Amalgamation discussions are in the air, and you can feel the buzz beginning to build.
Let’s suppose a referendum is held and more than 50 per cent of us agree we should consider municipal amalgamation. Emotional appeals will be made to move quickly to amalgamate, countered by those asking us to shelve the whole idea. We need to be able to look beyond posturing and make our decisions based on facts. Understanding the complications that arise in amalgamating is a good place to start.
Intuitively, amalgamation makes all the sense in the world, but that won’t matter in the least unless it actually achieves lower taxes, better services and more streamlined regulation.
There are vested interests both for and against amalgamation. We’ve already heard from disaffected business owners and concerns over dysfunctional city councils. From the “let’s keep things the same” quarter we hear what a great job public-service unions are doing for us and more critiquing of the Victoria-Esquimalt police merger. As voter interest begins to build, the letters section of the Times Colonist should make for gripping reading.
Combining forces can deliver great value. Exxon Mobil and Disney Pixar are two examples. But in two landmark studies on amalgamation, Pricewaterhouse Coopers and McKinsey each concluded that fewer than one in three amalgamations met the objectives that were set going in. A high percentage ended up colossal failures. If tough-minded private-sector types, with incentives to succeed, can’t make things work, then what chance do inexperienced politicians have?
Municipal mergers in Toronto, Winnipeg and Halifax saw increased costs on a year-over-year basis. To this day, Toronto Mayor Rob Ford, whose job it was to reduce a bloated “post amalgamation” city hall budget, has been shown to have accomplished little.
We can do better. An amalgamation of municipalities in the Capital Regional District does not have to fail. If it is going to work, it’s important that a few basic rules be followed.
We’ll need to know what it will cost to amalgamate. Will our taxes be reduced? How much and by when? Which services will be improved? Will regulations be streamlined without being weakened?
Success can’t be assumed. Anyone who argues that you can complete an amalgamation agreement and then figure out how to make it work just hasn’t had very much experience combining organizations. Tough decisions will be needed, and it is imperative they be made up-front and acted upon quickly.
Successful amalgamations are based on the premise that there is not much more than a six-month window to make all key appointments and firing decisions, put new policies and bylaws in place, determine which administrative systems are going to be used and which collective agreements will remain in force. Organizations that can’t get these decisions made and implemented soon after the amalgamation inevitably bog down and can’t deliver the services they are mandated to deliver.
It’s at that point resolve weakens, the process of getting the new organization functioning effectively stops and the opportunities to make the cost savings and service delivery changes are lost.
A new culture has to emerge, and there will be winners and those who will lose out. Although rational people will accept that change is needed, there will be those who will fight it and do what they can to undermine any progress.
Voters cannot inhibit the council put in place to oversee the amalgamation. That’s why it is so important that the decision to amalgamate have broad public support. Those who are put in charge must make decisions. Similarly, council must give management the ability to act and hold them accountable to deliver promised results, on time and on budget.
The decision to amalgamate is one of the most important we’ll be asked to make. I, for one, hope we have the opportunity to examine whether or not an amalgamation will benefit us. But let us not make the same mistakes other municipalities have made. We as taxpayers can do a great deal to contribute by demanding that we are given clear, well-researched information, not just on the benefits of amalgamating, but how the results promised will be delivered.
If we have the right information, we can then decide whether we should stand pat, or support amalgamation.
Douglas Enns is president of Upturn Consulting. During his career, he has overseen several mergers and acquisitions. He is the past CEO of Pacific Coast Savings and led the company through the merger from which it was created to become one of Canada’s 50 Best-Managed Companies.
