emergency manager

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People opposed to Michigan's financial managers law are intensifying their efforts to get a repeal on the November ballot. The law gives financial managers broad powers over financially troubled school districts and local governments.

A group called the Committee to Stand Up for Democracy has organized signature-collection efforts Saturday in 11 cities. Supporters say the law is needed to help financially troubled entities get back on their feet. Opponents say it's a power grab that let’s unelected appointees throw out union contracts and take authority away from elected officials.

(photo by Steve Carmody/Michigan Radio)

Flint's new city budget begins July first.  But it's still not clear if city employees will be laid off to make the numbers work.    The Flint city council approved the city's budget on Monday.   The spending plan is based partly on a 15% wage and benefit concession by Flint's city unions.   Concessions that the unions have not agreed too. 

Even though the new budget takes effect July 1st, Flint mayor Dayne Walling insists layoffs are not imminent.   He says decisions on possible staff cuts will be based on monthly reviews of Flint's budget situation.  

 “There is a reality that you can only spend a dollar one time.    And once that dollar gets spent…than its not available for services in January or next Spring.”   

Flint has already laid off dozens of city employees during the past year, as the city struggles with a multi-million dollar budget deficit.

Lindsey Smith / Michigan Radio

Elected officials in Benton Harbor are debating the best way to deal with their state-appointed emergency manager. Two Benton Harbor commissioners support the city’s emergency manager, Joe Harris. The remaining seven are united against Harris.

Harris was appointed more than a year ago to fix Benton Harbor’s finances. Since then he’s taken away the commission’s powers to take action or pass resolutions.

These seven commissioners all believe Harris’ power will ultimately prove unconstitutional in court. But they don’t agree on what they should do next.

Lindsey Smith / Michigan Radio

Emergency Manager Joe Harris signed two orders this week to discourage city commissioners determined to fight his orders.

(photo by Steve Carmody/Michigan Radio)

For the first time, a state appointed emergency manager has permission to void a union contract in a Michigan city. The state Treasurer’s office gave its approval to Pontiac’s emergency manager Monday to void the city’s police dispatchers’ contract.   Pontiac’s policing duties are being taken over by the Oakland County sheriff’s department. 

Robert Sedler is a constitutional law professor at Wayne State University.  He believes the courts would find the decision to void the contract a ‘reasonable’ one. 

 “What I think makes this reasonable in the Pontiac situation is that it is part of a transfer of law enforcement from the city of Pontiac to the sheriff.”

 The Michigan legislature expanded the powers of state appointed emergency managers this year. 

There are numerous groups considering legal challenges to the law.

user dt10111 / Flickr

Another Michigan emergency manager is seeking to use broad new powers granted to him by the new emergency manager law.

Pontiac emergency manager Michael Stampfler is working to void a contract with the city's police dispatchers union.

The city's police department voted to dissolve itself last March because of the city's budget problems.

The city and the Oakland County Sheriff's Department are working to draw up a contract to police Pontiac's streets, but a contract with the dispatcher's union is holding up the process, according to the Oakland Press.

From the Oakland Press:

Pontiac Emergency Manager Michael Stampfler has submitted a letter to the Michigan Department of Treasury requesting to end the contract with the police dispatchers’ union.

“I don’t know that anyone has yet to use ... the section of the legislation saying we want to do this,” said Stampfler, adding work is being done to have the transition from the Pontiac police to the Oakland County Sheriff’s Office completed by July 1.

The proposed contract for law enforcement and dispatch services hasn’t been signed because of the contract with the dispatchers’ union.

Officials from the Michigan Association of Police, the union representing the dispatchers, were not available for comment.

Some groups are planning to challenge the new emergency manager law in court. Nullifying a union contract could be one place were a challenge to the law begins.

flickr / joshuadavisphotography

Governor Rick Snyder passed new laws expanding the power of Emergency Financial Managers, and there’s been debate over whether or not Emergency Managers are able to turnaround the municipalities and districts they’re assigned to. Michigan Radio’s Jenn White spoke with Gary Olsen, Former Director of the Michigan Senate Fiscal Agency and Senior Policy Fellow at Public Sector Consultants. Here is the interview:

Do Emergency Managers leave their cities or districts in better financial condition?

