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An exit interview with Flint Emergency Manager Jerry Ambrose

Apr 29, 2015

Jerry Ambrose had the shortest tenure of any of the city of Flint’s emergency managers.

It started in January 2015 and ended today.

But he has been there almost since Gov. Snyder put the city under state receivership after a ‘financial emergency’ was declared in 2011.

That designation was lifted this week.        

Flint emergency manager Jerry Ambrose
Credit Steve Carmody / Michigan Radio

Ambrose served three different emergency managers as their top finance officer. 

He replaced Darnell Earley at the beginning of this year, when Earley left to take over as the emergency manager for Detroit Public Schools.

I sat down with Jerry Ambrose to discuss the end of his tenure and what challenges lay ahead for Flint.  

Q and A with Jerry Ambrose

Steve Carmody: When you leave this, you’re not only leaving after a brief tenure as emergency manager, you’re leaving after several years being involved in this whole process.

Jerry Ambrose: About three….

SC: Glad to go?

JA: Glad to go?  I’m happy where the city has arrived at. We’ve done, I believe -- at the time that we leave -- that we will have achieved the goals that we want. For the first time in probably ten years, the city of Flint won’t have any deficits in its funds.   It will have in place a number of policies and procedures, many of which were adopted by the city council, supported by the mayor, that if the leaders of the city remain committed to those and do what those things require them to do, although it will be difficult, the city should remain financially stable. I would hope that would be their guiding thought.

SC: Looking back over the past four years, for you what has been the toughest issue that had to be settled during this emergency manager tenure.  Not just yours but through all the emergency managers you served as well?

JA: I don’t know if there is one tough issue.  Probably the big tough issue is realizing that the things that you’re having to do are not academic exercises.   They are decisions that affect real people in very difficult ways.   But you have to balance that against the citizens of the city in total, who obviously pay the freight for this.

The city can not help its people if it itself is broke. 

Working pass that has been difficult.

Being able to talk more about how you solve the problem, how you go forward rather than listening to people talk about bad Public Act 436 (Michigan’s emergency manager law) is and how mean the governor was and all this.  

I understand very legitimate concerns about all that and very legitimate debate.  

But, we’re here.   The city is broke.   We are here to fix it.  And that’s what we’ve been working on doing.  

A lot of time has been spent listening to other things than that.

SC: Is this the best way of doing this?  

JA: Of all the tools that are available now it is the best tool because it’s about the only tool.  

SC: Expand upon that a little bit.  What makes it such a great tool?

JA: The tool is….you are enabled to make some decisions which some people will tell you quietly ‘you know we could never get that done.’ 

That’s whether it’s modifying labor contracts, whether that is forcing decisions about consolidations and efficiencies. That often times are very difficult to do.  

But sometimes the benefit, from the perspective of the solvency of the city, the substantiality of the city, outweighs that.

This tool enables those things to be taken care of.   They enable the fire to be put out in terms of a city that is broke.  

What is the alternative if a city is totally broke? 

Is it bankruptcy?  Is that the best thing?  

We chose the path that we would do anything other than bankruptcy to solve the issues.  And I think we’ve shown there is a path.

Not that that path would have worked in Detroit.  Because Flint and Detroit are different when you look at the dynamics what caused the problem and what the solutions were.  

SC: What could be done to make that law (Act 436) work even more effectively?

JA: I think it’s a learning process as different cities go through this.   The state learns and local governments learn too about the abilities. 

I’m not sure it’s statutory issues.  I think it’s more the issue of trying to engage the local leaders.  Not in a combative way.  But in a way of engaging them.  Trying to give them the tools, as quickly as possible, for them to solve the issues to go forward.

That’s what I was saying earlier on about conversations about 436.   Let’s stop talking about how bad the law is because it is where it is.  It was enacted by a democratically elected legislature and signed by an elected governor.   

The notion that democracy has gone out the window, I my mind, ultimately doesn’t stand the test.

