Allen Park gets emergency financial manager; prompts EFM shuffle in other communities

Oct 25, 2012

The City of Allen Park is the latest to get a state appointed emergency financial manager. The move affects who’s in charge in some other communities who already have emergency managers.

Allen Park has eaten through its once-healthy general fund at an unsustainable rate. The city went from having about $5.5 million in the general fund in 2009 to a little more than $500,000 just two years later. A failed movie studio the city bought seems mostly to blame. City official tried to rectify the situation through a new millage but voters rejected it back in May.

“City officials issued bonds to finance what was to be a new studio. The city paid almost $11 million more than the property had been valued at and because the studio was never realized the city eventually was left with an annual debt service of about $2 million,” Treasury Department Spokesman Terry Stanton said.

Here’s an excerpt from the Treasury Department’s release issued today:

According to the city’s 2011 fiscal year financial audit, the ending balance in the general fund decreased from $3.7 million as of June, 2010 to $505,023 the following June. The negative net change in fund balance ($3.2 million) resulted from an operating transfer out of the general fund of nearly $4.7 million. The 2011 fiscal year-end balance in the general fund was 91 percent less than the $5.5 million balance that existed as of June 30, 2009.

The announcement comes with a sort of emergency manager shuffle.

Joyce Parker will start as the emergency financial manager on Monday. She will retain her role as EFM of the City of Ecorse. But Don Weatherspoon will take over her roles as EFM of Highland Park Schools. Plus he will continue to serve as the manager of the Muskegon Heights Public School district.

Stanton says Weatherspoon and Parker have proven themselves capable of handling both assignments at once. “Given their personalities and their expertise and their professionalism, it certainly will be a seamless transition,” Weatherspoon said.

Stanton says Parker will spend the bulk of her time in Allen Park. She’s hired a city administrator for Ecorse who will start next month. He believes the city, which first got Parker as an EFM in October 2009, is nearly out of its fiscal emergency.

Allen Park will pay $150,000 of Parkers salary, Stanton said, with another $25,000 coming from Ecorse. He did not have salary figures available for Weatherspoon yet.