As Micawber said in the Charles Dickens novel David Copperfield:

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

The city of Ecorse ran into misery when it spent more than it was taking in.

An emergency manager appointed to oversee Ecorse's finances in late 2009 found the city was overspending. To make up for the overspending the city spent $2.4 million in revenues collected from the Ecorse Public Schools, and $4.2 million collected on behalf of Wayne County.

In 2010, a judge told the city that the money had to be repaid - a prospect that would have forced the city to raise taxes significantly and "devastated the local economy," according to Governor Snyder's office.

Now, Governor Snyder has signed legislation which supports the city in its plan to sell bonds to pay off the debt overtime.

In a press release, the Governor said:

“Ecorse didn’t get into financial trouble overnight.  Trying to undo years of mismanagement in one fell swoop would create an overwhelming burden on city residents and businesses that are already struggling,” Snyder said.  “The goal is to get Ecorse back into financial health in a responsible way.”

The Governor's office said the city could have issued bonds without state approval, but the new legislation "gives greater assurance of repayment to those who will purchase Ecorse’s bond debt."

Lindsey Smith / Michigan Radio

One of the four petitions Benton Harbor City Commissioner Dennis Knowles filed to recall State Rep. Al Pscholka (R-St. Joseph) was approved by Berrien County election officials this morning.

Knowles needs to collect 6,718 valid signatures in Pscholka's district before the November 18th deadline. But the signatures are only valid for 90 days, so he has until that deadline to collect that many signatures before they expire.

The state is looking at requests to investigate the finances of two Michigan cities.

Jackson’s Mayor has asked for a state review of the city's books.  That's the first step towards the state appointing an Emergency Manager. 

Karen Dunigan says the city needs the state’s help, even though it has a balanced budget.    She says the budget covers payroll and not much else, and meanwhile, the city has $80-million in debt, with no plan to pay anything on the debt except the interest expenses. 

A group announced plans today to ask voters to repeal Michigan's Emergency Financial Manager law.  Recent changes to the law give broad powers to state appointed financial managers.  The EFM's have the authority to void union contracts and strip power from local elected governments and school districts. 

Brandon Jessup leads a group called 'The Campaign to Build Michigan'.   He says the law violates the rights of Michiganders.  Jessup says his group hopes to get approval for petition language next month.  

He says they hope to collect enough signatures to get the question put on the ballot in 2012. 

The mayor of Flint is expected to take a step this week toward asking the state to review his city's finances. It's a move that could potentially lead to a state appointed emergency manager taking over control of the city.   

The Flint Journal reported over the weekend that Mayor Dayne Walling plans to ask the Flint city council to consider requesting a state  review of the city's finances.   

 It's a move the mayor reportedly hopes will give him or the city council the power to alter city union contracts.   It could also lead to the appointment of an emergency manager.  

Less than a decade ago, Flint's finances were run by an emergency financial manager.    But recent changes in the law have given emergency managers much more power, including the ability to effectively strip  elected officials of their authority and throw out union contracts.  

Flint is struggling with a large projected budget deficit, and recently sold bonds to pay off a portion of the city's debt.

Benton Harbor continues to make headlines in national news as the city works to stabilize its finances.

Joe Harris was appointed as Emergency Manager last April by former Governor Jennifer Granholm.

Since then, Governor Rick Snyder has signed into law the expansion of an Emergency Mangers' power. Under the law, emergency managers can strip power from locally elected officials and dissolve union contracts.

Joe Harris is the first emergency manager to take advantage of the new law.

Michigan Radio's Jennifer White spoke with Harris. Here's the interview.

