emergency manager

this one

Sarah Hulett / Michigan Radio

Update 4:58 pm:

State Treasurer Andy Dillon says the district’s money problems are deep and troubling. He says the state will advance the school district $188,000 so it can meet payroll tomorrow. 

"I have no comfort that the district has a handle on their finances," said Dillon. "The numbers move hourly. We have three people down there today trying to get a handle on how much they actually need for payroll. And I’m very uneasy about it, because I can’t tell you in the middle of February that they’re going to make payroll."

But school board member Robert Davis says the state has contributed to the district’s financial woes by requiring that it close a career academy that enrolled 1,500 students.

"Their plan and intent is to fold the Highland park School system into the Detroit Public School system," Davis said. "That’s what this is all about."

Highland Park Schools' student population has declined 58% percent since 2006. 

State officials say their objective is to keep the district’s doors open through the end of the year. But they say that will be difficult. The district needs a cash infusion of at least $3 million to get through the school year. But the maximum the state is allowed to advance under hardship cases is $2 million.

The district's cumulative deficit is $11.3 million. That’s about $10,000 for every student enrolled.

12:56 p.m.

Governor Rick Snyder has declared a financial emergency in the Highland Park school district, Rick Pluta reports. The district will have a chance to challenge the finding at a January 17th hearing before the governor names an emergency manager.

In a statement released today, the Governor says:

“It is critical that students in the Highland Park School District get the education they need and deserve. For that to continue, the Highland Park School District must have stable finances. Through the comprehensive reviews that have been conducted, it is clear the district faces monumental financial challenges.”

On January 4th a state review  panel recommended the governor appoint an emergency manager to fix the school district’s "financial emergency." The financial review team had been looking at the Highland Park School District’s books since November. Earlier this month, Steve Carmody reported:

The panel’s report to the governor finds the school district is $11 million in the red. That works out to about $10 thousand for every student enrolled.  The school district’s deficit has grown by $3 million in just the last year. The school district’s debt has grown, as its student population has fallen. Nearly 3,200 students attended Highland Park schools in 2006. This year, fewer than a thousand students are enrolled.

Emergency managers are already running the Detroit public schools,  as well as the cities of Flint, Pontiac, Ecorse and Benton Harbor. Financial review teams are also looking at Detroit and Inkster's books.

Pontiac’s emergency manager says the federal government has agreed to a proposal that lets the city keep some grant money it was expected to lose.

Pontiac has a history mismanaging federal grant money.  So when federal officials from the Department of Housing and Urban Development asked the city to hand administration of Community Development Block Grants over to Oakland County, its emergency manager, Lou Schimmel, agreed.

Lindsey Smith / Michigan Radio

The State Treasurer’s office is reviewing an independent audit of Benton Harbor’s finances for the 2011 fiscal year. The audit shows the city still spent more money than it made during its first year under a state appointed emergency manager.

Still a lingering operating deficit

Update 2:00 p.m.

An emergency manager may soon take charge of the Highland Park School District. A state review panel today  recommended the governor appoint someone to fix the school district’s "financial emergency."  

The financial review team has been looking at the Highland Park School District’s books since November.   

The panel’s report to the governor finds the school district is $11 million in the red. That works out to about $10 thousand for every student enrolled.  The school district’s deficit has grown by $3 million in just the last year. The school district’s debt has grown, as its student population has fallen. Nearly 3,200 students attended Highland Park schools in 2006.   This year, fewer than a thousand students are enrolled.   

“It is what it is.," laments Edith Hightower, Highland Park’s School Superintendent,  "I don’t disagree with any of the statements that were documented [in the report]."    

Emergency managers are already running the Detroit public schools,  as well as the cities of Flint, Pontiac, Ecorse and Benton Harbor. Financial review teams are also looking at Detroit and Inkster.       

The state Education Department is also conducting a preliminary review of the financial status of the Muskegon Heights School District. 

1:04 p.m.

HIGHLAND PARK, Mich. (AP) - A review team is recommending an emergency manager for Highland Park Schools after determining the district is in a financial emergency.

Michigan's Treasury Department says in a release Wednesday that a final report by the 10-member independent review team has been given to Gov. Rick Snyder. Snyder has 10 days to review the report and make a decision if the district is in a financial emergency.

Highland Park is a small city partially surrounded by Detroit. The school district's budget deficit stands at $11.3 million. The Treasury Department says expenditures outpaced revenues by nearly $4 million in the last fiscal year. The district also has had an operating deficit in five of the past six years.

