Municipal mergers and consolidations: solution for distressed municipalities?

One in a series explaining key terms and concepts of Pennsylvania government. Today’s topic: municipal mergers and consolidations.

Seeking a better understanding of Pennsylvania’s issues and proposed solutions? Sometimes, complicated jargon and concepts can get in the way. That’s why we started Explainers, a series that tries to lay out key facts, clarify concepts and demystify jargon. Today’s topic: municipal mergers and consolidations.

Pennsylvania is one of only ten states that doesn’t allow for unincorporated territory. That is, every piece of land is governed as part of a municipality.Why is this significant? Pennsylvania is comprised of 2,562 municipalities (only Texas and Illinois have more)—and around 800 have a population of less than 5,000. There’s currently no way for municipalities to disincorporate, even if they have a shrinking population, are financially struggling, or simply no longer want to self-govern.

But Pa. law allows a municipality to terminate itself in its current form by merging or consolidating with another municipality or municipalities. On paper, it may look like a good solution for struggling municipalities. But it doesn’t happen very often.

But first—in Pa., what exactly is a municipality?

A municipality is an incorporated territory governed by a local government. In Pa., municipalities are classified as counties, cities, boroughs, and townships. (Bloomberg is technically the state’s only town.)

What is a consolidation?

When municipalities come together to form a brand new municipality (i.e., a new government), it’s called a consolidation. All municipalities included in the consolidation cease to exist except as parts of a new municipality.

The last successful consolidation (proposal approved in 1997, effective 2000) was between Barnesboro Borough and Spangler Borough in Cambria County. The new municipality is called Northern Cambria.

There is no limit to the number of municipalities that can be consolidated, but all must be contiguous to at least one other municipality in the proposal. That said, no consolidation attempt involving more than two municipalities has been successful in Pa.

There is also no restriction to the types of municipalities that may consolidate (i.e., a city can consolidate with a borough, a township with a city, etc.).

What is a merger?

In a merger, one municipality essentially takes over another (or more than one other) municipality. All involved municipalities are terminated, save for the one assuming jurisdiction over the others.

For example, in 2013, Clearfield County’s Lumber City Borough merged into the Township of Ferguson. Lumber City no longer exists as a municipality. Ferguson Township now includes—and governs—what was formerly Lumber City.

As with consolidations, there is no restriction to the type of or number of municipalities that may merge, but historically, there has been no merger attempt (successful or unsuccessful) involving more than two municipalities.

It’s complicated

Consolidations and mergers are quite rare. Since 1975, when legislation essentially began to require all mergers and consolidations to go through the initiative and referendum procedure, there have been 16 merger proposals (11 of which were approved by a vote in a referendum) and 21 consolidation proposals (only 3 of which were approved).

Pennsylvania Consolidation and Merger Proposals from 1978 – 2013

Yellow highlight shows approved mergers or consolidations

Election	County	Merger Proposal	Consolidation Proposal
May 2013	Clearfield	Lumber City Borough into Township of Ferguson
May 2013	Beaver	Fallston Borough into Patterson Township
Nov. 2008	Washington	West Alexander Borough into Donegal Township
Nov. 2008	Mercer		West Middlesex Borough and Shenango Township
May 2007	Cambria	South Fork Borough and Ehrenfeld Borough
Nov. 2005	Washington	California Borough and Coal Center Borough
Nov. 2005	Centre	S. Philipsburg Borough into Rush Township
May 2005	Washington		Burgettstown Borough and Smith Township
May 2005	Erie		Edinboro Borough and Washington Township
Nov. 2004	Berks	West Lawn Borough into Spring Township
Nov. 2004	Mercer		Shenango Valley (Sharon, Farrell, Hermitage Cities; Sharpsville and Wheatland Boroughs)
Nov. 2004	Cambria		Portage Borough and Portage Township
Nov. 2003	Potter	East Fork Township into Wharton Township
Nov. 2002	Clearfield		DuBois City and Sandy Township
Nov. 2001	Berks	Wyomissing Hills Borough into Wyomissing
Nov. 1998	Berks	Temple Borough into Muhlenberg Township
Nov. 1997	Cumberland	West Fairview Borough into East Pennsboro Township
Nov. 1997	Cambria		Barnesboro Borough and Spangler Borough
Nov. 1995	Clinton	South Renovo Borough into Renovo Borough
May 1995	Schuylkill		Tower City Borough and Porter Township
May 1995	Clearfield		DuBois City and Sandy Township
May 1995	Centre		College Township, Patton Township and State College Borough
Nov. 1994	Erie		Fairview Borough and Fairview Township
Nov. 1994	Beaver		East Rochester Borough, Rochester Borough, and Rochester Township
Nov. 1993	Butler	Seven Fields Borough into Cranberry Township
Nov. 1993	Cambria		Barnesboro Borough and Spangler Borough
Nov. 1992	Indiana	Jacksonville Borough into Black Lick Township
Nov. 1991	Tioga	Elkland Township into Nelson Township
Nov. 1991	Cambria		Casandra Borough, Portage Borough and Portage Township
Nov. 1991	Elk		Benzinger Township and St. Mary’s Borough
May 1991	Monroe		East Stroudsburg Borough, Hamilton Township, Middle Smithfield Township, Price Township, Smithfield Township, Stroud Township and Stroudsburg Borough
Nov. 1989	Clearfield		DuBois City and Sandy Township
Nov. 1989	Cameron		Shippen Township and Portage Township
Nov. 1984	Elk		Benzinger Township and St. Mary’s Borough
Nov. 1982	Lackawanna		Clarks Summit Borough and Clarks Green Borough
Nov. 1980	Bradford		Athens Borough, Athens Township, Sayre Borough and South Waverly Borough
Nov. 1978	Erie	East Springfield Borough into Springfield Township

Source: Pennsylvania Department of Community & Economic Development 

This is at least in part because mergers and consolidations can be extremely complicated and the process fraught with tension.

