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Down economy exacerbating U.S. town dissolutions

By MANUEL VALDES Published: October 11, 2012

The epicenter of dissolutions recently, however, has been in the country's northeast corner.

Eight villages have dissolved in New York between 2008 and 2012. In that same time, 25 villages have considered dissolution, according to the Center for Governmental Research, the consulting firm.

At more than 6,000 people, the village of Seneca Falls became the largest village to dissolve in New York. It merged with the town of Seneca Falls, which meant part-time government positions were eliminated. A full-time village administrator was also let go. But both police departments were merged.

The Town of Seneca Falls now numbers at about 10,000. Like St. George, taxes spelled trouble for the village. Many village residents did not want to have a tax raise for maintenance work.

They were paying $16 per $1,000. After merging with the town, those taxes were lowered to just over $5 per thousand, said Seneca Falls Mayor Don Earle.

“All of the history is the same. Everything is the same,” Earle said. “Water, sewer, garbage were serviced without any stoppage.”

The spike in dissolutions comes in part as an organized effort by Democratic Gov. Andrew Cuomo's administration, which is trying to consolidate a sprawling web of municipalities in the state as a way to lessen the tax burden on residents, among other reasons.

While dissolving towns can save locals on taxes, it also mean dismantling local governments, cutting jobs and outsourcing services such as the police department. It also means a municipality's revenues, assets, contracts, and debts must be reorganized.

There are several states that don't allow dissolutions, Anderson said, but she still expects that more towns will dissolve.

When Wilkerson took office in 2011 and immediately disposed of the city clerk and city attorney, who had been on St. George's payroll for three decades, she said. A few years earlier the police department, which was made up of four full-timers and a dozen part-timers, had been disbanded. The department had gotten in trouble for less than professional behavior and writing too many traffic tickets.

“There was no reason for us to be a municipality,” Wilkerson said of St. George, which hosted only two businesses. “It was there to pay salaries, city attorney, city clerk, road commissioners.”

So far the transition into St. Louis County has gone smoothly for St. George. Eventually, the county will have to appropriate more than $1 million to fix the roads, but that will be done later on, Fiegel said.

But not everyone is left happy when a town dissolves.

“We have no law enforcement. We have a community watch. We have to wait a half hour for deputies to come from the county,” said Johnny Miller, whose town of Shamrock, Okla. — population about 100 — dissolved in 2010.

Municipalities in trouble have other options as well such as filing for bankruptcy or asking state governments for a bailout.

Earlier this summer, officials of the town of Gold Bar in Washington state floated around the idea of dissolution and the response from the community was swift. The town had been solvent until a slew of public records lawsuits sent the legal bills soaring.

“They didn't arrive with pitchforks and torches but a bunch showed up saying `we don't want to be unincorporated',” said Mayor Joe Beavers.

Gold Bar's hopes now hinge on voters approving a new levy in November. Otherwise, Beavers said, bankruptcy is too expensive.

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