Here is the Executive Summary of Urban Analytics cost-benefit study of consolidating McHenry Township with McHenry County:
In this report, the findings of a cost-benefit analysis of General Assistance services, Property Assessment services, and Road District services provided by the Township of McHenry, Illinois and the McHenry Township Road District (hereinafter referred to as “McHenry Township”) are presented.
There are many different methodological approaches to cost- benefit analysis.
The most common accounting approach is to simply measure the monetary benefit received from one dollar in cost incurred to produce that benefit.
However, in public finance, especially at the local government level, there are policy implications to public decision-making that do not easily lend themselves to an accounting solution.
While the cost to plow a mile of road after a snowfall or the cost to mow the grass in a park can be estimated easily, many programs such as public health and welfare programs have benefits to local residents that cannot be calculated easily in monetary terms.
Cost-benefit analysis, therefore, must balance the mathematical approach with the commonsense understanding of how local public services are provided.
As the cost to run local township and county governments and the cost to provide new or maintain existing public infrastructure (such as roads and public facilities) continues to increase each year, decisions made by elected officials, policy makers, township and county staff, and residents in general have consequential short and long term fiscal implications.
Financial Comparison between the County and the Township
• The findings presented in this report indicate that at the end of fiscal year 2016, for every $1.00 that the County spent in the provision of public services to its residents, the County received $0.99 in revenues;
• This small deficit of $0.01 remained the same for fiscal year end 2017 ($0.01) and increased slightly in fiscal year end 2018 to ($0.05);
• At the end of fiscal year 2017, for every $1.00 that the Township spent in the provision of public services to its residents, the Township received only $0.87 in revenues. This deficit of $0.13 decreased slightly at the end of fiscal year 2018 (to $0.12) but worsened by the end of fiscal year 2019 to $0.21 (or $0.79 in revenues received for every $1.00 the Township spent to provide public services);
• Alternatively stated, at the end of fiscal year 2016, for every $1.00 that the County received in revenues, the County spent $1.01 in expenditures to provide public services;
• This small deficit increased slightly for fiscal year end 2017 ($0.02) and increased a little more at fiscal year end 2018 to ($0.05);
• At the end of fiscal year 2017, for every $1.00 that the Township received in revenues, the Township spent $1.15 in expenditures to provide public services. This spending deficit decreased slightly for fiscal year end 2018 (to $0.14) but increased at the end of fiscal year 2018 to ($0.26); and
• These findings do not support the argument that McHenry Township is more efficient in the provision of public services than McHenry County.
General Assistance Program
• On a per-capita basis, McHenry Township spent $5.66 per person (per resident in the Township) to provide General Assistance (including Emergency Assistance) to those people in need in the Township;
• While it is commendable that McHenry Township has a very high commitment to providing General Assistance (including Emergency Assistance) to its residents, this per-capita expenditure in the Township is 2.72 times higher than the median average and almost two times higher (1.91) than the mean average when compared to 15 other townships in McHenry County;
• While the County does not provide the same type of services that the Township currently provides to its residents for general assistance services, the County does provide various public health and welfare programs and services;
• If the residents of the Township were to vote to dissolve the township, there does not appear to be any significant “ramp-up” or “leveling-up” costs associated with absorbing these General Assistance services into the County; and
• Thus, the cost to provide these services (or some portion of these services) would most likely be lower in the County than in the Township.
• McHenry Township had the second highest level of property assessment spending among 15 townships analyzed in McHenry County;
• On a per-parcel basis, the mean average spending to assess property in all the townships analyzed was $18.31 per parcel on a sample size of 139,974 parcels across the 15 townships;
• In McHenry Township, however, spending for Property Assessment services equaled $20.75 per parcel;
• At $20.75 per parcel, the amount spent by McHenry Township to assess property on a per-parcel basis is about 13.3 percent above the mean average cost to assess parcels and about 7.8 percent higher than the median average cost among all the townships analyzed; and
• While the County provides only supervisory assessment services, the cost of these services is less than one-third of the cost (32.7 percent) that McHenry Township spends (on a per-parcel basis) to assess its own parcels.
• At the end of fiscal year 2018, McHenry County spent $74,629.46 per mile across six transportation funds on total transportation expenditures compared to McHenry Township at $50,269.16 per mile in FY 2019;
• Advocates of townships maintaining their own roads argue that salaries per Road District worker in the townships tend to be lower than these same workers in the County;
• This may be true but a salary analysis represents just one small portion of total transportation costs including road maintenance costs, facilities, equipment, salaries and benefits, and other miscellaneous transportation costs. An analysis of salaries only does not account for these other costs;
• It should be noted that a per-capita (per-person) approach more accurately reflects the cost measurement of transportation spending. Roads can be single-lane or two-lane, paved or gravel, used frequently or used infrequently, rural versus in the city or in the township, have higher or lower levels-of-service ratings, et cetera. Based on a review of the literature, these variables are difficult to isolate and analyze in the per-mile cost comparison;
• The per-capita approach assumes that each person in the County or in the townships has equal access to these roads, regardless of the type or quality of these roads or the variables previously mentioned. The per-capita approach smooths out the anomalies in the data and lends itself to a better measure for comparing costs across townships; and
• The County, on a per-capita basis, spent $57.10 per person compared to McHenry Township at $103.42 per person. The argument that townships can maintain their roads at a lower cost than the County cannot be supported by the data.
= = = = =
The study concludes:
Based on the data (financial and socio-economic) analyzed for the preparation of this report, it does not appear that McHenry Township can provide three types of public services – – General Assistance, Property Assessment, and Maintenance of Roads and Bridges – – on a more cost-effective basis than McHenry County. Based on a review of the past three years’ audited financial data for both McHenry Township and McHenry county, it does not appear that this conclusion will change in the near future.
I note that the study author refers to 15 other townships, while they are 16. One, Burton, is quite small.