Enrollment has dropped from 3,179 students to 969 over the past five years.

Al Jazeera

The financial crisis unfolding in Detroit is getting national and international attention.

It's nothing new. The decline of the country's biggest manufacturing city has been news for more than four decades.

But news of the city running potentially running out of money by April is renewing more stories of Detroit's decline.

Here's how Al Jazeera covered the Detroit financial crisis in a two-and-half-minute television story last month.

Their story starts with an automated message from Mayor Dave Bing's office telling the caller that "as a result of mandatory furlough days, this office is closed":

A coalition seeking to overturn Michigan's law granting expanded powers to emergency managers appointed to run financially struggling cities and schools is continuing its petition drive.

Stand Up for Democracy says it plans to gather more voter signatures at southeastern Michigan churches the next two Sundays.

The group needs to collect roughly 161,300 valid signatures to temporarily suspend the law and make the November ballot. Group leaders wouldn't say this week exactly when they plan to turn in the signatures.

Supporters of the new law say it's needed to help fix financially troubled schools and cities. Emergency managers are operating in Benton Harbor, Ecorse, Flint, Pontiac and the Detroit public schools system.

The city of Detroit is under a state financial review that could result in an emergency manager.

Lindsey Smith / Michigan Radio

The City of Benton Harbor’s mayor is trying to start 2012 on the right foot after two years of turmoil under a state-appointed emergency manager. Elected leaders have almost no authority under the state’s emergency manager law. But the new city commission is getting ready to take back local control.

Emergency manager expects to leave in 2012

(photo by Steve Carmody/Michigan Radio)

 A new audit finds the city of Flint is still struggling with millions of dollars of debt.    But the report shows one bright spot for the troubled city.  

It´s hardly a surprise, but a new audit of Flint´s finances confirms the city ended its last fiscal year about 7 million dollars in debt.  The city´s crushing debt was one of the reasons Governor Snyder appointed an emergency manager to fix Flint´s `financial emergency´.  

Kate Sumbler / Flickr

Update 4:17 pm:

Mayor Dave Bing released this statement in response to the review team's appointment: “We will continue to fully cooperate with the state review process and the newly appointed financial review team. At the same time, my staff and I have worked through the holiday break with union leadership on my plan that seeks savings of $102 million for this fiscal year and $258 million in fiscal year 2012-13. We will continue to negotiate until we reach agreement to resolve the city’s financial crisis.”

2:50 pm:

Lindsey Smith / Michigan Radio

In the last few weeks there’s been a flurry of activity under the state’s new emergency manager law.

Yesterday, the president of the Michigan Chapter of the Rainbow Coalition David Bullock said they were prepared to use "all measures afforded to us as citizens to protect democracy," according to the Detroit Free Press.

Bullock was with the Rev. Jesse Jackson, elected officials, and others denouncing Michigan's emergency manager law as unconstitutional and likening EMs to dictators.

From the Free Press:

The Rev. Jesse Jackson joined a coalition of pastors, civil rights leaders and elected officials Thursday in Detroit to pledge strong opposition -- including civil disobedience, if necessary -- against the state's new emergency manager law.

Jackson and others likened emergency managers to dictators who wipe out the democratic process with unilateral authority to gut union contracts, sell cherished assets and slash essential services.

"We are prepared to go from education, mobilization, litigation, legislation, demonstration and civil disobedience," Jackson said during a news conference at Bethany Baptist Church on the city's west side. "We want a positive commitment to restoring democracy and economic justice for all citizens."

Later in the day, Governor Rick Snyder released a Facebook video explaining his views on Detroit's financial situation. In the video, Snyder said the state's role is to be a "supporting resource," and "my goal is to ever avoid having to appoint an emergency manger - that's a failure point."

Snyder said there were two critical issues that need to be addressed. From the video:

"One, there's a short term cash issue. We can't have the city run out of money, and hopefully the city can come up with a program to get through the crisis the mayor has talked about, about potentially running out of cash in April.

The second one issue is a very difficult one which is a long term structural solution. Because we can't continue this process. Detroit has been in a financial crisis in some fashion for decades...

The fundamental thing we need to do is  create an environment where Detoriters can have a good life, and that gets down to some basic services. And we need to make sure those basic services are being provided consistently for the long term because that's not happening today."

At lunchtime yesterday, I got a news alert that the state’s preliminary review team found Detroit’s finances a mess.

