emergency manager law

Steve Carmody / Michigan Radio

The Benton Harbor Board of Education may take a step this evening toward getting its financial house in order. 

Benton Harbor Area Schools faces a $15 million deficit.

Last month, a state panel determined the school district is in a "financial emergency."

Monday, the state Treasury department announced that an agreement has been crafted that will “restore financial stability to Benton Harbor Area Schools as quickly and efficiently as possible.”

As part of the agreement, a consultant will assist district leaders in implementing the plan.

David Lewinski Photography

Q: What do Detroit, Allen Park, Flint, and Hamtramck all have in common?

A: The cities are all under the control of a state-appointed emergency manager. 

Last month, the city of Lincoln Park joined that list. But we didn't see the protests and outcry that we saw over the appointment of an emergency manager in Detroit. 

When the city of Lincoln Park was turned over to Brad Coulter, a consultant to corporate turnaround specialists O'Keefe & Associates, the mayor of Lincoln Park, Thomas Karnes, was positive.

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The state Legislature returns briefly from its summer break Wednesday for its only scheduled session day in July.

No full floor votes are expected in either the House or the Senate. But a number of legislative panels will meet to discuss a wide variety of issues.

The state Senate Government Operations Committee is expected to approve two high-profile medical marijuana bills. House Bill 4271 would allow medical marijuana dispensaries to operate in Michigan. House Bill 5104 would allow patients to use edible and other non-smokable forms of marijuana.

Andrew Jameson

Governor Snyder has named Brad Coulter as emergency manager for the city of Lincoln Park.

Coulter will take a leave of absence from his job as a consultant with O’Keefe & Associates, a firm specializing in turnaround restructuring and corporate finance services, to try and balance the downriver Detroit suburb’s books.

Lincoln Park’s mayor and city council asked the Michigan Department of Treasury to review its finances last year.

City of Highland Park

Gov. Rick Snyder has confirmed his decision that Highland Park faces a financial emergency.

The small city located within Detroit’s borders is no stranger to financial troubles.

The Michigan Department of Treasury first reviewed Highland Park’s finances in 1996. From 2001 through 2009, it had an emergency financial manager.

Michigan State University

The latest Michigan community to fall into financial collapse is the tiny half-square mile community of Royal Oak Township, in Oakland County.

Late last month, Gov. Rick Snyder confirmed a financial emergency existed in Royal Oak Township. That cleared the way for action under Michigan's overhauled emergency manager act, PA 436.

What's happened in Royal Oak Township illustrates the changes and options available under PA 436 after voters rejected the previous emergency manager law in November 2012. We wondered if other communities can learn cautionary lessons from the financial troubles of Royal Oak Township.

Eric Scorsone, municipal finance expert from Michigan State University, joined us today.

Listen to the full interview above.

Steve Carmody / Michigan Radio

The Flint city council is expected to consider a plan tonight that may lead the city out from under state oversight.

Flint has had a series of state appointed Emergency Managers, dating back to 2002 under Governor Engler.

Darnell Earley is the current man in the job. He's outlined a seven- point plan to prepare the city to transition back to local control for the first time since 2011.

Earley’s plan includes addressing Flint’s deficit, legacy costs and strategic planning.

A state review team has officially concluded that a “financial emergency” exists in the city of Lincoln Park.

The small suburb in the downriver area just south of Detroit is running a slight deficit right now, despite having a $4.5 million general fund balance in 2010.

According to the review team’s findings, city officials estimate that deficit will grow by at least $1 million by the middle of this year—more if the city can’t get concessions from its police unions.

Governor Snyder has 10 days to confirm the review team’s findings.

screenshot / Google Maps

Now that Gov. Rick Synder has confirmed that a “financial emergency” exists in the Detroit suburb, Royal Oak Township officials have seven days to decide how to move forward.

Under the state’s emergency manager law, known as the Local Financial Stability and Choice Act, there are four options the township can choose:

  • a consent agreement,
  • an emergency manager,
  • neutral evaluation,
  • or Chapter 9 bankruptcy

From the governor’s office:

On January 30th, Governor Snyder determined that a financial emergency exists in Royal Oak Township after reviewing a report from an independent financial review team. Following a hearing township officials requested, as allowed under PA 436, State Treasurer Kevin Clinton recommended that the governor confirm his determination of a financial emergency.

State officials say the township board has until 5 p.m. on Wed., March 26  to make a choice on how to move forward.

Lester Graham / Michigan Radio

The U.S. Sixth Circuit Court of Appeals will allow appeals to Detroit’s bankruptcy eligibility ruling, The Detroit Free Press reported.