During the interview, Harris said he wanted to correct the record - that he didn't strip the elected officials in Benton Harbor of their power. Harris says their power was effectively stripped when the new Emergency Manager bill was signed into law by Governor Snyder:

"In that act... mayors, commissioners, and chief administrative officers of any city that was under the control of an emergency manager lost their authority.

I never stripped them. And so the news report that's all over the country that I stripped them of their authority is incorrect. They had no authority.

The only authority that they can have is the authority that's provided to them, or is given to them by the Emergency Manager."

On April 14th, Harris issued this order.

Lindsey Smith / Michigan Radio

Election officials in Southwest Michigan rejected language for a recall petition against State Representative Al Pscholka this morning. They rejected the language because they said it wasn’t clear enough.

Benton Harbor City Commissioner Dennis Knowles filed the recall petition. Knowles wants to recall Pscholka for supporting the state’s new law that gives emergency managers more power over cities and school districts with major financial problems.

Knowles says the new laws “trash democracy.”

 “For specific reasons, that it allows super powers for dictatorship for a emergency financial manager; doing away with municipal governments and school boards.”

The law has provisions that could allow an emergency manager to ask the governor to remove elected officials from office.

Pscholka's response

Pscholka says most of people he talks to in Benton Harbor say they support the law. 

“Most of them really are kind of sick and tired of the financial mismanagement, the patronage, and really what some folks would describe as corruption.”

He says residents in Benton Harbor are being used as political pawns. He notes the city has had financial problems for several years.

Lindsey Smith / Michigan Radio

People came from as far away as Wisconsin to protest Governor Rick Snyder’s appearance in a parade through St. Joe and Benton Harbor Saturday afternoon. The governor of Michigan is invited to be the Grand Marshall of the parade every year.

“They asked me some time ago to participate in this wonderful festival and event and I’m happy to be here. And to the degree that people are exercising their democratic rights, I respect that. But it’s mainly about a quarter of a million people having a great day enjoying a wonderful part of Michigan.”

About 150 protesters mixed in with those gathered to watch the Blossomtime parade. They followed Snyder throughout the parade chanting “Recall Rick now!” and “Shame!” But there were some cheers of support mixed in with the demands to recall Snyder.

Lindsey Smith / Michigan Radio

Elected city leaders in Benton Harbor are calling on Governor Rick Snyder to remove the city’s state-appointed emergency financial manager.

Snyder approved broader powers for emergency financial managers earlier this year.

Benton Harbor’s city commission adopted a resolution (full resolution available here) declaring those new powers unconstitutional.

Thursday Benton Harbor’s emergency financial manager Joe Harris rescinded that and any further resolutions adopted by elected city officials (full order available here), in accordance with an order he issued earlier this year.

Harris stripped power from elected city officials in March. That included the power to adopt resolutions, even non-binding ones.

Managing the Mess

May 5, 2011

When the news broke yesterday that retired General Motors vice president Roy Roberts would be the new Detroit Public Schools czar, the first thing I thought of was Henry Ford.

This is not because I have attention deficit disorder. No, I thought of something brilliant Hank the First once observed about his own career.  Ford said if he had asked about transportation needs in the 1890's, nobody would have said they needed an automobile.

They would have said they wanted a faster horse. For years, various people have been trying in various ways to beat life into a dying horse called the Detroit Public Schools.

They’ve tried appointed boards and elected boards; emergency managers, all sorts of superintendents and infusions of cash.

Nothing has worked very well. Sometimes they identify a particular problem, but the overall health of the system has remained poor. Now if you are not from Detroit, you may not think this matters much to you. Except that it does.

We as a state will all suffer, economically and otherwise, if kids can’t get a functional education in our largest city. Plus, the seeds of many of the problems that have ruined Detroit’s schools are present and growing in other school systems, urban, suburban and rural school systems across the state.

Update:

Robert Bobb, the outgoing emergency manager for Detroit Public Schools, has released a statement regarding Roy S. Roberts, the man who will replace him in that position:

Roy Roberts is an exceptionally strong choice to continue the heavy lift of restructuring and reforming the interconnected finances and academics of Detroit Public Schools.

His position as an icon in the African American community and in the City of Detroit will be of huge benefit to DPS and also a role model for DPS students.

Both the Detroit City Council and Mayor Dave Bing say this is a crucial week for getting the city’s budget in order. Detroit will end the fiscal year in June with a budget deficit of at least $180 million. Both Mayor Bing and the Council declare they’ll work together to avoid a state takeover of the city’s finances. Both say much of that will depend on whether city unions and pension boards will agree to concessions.

Lindsey Smith / Michigan Radio

Benton Harbor’s Emergency Manager says he hopes to get the city back on solid financial ground by the middle of next year. People in the community are still trying to figure out where they fit in to Joe Harris’ plans.

(official portrait)

Governor Rick Snyder may hear some jeers when he speaks at this week’s commencement ceremony at the University of Michigan.  Unions and other groups plan to rally outside Michigan Stadium during the governor’s speech.

  Rob Gillezeau is the president of the Graduate Employees Organization.  His group and others plan to voice their displeasure over cuts to education funding and the voiding of union contracts.  

Lindsey Smith / Michigan Radio

Politicians and national media have been parachuting into Benton Harbor lately. They’re talking about the city’s emergency manager, Joe Harris. Harris was the first emergency manager in Michigan to exercise broad new powers under a state law passed last month, essentially removing power from elected city officials.

This week I sat down with many of those officials and Benton Harbor residents to hear what they think of the situation.

Steve Carmody / Michigan Radio

Detroit Mayor Dave Bing says the city is at a tipping point and could be assigned an emergency manager if the state doesn’t let it extend income and utility taxes.

Bing met privately with Governor Rick Snyder and lawmakers today.

He  says if the state does not allow Detroit to extend taxes, the city will lose about $100 million in revenue:

"Then I think we’re looking at an emergency financial manager," said Bing, "and I don’t think the state wants to go in that route, nor do we. So we need the support from the Legislature up here to make sure they make the necessary changes to give us the support that we need."

Bing needs legislation for the tax extension because of Detroit’s massive population loss. That drop disqualified the city from laws written for the state’s largest city.

Bing also wants Detroit’s 48 unions to make large concessions to help close a $200 million deficit.

Lindsey Smith / Michigan Radio

The emergency financial manager of Benton Harbor, Joe Harris, says the city will have a budget surplus in the coming fiscal year.

Harris says that’s because the new powers given to emergency managers allowed him to do his job more effectively.

Harris says that means he could leave Benton Harbor after two years of work, rather than the five years he originally thought it would take to turn the city around.

But not everyone is thrilled with the work Joe Harris has done, or with the new laws that granted him sweeping power over Benton Harbor.

Some big names have focused on Benton Harbor recently.

The Detroit City Council heard some advice about the city’s budget situation Tuesday. Council fiscal analyst Irvin Corley told them that Mayor Dave Bing’s proposed budget is “mostly reasonable.” But Corley also warned that Bing’s proposal contains more than $200 million in “soft” revenue that might not materialize. Corley says the Council should cut the Mayor’s budget further, and the two sides need to find an agreement that truly addresses the city’s fiscal problems.

The Michigan Legislative Black Caucus will hold a press conference today at noon with the Reverend Jesse Jackson in Benton Harbor.

Also in attendance will be Congressman John Conyers and Lansing Mayor Virg Bernero.

Joe Harris, the city's state-appointed emergency manager, recently stripped power from local officials in Benton Harbor under the state's new emergency manager law.

The group says they will work to uphold voting rights as they plan to challenge the legality of the Emergency Manager law.

Fred Durhal, the chair of the Michigan Legislative Black Caucus, said they "oppose this Draconian legislation.":

"Our coalition is prepared to ask the Justice Department to review this legislation and we will fight litigation to challenge its constitutionality," said Durhal.