Each municipality must work together to decide how the governments will be combined. The municipalities have to reach an agreement on everything from local laws to employee benefits to tax rates. There’s a lot of potential for discord in the decision-making process. For example, in one merger attempt, the main hurdles centered on issues like snow-plowing and what to name a local library.

And other efforts have failed simply because the elected officials in charge of the process couldn’t get along.

An assessment of mergers and consolidations put out by the Pennsylvania Economy League’s Central Division reports one common hurdle is residents’ feelings that a merger or consolidation represents a loss of community identity (and, in fact, in both mergers and consolidations, at least one municipality loses its name). Another hurdle? Pennsylvanians are really attached to the idea of local representation.

As such, an important factor to whether or not a merger or consolidation will be successful is how well the respective populations identify with one another—and how well local leaders work together.

If it’s so complicated, why do it? (And is it a good idea?)

Mergers and consolidations have been touted as one way to address Pennsylvania’s issue of too many “zombie towns.” Since state law does not allow municipalities to dissolve (although this may change), there are few options for, say, a town with a shrinking population and a struggling budget to provide necessary services to its constituents. The idea is that a merger would allow such a municipality to “dissolve” into another municipality.

The reality, however, is that stronger municipalities have little incentive to merge with weaker municipalities. A wealthier community would be hard-pressed to take on the burdens of one that’s struggling.

There’s also the idea that it makes sense for two financially struggling or shrinking municipalities to “team up” by consolidating. Merging would allow the municipalities to form a larger tax base and combine and streamline services like police or water/sewer.

But even then, experts say it’s not an easy (or even recommended) solution. Two poor municipalities may see some benefits by coming together, but they might not actually save money. For one, struggling municipalities bring their baggage—and financial problems—with them. Two financially distressed communities coming together essentially just becomes a larger financially distressed community.

In fact, a merger could cost municipalities money. For example, it’s unlikely that residents would vote for a higher tax rate. So when municipalities with different tax rates combine, residents will likely vote for the lower millage. This means a lower combined income for the merged municipality.

That said, mergers and consolidations can benefit healthier municipalities. In a case where one municipality has more market appeal, a merger could extend that territory and bring in another municipality to the more valued address. This happened in Berks County, when the borough of Wyomissing Hills merged into Wyomissing. The property value of the former borough increased as a result of the merger.

How do you merge or consolidate, anyway?

Historically, municipal combinations happened through various procedures like annexation, consolidation, and annulment of borough charters. The Municipal Consolidation and Merger Act of 1994 provided uniform statutory procedures for merger and consolidation.

There are three ways to initiate a merger or consolidation—by a joint agreement, a voter initiative by petition, or (since 2003) a petition for Home Rule Charter. All require an affirmative vote by voters in the involved municipalities.

To establish a merger or consolidation by joint agreement—the governing bodies of the involved municipalities vote to authorize a joint commission, which is tasked with putting together an agreement specifying the details of the merger or consolidation (such as which municipalities will be affected, the type and class of the resulting municipality and how it will be governed, the proposed financial arrangements of the new municipality, as well as a transition plan and schedule for elected officers).

The governing bodies of the affected municipalities must then vote to accept the joint agreement.

The agreed-upon ordinance must be filed with the county board of elections at least 13 weeks before the next (primary, municipal, or general) election.

Voters in each municipality must approve of the merger or consolidation plan with a majority vote.

It’s important to note that there are many opportunities for those opposed to a merger or consolidation to stop the effort. The process can take many months and the governing bodies from each affected municipality can vote at any time to stop participation in the process.

Another way municipal consolidations or mergers can be introduced is by a voter initiative by petition.

A petition (which specifies the details of the merger or consolidation and the way the resulting municipality will be governed) must be submitted for each affected municipality. The petition needs to be signed by at least as many voters as equals 5% of the number of votes that were cast for the governor in the last gubernatorial general election within the respective municipality. Like the joint ordinance, the petition must be filed with the county election board by the 13th Tuesday before the election. The board of elections then sends a copy of the petitions to the local governments of each affected municipality, and the measure is included in the ballot during the next election.

Finally, a merger or consolidation can be initiated by a petition for Home Rule Charter. The referendum would call for the formation of a commission to study the issue of the consolidation or merger and provide a recommendation, and draft and recommend a new home rule charter. The charter specifies the details of the boundary change and how the new government will run. It is voted into effect via referendum.

Functional consolidation

For all the reasons stated above, it’s quite rare for municipalities to successfully merge and consolidate structurally. But municipalities can work together by combining public services. This allows local governments to see benefits like reducing costs and increasing services while avoiding many of the pitfalls of a structural merger.

“Functional” consolidation happens more frequently than structural consolidation. It can include the regional combining of services like Lycoming County’s Public Safety program and York County’s library system, which are paid for and used by multiple municipalities within the county.

Did this article answer all your questions about municipal mergers and consolidations? If not, you can reach Kate Lao Shaffner via email at klaoshaffner@psu.edu or through social media @klaoshaffner. Have a topic on which you’d like us to do an Explainer?  Let us know in the comment section below, or on Twitter @PaCrossroads.