But having said all that, in reality you’ve got a city that is broke.  Flint was very close to insolvency.   And now we’ve been able to do something that avoided the bankruptcy.   That I think have put the city back into financial straits, the positive way.

Fundamentally though, the fact that the city is now…the fire’s out….the finances are stabilized.  The end product is a city with a very low level of service.  And whether that low level of service will be conducive to attracting people, redeveloping a city is a bit of a quandary. 

I think, when we present the budget, (Fiscal Year) 16 and (Fiscal Year) 17 are solvent.  We don’t see the kind of reductions we’ve had to do in the past.  We see stability for the next two years.  

But beyond that you still have the reality that the base income for the city is going to rise at a lower level than the base cost of doing business. It’s going to be that dynamic for several years.

And when you are at a low level of service, it becomes problematic when you talk about being able to make major investments in infrastructure or major improvements.  How do you do that?

There’s got to be more recognition of that.  Many there needs to be more tools to allow access to capital for some of those things.  

SC: More access to capital through the state capitol?

JA: Well, wherever. 

You have the state government, you have the federal government, you have local foundations…all of whom in various ways been supportive. 

We should not, I don’t want people to say ‘none of those entities have been supportive’.

The state government in a different way.  We would have preferred for example that the state government should have provided us the ability at least to ask the voters for an increase in the local income tax.   Unfortunately, the legislature has not allowed that to happen.   That would be very significant for this city if it were to happen and if the voters were to approve it.   It would provide the city not only with some stability but with the ability to somewhat improve their services. 

But it hasn’t happened.  So the question then is, what are the other choices?

You have the state government and federal government and foundations, in different ways, assisting the city is specific ways.  You have the state government providing state troopers to support our very low level of public service.  You have them supporting the operation of our lockup.   You have them pursuing state legislation that did allow us to consolidate the district courts (The 68th district court will become a division of the 67th district court.)

On the federal level, you’ve have congressmen and others who’ve been working to assure us access to grants. Very specific things.

The tradeoff is all those things are time limited in a sense or at least there’s no assurance they will continue on.   There’s always that risk that at the end of the run there the state legislature may decide not to fund the lockup anymore or that it needs to reallocate state troopers.   Or in the case of the federal government, a SAFER (public safety) grant expires.    And then you are faced with very significant decisions to make about level of service.

SC: Given what you know about the city’s budget, the city’s other issues, is it realistic to expect that now Flint will now go up or given the problems with revenues and the cost of services, that in another five or ten years the city could be back into a situation where they’re running multi-year deficits and are in as bad a condition as they were two or three years ago?

JA: Well, I can’t predict the future that well.

I think the ability is there.       

There are other cities that have experienced the same types of issues Flint did.  Saginaw, Lansing, Pontiac…a number of these.  

If you think about Lansing and Saginaw, they had major employer loses.   They’re urban centers.   They had population loses.   They were stressed financially in different ways.   But they somehow avoid receivership.   It’s possible to do it.

This is why we hear a lot of conversations about the ‘early warning flags’ is that we need to address these problems before you have multi-year deficits.  

At the point and time you don’t have the money, you should not embark on this short term strategies of borrowing the money from left hand to right hand.  

That’s the point in time things have to be addressed.

SC: Anything surprise you during the last four years?

JA: No not really. I think this has been a really difficult situation. It’s been tough for everybody. We’ve had to make some difficult changes.

I think we have a pattern for going forward where there’s a chance for financial stability.   I think there are a number of people, between the city council and the mayor and the staff that’s here, they certainly have the capabilities…for facing the challenges that are going to come forward.

But it will be difficult.   And I think that the leaders at the state and federal government have to understand the depths of the problem that urban centers have.

There’s just a point in time there’s just not enough gas in the tank.  There’s just not enough revenue from the local taxpayers to solve the problems that are here. 

Whether the city’s here or not, people will be here.   And they’re going to have some basic needs that have to be met, one way or another.