

As of Oct. 1, the Village of Willow Springs eliminated its part-time fire department and contracted out fire and emergency medical services to the nearby Tri-State Fire Protection District, in what was sold to Willow Springs’ residents as a cost-savings move.

That might not be a bad move, in theory.

But a review of Tri-State’s track record makes us wonder whether, in practice, it’s good for taxpayers.

A three-person board governs the district, which levies its own tax and provides fire and EMS services to parts of Burr Ridge, Darien, Willowbrook, unincorporated DuPage County and, now, Willow Springs.

One of those elected board members, Jill Strenzel, is the long-time domestic partner of Tri-State’s fire chief, Michelle Gibson. The two live together and formed a civil union last year.

As a Tri-State trustee, Strenzel has voted for generous pay raises and other perks since Gibson became chief in 2008, which looks like an obvious conflict of interest.

And under Gibson’s watch, the district has been burning through taxpayer money with a number of questionable purchases, including steak and lobster dinners; excessive bonuses and overtime; new Ford Expeditions; and legal bills that, from 2007 to 2012, jumped from about $13,000 annually to more than $100,000, according to documents obtained under the Illinois Freedom of Information Act.

Along with the pro bono help of the financial advisory firm Duff & Phelps, the BGA found that Tri-State’s general fund expenditures increased by 24 percent from 2008 to 2012, compared to the years 2003 to 2007, when expenditures actually went down 2 percent.

Overall, Tri-State’s general fund spending exceeded its revenues by more than $2.7 million from 2008 to 2012.

So the question is obvious: Should the district be expanding and taking on more responsibilities when its own financial house isn’t in order?

What’s more, Tri-State and Willow Springs hastily approved a three-year agreement and Tri-State effectively shut down its station in Willowbrook, and shifted staff and equipment to the Willow Springs firehouse, with little notice to residents or employees.

Willow Springs’ residents were told this would save tax money, but it’s putting a bigger burden on Tri-State residents in the short run, and that could mean higher taxes in Willow

Springs in the long run, according to interviews and a copy of the consolidation agreement.

Bottom-line: Consolidations are important reform steps when they’re executed properly. But public officials have to approach them cautiously and thoughtfully.

Because efficiency talk is cheap. But doing it poorly is expensive. For us, the taxpayers.

Andy Shaw is president and CEO of the Better Government Association.

Email: ashaw@bettergov.org

Twitter: @andyshawbga



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