Los Angeles Times
April 19, 1998, Sunday, Valley Edition


BYLINE: SHIRLEY SVORNY, Shirley Svorny is a professor of economics at Cal State Northridge, and an affiliated scholar at the Milken Institute in Santa Monica 

Critics say that breaking up Los Angeles will be costly. Even residents who favor Valley cityhood worry about the cost of duplication if the San Fernando Valley were to establish a separate government. These concerns are unfounded. Studies of the consequences of city size suggest that smaller cities can function at the same per capita cost or less than their larger neighbors. This means it will cost no more--and there is a good chance it will cost less--to run several smaller cities than to run one large city in Los Angeles.

The technological efficiency of producing services at different scales is one component of the overall efficiency of city size. Academic researchers have asked if there are advantages to collecting garbage, providing sanitation, setting up police or fire stations or producing other services in large cities. After careful analysis, they generally found no gains to providing services to more than 10,000 to 250,000 residents, depending on the service, and they found disadvantages of size for some services.

One issue is that producing services in an urban environment may raise the cost, making very large cities appear inefficient when they actually are not. For example, police protection may be more complicated in densely populated areas where assailants are not readily recognized or apprehended. Highly mobile urban populations may be associated with greater levels of criminal activity. Tall buildings may make fighting fires more difficult and costly. Not all studies control for these factors, but those that do find either no production cost advantages to city size, or higher production costs in larger jurisdictions.

Services that are provided by city governments fall, not so neatly, into two categories. Some are what economists classify as "private," such as garbage collection; each house must be served independently. In contrast, a park, public health department or fire station serves many individuals at the same time. Researchers note that this second group of goods and services is consumed jointly, giving it a 'public" aspect. But even where there are relatively public aspects to service provision, researchers have not found small communities disadvantaged.

Police protection has been studied intensely, as it comprises a relatively large share of city spending--30% in Los Angeles. The most interesting studies matched neighborhoods with similar demographic and community characteristics, some served by a large city police department, others with their own independent police force.

Using a variety of measures of police department performance, including crime rate, apprehension, cost and resident satisfaction, no evidence was found to support the premise that large departments are better able to provide police services.

These findings make perfectly good sense. Most of the services that cities provide cannot be produced in large-scale facilities. Each neighborhood requires its own cleaning crew, its own police patrol cars and station, its own firehouse and its own park. This means that the optimal crew size in each of these activities is very small. In industry, size tends to be associated with capital-intensive production, where labor costs are relatively minor. Because city services are generally labor intensive--more like a restaurant than an automobile manufacturing facility--size is of no advantage.

It certain cases, where it once made sense to have large regional service providers, technological innovation and deregulation have reduced the smallest efficient scale. This has occurred with respect to the provision of electric power and may be in the works for waste water treatment, eliminating the need for relatively large waste water and power jurisdictions. For the very few services where size remains an advantage--such as environmental protection--separate regional jurisdictions continue to be appropriate.

The establishment of new, separate cities does not mean that coordination among cities cannot take place. In fact, it is common to see arrangements or agreements among cities to shift firefighters and other emergency personnel as needed. With respect to police jurisdictions, state laws and interagency agreements facilitate police pursuit across city boundaries. Criminals are not home free just because they cross a city boundary.

There is no empirical basis for the assertion that service costs would rise or that services would deteriorate if the San Fernando Valley or any other portion of Los Angeles were to secede. Per capita costs of service provision would not increase if services were provided by smaller, local political jurisdictions; the more likely case is that per capita costs of service provision would decline.