Detroit’s largest union – AFSCME Council 25 – and the city’s two pension funds – Detroit Police and Fire Retirement System and the General Retirement System – are among the creditors who filed an appeal to Judge Steven Rhodes’ December ruling that Detroit is eligible for bankruptcy.

According to the Freep’s Nathan Bomey and Matt Helms, Detroit’s bankruptcy case would continue as the appeal case works through the courts.

The central argument for the union and pension funds is that the city did not negotiate “in good faith” prior to filing for bankruptcy, meaning the city and state "rushed" to bankruptcy court.

Rhodes, in his ruling to approve Detroit's bankruptcy, determined that good faith negotiations were not possible under the circumstances.

Steve Carmody/Michigan Radio

LANSING, Mich. (AP) - Review teams have found financial emergencies in two more Michigan communities.

The state treasurer's office says Governor Rick Snyder has 10 days to make a decision on the financial conditions of Royal Oak Township in Oakland County and Highland Park, near Detroit.

The reviews are part of a process that could lead to the appointment of emergency managers.

Steve Carmody/Michigan Radio)

Cities across Michigan are closely watching what happens to Detroit in bankruptcy court this week.

More than a dozen Michigan cities and school districts are currently under some form of state oversight.

Deandre Windom / LinkedIn

A state financial review board gave one school district a reprieve, but steered the city of Highland Park back toward a state takeover.  Highland Park has been under some form of state receivership since 2002. The new review was required by the new emergency manager law.

Highland Park Mayor Deandre Windom said he still hopes to convince the state to accept his city’s deficit elimination plan.

“We’re going to sit down and explore our options and make sure we’re all of one accord and make sure the citizens of Highland Park are aware of us moving forward,” he said following the meeting of the state Emergency Loan Board.

The next step is for another team of financial experts to conduct a deeper review of the city’s finances before making its recommendation to Governor Rick Snyder. 

Detroit emergency manager Kevyn Orr didn’t share much new information at his first public meeting Monday night—but he did set the stage for an upcoming meeting with the city’s creditors.

At his first public meeting—required by the emergency manager law that empowers him--Orr told a story we already know: Detroit hasn’t been paying contractors, making pension payments, and has only survived by borrowing billions.

As expected, Governor Snyder has confirmed that Hamtramck faces a financial emergency.

Now, the question is what to do about it.

Hamtramck’s financial problems are nothing new. The city was in state receivership from 2000-2007. And in 2010, city officials asked to file for bankruptcy.

And they asked for this state review, too—which found the city is still running continuous deficits, and can’t make pension payments on time.

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The number of school districts and cities in Michigan that are in a state of financial emergency are rising.


Now, as many of them are handing over control to a state-appointed manager, it's important to ask: how effective is state oversight?


The City of Hamtramck is in a state of financial emergency six years after it emerged from state oversight.


An independent review team reported that Hamtramck isn't able to make its monthly pension payments and that the city's general fund deficit is expected to reach $3.3 million by the end of June. A structural operating deficit has existed in the city's  general fund throughout the city's last three fiscal years. 


Steve Carmody/Michigan Radio

Flint’s Emergency Manager submitted his letter of resignation today.     

Ed Kurtz has long said he planned to step down at the close of the fiscal year at the end of June.  His letter of resignation simply makes that official.

Kurtz was appointed as Flint’s emergency financial manager last summer, after the city’s previous emergency manager had to step down because of changes in the law.

Steve Carmody/Michigan Radio

Flint’s emergency manager will unveil the city’s budget plan for next year later today.

Elected officials in most Michigan cities have spent the past month or so holding public meetings to discuss and get public feedback on their spending plans for next year.

But in Flint, the emergency manager has sidelined the mayor and city council

So the budget has been drafted behind closed doors.

The plan will be made public late this afternoon, after state officials have had a look and possibly made some changes.

Steve Carmody/Michigan Radio

DETROIT (AP) - Leaders of the Detroit branch of the NAACP say they'll file a lawsuit next week challenging Michigan's emergency manager law.

The law has allowed Gov. Rick Snyder to put managers in Detroit and other struggling cities and school districts. Critics plan to talk Monday outside the federal courthouse in Detroit.

Other legal challenges have not been successful. An Ingham County judge in April threw out a lawsuit that claimed lawmakers violated the Open Meetings Act when it approved the bill in December.

Hamtramck could be the next Michigan city to get an emergency manager.

Governor Snyder appointed a state review team to examine the city’s finances Wednesday.

Hamtramck city officials actually asked for the state review. The tiny enclave within Detroit has struggled financially for many years.

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