Chart of different cost options and percentages that each community would contribute.Click chart for larger graphic.
The following was presented to Police Advisory Committee members at the November meeting. The document was prepared by consultant Virchow Krause. This site doesn't allow me to post PDF or word documents, so this information is copied from the report.
Cost Allocation Options for the Grand Chute-Appleton
Police Merger
November 25, 2008
The distribution of costs between participating municipalities in a fair and equitable manner is the cornerstone to any successful merger so that one party does not feel it is subsidizing the costs of the other. There are a number of funding options and combinations of options that can be considered. Currently, each municipality is funding the cost of providing police services through the General Fund. Thus residents pay for police services based on the value of their property (as is the case with most municipal services). Public safety services are rarely paid for on a use-of-service or benefits-received basis because they must be available to all residents in a community on an equal basis at all times. Public safety is in effect an essential service providing for the “health, safety and welfare” of the entire community, the costs of which do not easily lend themselves to be allocated to individual citizens according to the benefits-received principle of public finance (i.e. user charge).
In order to create equity in the distribution of costs for police services between municipalities, several alternative funding mechanisms are available for consideration. These cost-sharing methods may include:
A. Equalized Value
B. Population
C. Calls for Service
D. Part 1 Index Crimes
E. Baseline cost plus one or more of the above
A. Equalized Value Basis
This is the current method used by Appleton and Grand Chute for separately funding police services. It is a widely accepted method and is easy to administer using annual State equalized values. Under this method, each municipality would pay its share of the merged police department costs in proportion to its share of the sum of the equalized values of the two municipalities. This method of allocating costs between municipalities would cause the more developed (higher taxable value) community to pay a higher share of the costs. The focus here is the protection of property as being the primary role of the police department.
Using this formula and based on 2008 data from the Department of Revenue, Grand Chute would be expected to pay 34.46% of the total cost of a merged police department and Applton would pay 64.54%, as shown below:
B. Population Basis
The second method that can be considered for the distribution of costs is the population method. This method is also easy to administer using U.S. Census or State Department of Administration annual population estimates. Since police services are primarily responsible for protecting persons, this method has significant validity. However, this approach does not account for crime enforcement related to retail theft or high population density that often has greater incidents of crime. Nor does it take into consideration “daytime” populations that can very significantly in those municipalities with a high concentration of retail businesses, office complexes, high traffic roadway systems, etc. Using this methodology, Grand Chute would pay 22.11 % of the cost of the merged police department and the City of Appleton would pay 77.89%.
C. Calls for Service
The calls for service method would allocate costs based on the proportionate share of the annual number of calls for service in each municipality. This method comes closest to a “user charge” system in that the municipality with the greatest call volume would pay the largest share of the costs. If this methodology is used, it is important that the municipalities “count” calls for service in the same manner. This method does not take into account the cost of the many hours of general patrol time (which is a crime deterrent) or the basic costs of providing police services regardless of the number of calls a community experiences.
Distributing costs on the basis of calls for service would result in Grand Chute paying 27.32% of the cost of police department services and Appleton paying 72.68%.
D. Part 1 Index Crimes
The Part 1 Index Crime method would allocate costs based on the proportionate number of Part 1 Index offenses in each municipality. These crimes include: murder, rape, robbery, aggravated assault, burglary, larceny, motor vehicle theft, and arson. These are the most serious crimes that may be committed in a community. Similar to calls for service, this method begins to approach a “user charge” system in that those municipalities with the greatest number of serious crime calls would pay the largest share of the costs. The distinction between “index” crimes and total crimes is that index crimes, because of their serious nature, take more personnel time to respond to and resolve thus requiring a greater manpower commitment. As with calls for service, however, it does not take into account the cost of the many hours of general patrol time, detective follow-up, or other basic costs of providing police services regardless of the number of calls or level of crime prevention. Because there are fewer of these crimes, to be most effective, a methodology using index crimes would need to include a rolling 3 or more year average to minimize year-to-year swings in data (which can be significant).
Information on index offenses is reported to state and federal agencies through the uniform crime reports (UCR) and thus is relatively easy to administer as a funding option.
Distributing costs on the basis of index crimes would result in Grand Chute paying 26.69% of the cost and Appleton paying 73.31%.
E. Baseline Cost plus a Combination of Funding Options
Providing police protection requires a substantial capital investment in buildings, vehicles, equipment and manpower. This investment is necessary even if the police department did not respond to a single call. Furthermore, police departments provide a variety of services to citizens such as general patrol, responding to calls, investigations, crime prevention, education, etc. that are not attributable to any one factor. Thus consideration can be given to distributing costs on the basis of a baseline amount and one or more other factors. This can be done through a variety of funding options or by weighting the various categories.
The above methodologies for the distribution of costs are summarized as follows:
