Cityhood Investigatory Committee Summary and Recommendation on
Governmental Transition for Sparta Village 

INTRODUCTION 

The Cityhood Investigatory Committee was created in February 2005 with the purpose of reviewing the positives and negatives specific to Sparta on becoming the City of Sparta.  The Committee was further tasked with evaluating the positives and negatives of a potential change in municipal status and recommending back to the Village Council whether or not to proceed with becoming the City of Sparta. 

Membership on the Committee was by appointment of Sparta Village Councilmembers who presented three names of individuals from the community to evaluate the information that could be provided on the transition from a village to a city.  The Committee’s membership was composed of 19 residents and business owners with representatives from the local police department, fire department, ambulance service, and school district also serving in an advisory capacity. 

COMMITTEE REVIEW AND DISCUSSION

On March 31, the Committee convened for the first time to hear a presentation from the Michigan Municipal League regarding the technical aspects of transitioning forms of government and to take questions and answers from the Committee.  Following this initial presentation, the Committee membership forwarded to Village Manager Chodkowski their individual lists of concerns for research and presentation to the Committee.  The Committee’s second meeting was scheduled for June 1, 2005, to discuss its lists of questions and concerns with Manager Chodkowski.

At the June 1st meeting, the Committee discussed the contents of the memo prepared by Manager Chodkowski referencing the previously submitted lists of questions on the matter of cityhood.  Following discussion, the Committee’s consensus on certain issues is as follows:

Transition Costs:  The Committee understood that certain expenditures would accompany the transition process but felt that under certain circumstances these costs could be offset in a reasonable time following the transition. 

Tax Increase:  The Committee clearly indicated that the transition from a village to a city would have to result in a tax rate that was not significantly higher than that currently in place.  The Committee clearly understood that the issue of tax neutrality following the transition would rely heavily on an expansion of municipal boundaries.

Image Affect:  The Committee did discuss how the change in municipal status might affect the overall image of Sparta.  The Committee felt that the image of a small, rural community could still be maintained following a transition if the proper zoning and development policies were adopted by the governing body. 

Future Staffing:  The Committee reviewed what types of services a city would be obligated to provide in the future that are not currently required to be provided by the Village.  After discussion, the Committee acknowledged that certain services such as an assessor and building inspector would be needed but was unable to determine what type, if any, additional municipal employees would be needed. 

Effect to Township:  The Committee did determine in its review of the information presented that there were potential financial issues to the Township if the transition in government included a large expansion of municipal boundaries, but this was not a relevant matter in making a recommendation on a change in municipal status.  

Intergovernmental Services:  The Committee identified this issue as one that would be pivotal in helping to determine whether or not the transition of village to city would be beneficial for the Village’s current residents based on the Committee’s desire to see a tax-neutral transition. This matter was tabled to be specifically discussed at a future meeting. 

Municipal Boundaries:  The Committee determined that the key to a transition in municipal status while maintaining tax neutrality would be highly dependent on the expansion of municipal boundaries.  This matter was tabled to be discussed separately at a future committee meeting.

Following the Committee’s consensus on the above matters, the group adjourned until August 25 to allow Manager Chodkowski time to review, research, and analyze the effects the intergovernmental agreements in place between the Village and Township would have in the transition of government.

At the meeting held on August 25, the Committee looked at the two services being shared by the Village and Township Governments at this time: Sparta Carnegie Library and the Sparta Fire Department.  In evaluating these services, the Committee found the following:

Sparta Carnegie Library:  The library is currently funded by the Township through general tax dollars, and Village residents pay a Township tax.  However, if a transition to cityhood were successful, new city residents would no longer pay this Township tax, and the city would need to contribute funds towards the library’s operation for city residents to use the library’s services.  After reviewing several scenarios, the Committee felt that the funding of the library should be proportionate to where library members live, and it was clear that cost to the city would be an annual, on-going expense not currently paid by the Village.  This new cost would have to be paid by the city through general tax income, limiting the funding available to other services or projects, or through an increase in millage defeating the Committee’s resolve to see a tax-neutral transition in government. 

Sparta Fire Department:  The Village and the Township currently provide for fire services through an intergovernmental agreement where the Village pays one-third of the department’s operational costs and the Township pays two-thirds of the department’s operational cost.  Both the Village and the Township make their contributions to the department through their respective general tax revenues.  Based on the Committee’s discussion, the group felt that the best way to provide this service should a transition in government occur would be to establish an independently funded Sparta Fire District under the guidance of an independently elected board. The Committee did acknowledge that based on its desire to see tax neutrality in the governmental transition, the potential city’s tax rate would need to be reduced by nearly 2.5 mills from the Village’s current tax rate since the estimated tax rate an independent district would need to levy  to operate the fire department would be approximately 2.5 mills. 

