WUOMFM

emergency manager law

Highland Park municipal building
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.

LinkedIn

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.

HIGHLAND PARK, Mich. (AP) - The state-appointed emergency manager for Highland Park's public schools has revoked diplomas awarded last year to 18 students.

MLive reported Friday that a review of transcripts determined the students were given credit for failed classes or didn't have enough credit hours to graduate.

Emergency manager Donald Weatherspoon says the students in the academically and financially struggling Detroit area district were "misled" by school officials.

Weatherspoon also is manager of Muskegon Heights Public Schools in West Michigan.

Matthileo / Flickr

This week in Michigan politics, Christina Shockley and Jack Lessenberry discuss the possibility of improving Michigan’s public defense system, and lawsuits challenging the state’s emergency manager law and right to work law for violating Michigan’s open meetings act. They also talk about the potential for a rapid transit system in southeast Michigan.

Michigan Court of Appeals
Mike Russell / Wikimedia Commons

Union activist and Highland Park school board member Robert Davis has been actively fighting emergency manager appointments in the state.

He's had some success arguing that the state's financial review teams must meet in public, but he's lost a recent round.

More from MPRN's Rick Pluta:

The Michigan Court of Appeals has dismissed a legal challenge to the state takeover of the Highland Park school district. Union activist and school board member Robert Davis claimed the takeover violated the Headlee Amendment to the State Constitution. The Court of Appeals said another court panel had already ruled against Davis on the same set of facts.

Davis was indicted last spring for theft.  Federal authorities say Davis sent fake bills to the Highland Park school district and pocketed more than $125,000. Davis says he's been fighting these accusations for years and says the indictment was based on information supplied by his "political enemies."

Steve Carmody/Michigan Radio

LANSING, Mich. (AP) - A lawsuit seeking to block the appointment of Detroit emergency manager Kevyn Orr has been dismissed.

Activist Robert Davis said Monday that the lawsuit became "moot" when a Lansing Circuit Court judge refused last month to hold a hearing before Orr's hiring by the state's Emergency Loan Board.

Davis says both parties stipulated that the suit be dismissed "based on a pending case" before another judge to invalidate Orr's appointment.

via wikipedia

The Reverend Al Sharpton and his National Action Network are the latest activists to jump behind the fight to Michigan’s emergency manager law.

Sharpton was in Detroit as opponents filed a federal lawsuit today.

Critics maintain that Michigan’s emergency manager law violates both state and federal law by stripping local voting rights in cities and school districts with emergency managers.

And they also argue it’s a racial issue, with black voters disproportionately affected.

Steve Carmody/Michigan Radio

Each week we discuss Michigan politics with Susan Demas, political analyst for Michigan Information and Research Service, and Ken Sikkema, Senior Policy Fellow at Public Sector Consultants.

Michigan’s new emergency manager law went into effect today, so we wanted to find out how the new law differs from the one voters overturned in the November 2012 election. And we discuss the legal challenges to the new law. Plus, the Supreme Court is hearing two cases this week centering on same-sex marriage. In Michigan in 2004, voters approved a constitutional ban of same-sex marriage and civil unions. There has been a legal challenge to that ban, but the judge overseeing the case chose to delay his decision until after the Supreme Court makes their ruling. 

Listen to the full interview above.

User: Brother O'Mara / flickr

Michigan's right to work law goes into effect

Michigan's right-to-work law, which says employees cannot be required to pay union dues or fees as a condition of employment, goes into effect today.

According to MPRN's Rick Pluta, there is still plenty of conflict over the new law.

"Some Republicans are threatening budget sanctions for public employers that have signed extended labor bargains that would delay the effects of the law. Labor groups plan to mark the day with protests and vigils, including one at the state Capitol. Governor Rick Snyder says he’s not concerned."

Opponents challenge EM law in federal court

Opponents to Michigan's new emergency manager law say it is unconstitutional and are challenging it in federal court.

“A lawsuit Wednesday in U.S. District Court in Detroit seeks an injunction to stop the law. It claims that the new law is similar to one that voters rejected in November, and violates the collective bargaining rights of workers," the Associated Press reports.

Governor Snyder approves harbor dredging after record low water levels

"Governor Rick Snyder says he expects almost 60 Michigan harbors to be dredged in time for the summer boating season. He approved more than $20 million for the projects yesterday," reports Michigan Radio's Jake Neher.

Sarah Cwiek / Michigan Radio

The US Department of Education is now investigating the state of Michigan over alleged civil rights violations.

The department’s civil rights office was already investigating two civil rights cases against the Detroit Public Schools.

Opponents of Michigan’s emergency manager law are gearing up for a long, hard fight against it.

The Reverend Jesse Jackson joined Congressman John Conyers and others in Detroit Friday to outline some of their plans.

via Detroit Board of Education

Detroit’s elected school board will have short-lived authority over some key decisions.

A Wayne County judge ruled Wednesday that the district’s emergency financial manager had exceeded his authority on some issues.

Judge Annette Berry said Roy Roberts must consult with the school board on school closings, security, and some other issues.

Roberts is supposed to share authority with the school board. He oversees finances, while the board supervises academics.

But the two are hard to separate, and both sides have brought court cases over how that should work in practice

Detroit school board President Lamar Lemmons says the ruling granting board members a partial injunction proves Roberts overstepped his authority.

"He’s used the fact that he’s had financial authority to, if you will, bully the staff into cooperating with him,” Lemmons said.  “And for all intents and purposes, ignoring the board and its designated superintendent.”

The arrangement will be short-lived, though. A new emergency manager law kicks into effect on March 28th, once again giving Roberts broad powers over the whole district.

Lemmons says the board plans a court challenge to the new law.

Steve Carmody/Michigan Radio

DETROIT (AP) - Michigan Gov. Rick Snyder is planning to discuss Detroit's financial situation on Thursday.

The governor is expected to hold an afternoon round table with the media in Detroit. Snyder's office says he isn't planning to announce if he'll appoint an emergency manager, but instead to provide an update on where things stand.

The Republican governor has less than a month to decide whether the state will take over the city's broken finances and send in someone to oversee a recovery.

Detroit can just barely avoid running out of cash this fiscal year--if it implements some key measures.

That’s what the city’s finance officials told its financial advisory board on Monday.

The premise to avoid insolvency involves some immediate cuts, some deferred payments—and a few big “ifs.”

Some of those measures are so-called “structural changes,” like mandatory furlough days, layoffs, and possible pension and health care changes. Others defer payments or take one-time opportunities to grab
cash.

Roy Roberts, the state-appointed emergency financial manager for Detroit Public Schools, will keep his job after the Michigan Supreme Court rejected a lawsuit attempting to remove him.

The Supreme Court refused to overturn an earlier decision by the Court of Appeals ruling that Roberts’ office remains in effect under Public Act 72—the state’s emergency financial manager law of 1990.

The lawsuit was brought by Robert Davis, a union activist and school board member in Highland Park.

Steve Carmody / Michigan Radio

Governor Rick Snyder has signed an updated local emergency manager law to replace the one rejected last month by voters.

The governor says the new law is an improvement because it gives local governments more options to come up with a plan to dig out of a financial crisis.

Critics say it's not very different from what voters said "no" to. It still grants emergency managers sweeping authority over local governments that are taken over by the state.

Pages