Reverend Jesse Jackson is quoted in the media advisory saying, "the wind from Benton Harbor is blowing toward Detroit. This legislation usurps democracy by taking away voters rights in Michigan. Our constitution protects democracy, this inalienable right is non-negotiable."

user brother o'mara / Flickr

Lawsuits challenging emergency manager law start

Detroit's General Retirement System and the Police and Fire Retirement System have filed a lawsuit challenging the new emergency financial manager law.

From the Associated Press:

The City of Detroit's two pension boards have filed a lawsuit seeking to block the state's new emergency financial manager law, calling it unconstitutional.

The Detroit News and the Detroit Free Press report the lawsuit was filed Monday in U.S. District Court in Detroit and names Gov. Rick Snyder and Treasurer Andy Dillon. The lawsuit claims that emergency financial managers could remove pension board members for no reason.

Snyder's office says the governor believes in the constitutionality of the law, otherwise he wouldn't have signed it.

Benton Harbor's Emergency Financial Manager, Joe Harris, was the first EFM to use broad new powers granted to him by the state.

Cleaning the lead out of Detroit homes

The federal government and private foundations will help fund a project to help get rid of environmental hazards in Detroit homes. From the Detroit Free Press:

The federal government will kick in $1 million to help make 100 homes in a targeted area of Detroit lead-free and safe from other hazards -- such as mold and radon -- and to train workers in environmental remediation techniques.

Deputy Secretary Ron Sims of the U.S. Department of Housing and Urban Development will present the funds to Mayor Dave Bing today.

The Freep reports that a study showed "60% of children in public schools in the city who scored below grade level on standardized state tests had lead poisoning."

Foundations, nonprofit partners, and state agencies are also expected to invest in the project.

Snyder to announce new leader for the Michigan Department of Corrections

Governor Rick Snyder is expected to make the announcement this morning. From the Detroit News:

Snyder selected Jackson County Sheriff Dan Heyns to run the department, which takes the largest share of general fund dollars in the state's budget, according to two people familiar with the decision.

Snyder will make the announcement publically later this morning at a news conference in the governor's press auditorium, across from the Capitol in Lansing.

Photo of Robert Bobb, Former Emergency Manager at DPS
Sarah Hulett / Michigan Radio

The controversial emergency financial manager law gives broad powers to state-appointed officials who are brought in to help struggling cities and school districts.

It was signed into law last month by Governor Rick Snyder, now, as MPRN's Rick Pluta reports, two Detroit pension fund boards have filed a lawsuit challenging the state's emergency financial manager law. They say the law "illegally threatens contracts and collective bargaining agreements."

Under the law, emergency managers can strip power from locally elected officials and dissolve union contracts.

Pluta spoke with the emergency manager in charge of the Detroit Public Schools, Robert Bobb. He says these legal challenges won't help: 

"Because the legislation as it is is to kind of help escalate the resolution of problems and issues in localities and in school districts and any type of prolonged litigation does not really help advance what needs to be advanced to right the ship," says Bobb.

The Detroit News reports that the lawsuit was filed by Detroit's General Retirement System and the Police and Fire Retirement System:

The law "represents an imminent threat to the constitutional rights of plaintiffs and other members of the Detroit Retirement Systems," the funds' lawyer Ronald A. King wrote in the lawsuit.

More than 300 local officials and prospective emergency managers are in Lansing today and tomorrow to be trained in the state's new fiscal crisis law.

The law gives sweeping authority to emergency managers named to run school districts and local governments that can no longer pay their bills.

Terry Stanton of the Michigan Department of Treasury says the goal is for the state to intervene earlier to avoid the drastic step of a state takeover.

A group opposed to Governor Rick Snyder submitted language today for a recall petition.  It’s the beginning of what may be a long process. 

The group, Michigan Citizens United, is behind the recall campaign.    Gerald Rozner is the group’s spokesman.  He says Gov. Snyder deserves to be recalled for signing legislation that gives state appointed financial managers broad powers to void city union contracts and plans to increase taxes on pensioners. 

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