After the Committee reached recommendations for the continuation of fire and library services, the Committee adjourned to allow Manager Chodkowski to research potential municipal boundary expansion.  The Committee asked Manager Chodkowski to consider areas for boundary expansion that could be serviced by existing utility systems. 

The Committee reconvened on October 19 to discuss potential municipal boundary expansion resulting from the transition of governmental status.  The Committee reviewed a recommended area of approximately 5.5 square miles located mostly to the south and west of the existing Village limits.  Based on the parameters set by the Committee, this area was the most qualified because the area to the west could be served by the water system, the southwest area could be readily served by both water and sanitary sewer services, and the area to the south could be serviced by sanitary sewer services.  The Committee discussed the issue of boundaries for quite some time but could not reach a consensus on what would be appropriate boundaries to recommend.

Following its discussion on potential municipal boundaries following incorporation as a city, the Committee agreed, with a majority of its membership present, to vote on a recommendation to the Village Council on whether or not to pursue incorporation as a city.

FORMAL RECOMMENDATION & FINDINGS

The Committee formally passed a motion at its October 19 meeting recommending that:

Village Council not proceed with the process of incorporating the Village of Sparta as a city and strongly encourage both the Sparta Village Council and the Sparta Township Board to form an independent fire authority to operate and fund the Sparta Fire Department.

This recommendation is based on the following reasons:

Currently the Township provides to Village residents, through its general tax revenues election operations, property assessment, building inspections, and library services.  These services are funded by the Township millage which is currently at .9861 and generates a total income of $91,000 from existing Village properties.  If the Village were to become a city, these same services are estimated to annually cost $146,000.  The difference between the cost for these services through the Township and what they could be provided for through the city is approximately $55,000.  Based on the fact that these services are already being provided through the Township, becoming a city would only duplicate these services and increase city operational costs.

The Committee focused on a change in municipal status that would be tax neutral for current Village residents.   In an effort to hold this position by assuming certain costs, the Committee factored into its discussion the increase in operational costs listed above as well as an independent fire authority.  Based on these assumptions, the Committee found that the necessary millage rate to continue current funding levels to an independent fire authority would be approximately 2.5 mills.  To establish an independent fire authority with a millage, the city would have to reduce its operating millage by as much and in so doing would create a constraint on general tax revenues which could lead to a reduction in existing municipal services.

Boundary expansion, in cooperation with the transition in governments, would be needed to meet the Committee’s desire to make the transition from village to city tax neutral.  In evaluating the area most likely to be incorporated as the new city boundaries, initial estimates on taxable values in the area could not generate enough revenues to adequately cover future municipal operations.  Furthermore, the Committee found that a boundary expansion of the size being proposed would cause significant controversy between the Village and the Township Governments.  The Committee also felt that the residents in the area proposed to be incorporated would not see a significant increase in services for the large increase in tax that would be associated with incorporation, causing additional friction between residents of the community. Conversely, the Committee felt current Village residents would most likely see a decline in services because existing resources would now be required to provide the same services over a larger area.

Other issues such as growth, development, and intergovernmental services were discussed by the Committee.  The overall consensus of the Committee was that differences between the Village and Township on these controversial issues was not so great to merit a change in municipal structure to resolve the matters.  Rather, the Committee felt that these issues stemmed from the political bodies failing to adequately work together and communicate on issues in everyone’s best interest.  It was the opinion of the Committee that these issues could be addressed more expediently and cost effectively by simply increasing communications and joint planning than by incorporating the Village into a city.

CONCLUSION

The issue of whether or not to incorporate the Village of Sparta into the City of Sparta has been an ongoing subject of debate dating back to the 1950’s.  The Committee, in its review of the information, acknowledged that there were a few positive points in transitioning to a city form of government over that of a village form.  These positive aspects of incorporation are largely intangible in nature compared to the very real negatives:  costs and taxes. 

Based on the information reviewed in the Committee analysis, the transitioning from a General Law Village to a Home Rule City is not one that will substantially improve the delivery of services for current Village residents or create a politically stable community which will positively impact growth and development. In the opinion of the Committee, intergovernmental service arrangements currently between the Village and the Township need to be addressed in a way that is mutually beneficial in services and costs, a larger tax base needs to be created within the Village, and a plan showing cost effective use of staff capable of meeting the increase in governmental responsibilities resulting from incorporation all need to be in place before incorporation as a city can truly be beneficial to the current Village resident. 

Respectfully submitted on behalf of the Committee,

        

In Abstentia                                                                                                                        

Athena Eary,                                                                Paul Schulz,

Committee Chairperson                                               Committee Vice-Chairperson