Lindsey Smith / Michigan Radio

Michigan schools superintendent Mike Flanagan says a review of the Benton Harbor schools finds evidence of "probable financial stress." But Flanagan is not recommending a deeper, 60-day review. He says that’s because the district has taken “several steps in recent days to correct the deficit including:”

Steve Carmody/Michigan Radio

Flint’s emergency manager is giving back some responsibilities to the city’s mayor and city council.  

One of the first things Michael Brown did after the governor appointed him was to eliminate the pay and benefits for Mayor Dayne Walling and the entire Flint city council. He also canceled future city council meetings. 

This week, Brown reinstated 60 percent of the mayor’s salary, as well as his full benefits. Mayor Walling will also get some of his powers restored, including his role in economic development, master planning, intergovernmental affairs, and community engagement. Walling is also a member of an advisory panel for the emergency manager. 

In a written statement, Walling says "Manager Brown has followed through on his commitment to make this a collaborative process that involves elected leadership and engages residents." 

The emergency manager also is letting each member of the city council collect seven thousand dollars a year in pay, or about half of their former annual pay, but with no benefits.  

The Flint city council will have a little less to do than the mayor. The emergency manager will only permit the council members to attend public meetings in their respective wards, as directed by him. The Flint city council will meet once a month, but only to address items on the emergency manager’s agenda.  

The emergency manger was appointed to fix Flint’s ‘financial emergency’ that has the city mired in debt.

Lindsey Smith / Michigan Radio

Teachers in Benton Harbor have agreed to an across-the-board cut of pay and benefits. Teachers ratified the contract with a vote of 85 yes and 65 no. Tuesday afternoon the school board voted 5 to 2 to approve a new contract that will reduce teachers’ pay by 10-percent beginning in February (the contract runs through August 2012). Teachers will pay 20-percent of their health care benefits.  In the past three weeks alone the school board has closed two schools and laid off 20 employees. They’ve also put buildings up for sale.

“That will help us with our cash flow and will allow us to continue our operation without a stoppage,” Superintendent Leonard Seawood said. “That’s a lot for this community to be proud of,” Seawood said, in terms of addressing the financial problems. Seawood has been with the district since August 2010. 

Muskegon Heights School Board

Tomorrow the state will begin a preliminary review of the Muskegon Heights School District’s finances. This is the first step in a process that would determine if the school district needs a state-appointed emergency manager.

Many school districts and municipalities make an effort to avoid state takeovers. But in Muskegon Heights, the school board is asking for one.

Lindsey Smith / Michigan Radio

Benton Harbor Area Schools will get results from the state’s preliminary review of the district’s finances this week. The school district blames cash flow problems on a lower-than-expected-student count this fall.

The 30-day preliminary review is the first step in a process to determine if a school district or municipality needs a state-appointed emergency manager. It does not mean one will be appointed for certain.

Lindsey Smith / Michigan Radio

City leaders in Benton Harbor are trying to come together after a turbulent couple of years under a state appointed emergency manager. The emergency manager was appointed to Benton Harbor in 2010 after ten years of deficit spending. 

Mayor-elect James Hightower hosted a workshop Friday to talk about the city’s plan for future.

“You can’t keep looking back, you have to look forward,” Hightower said. “The first step is to bring people together, get them on the mindset of thinking strategic planning, and hear some of the best practices that are happening around the state.”

user: mattileo/flickr

With the city of Flint now under an emergency manger, and the city of Detroit under preliminary financial review…we’ve been hearing a lot about Michigan’s emergency manager law.

While Public Act 4, which passed earlier this year, gives E-M’s more sweeping power, the emergency manager law itself isn’t new.

Here to take look at the first E-M law is Michigan Radio’s political analyst Jack Lessenberry.

There are a number of important debates going on in Michigan about our economic crisis, and our future.

Three of the most intense are these: 

  1. Should Detroit have an Emergency Manager?
  2. Should the Emergency Manager law itself be repealed? 
  3. And what’s the future of public education in this state, and how should we pay for it?

Virtually everyone has opinions about these issues, and I have expressed mine, on Michigan Radio and elsewhere. But it occurs to me that we may all be missing something.

State Senate GOP website

The Michigan Senate has approved a bill that would allow state officials to appoint a transition team to work with a community after an emergency manager’s term is up.  

“This is insurance to the people of those affected communities under emergency managers to make sure that there’s financial stability going forward, collective bargaining agreements, revenue estimating conferences are also a part of this process, to determine the financial stability of that community going forward,” State Sen. Phil Pavlov (R-St. Clair) said. Pavlov said it’s important the state not abandon communities coming out of financial crises.

The bill would create a transition team for a local government that’s ending its run with an emergency manager. But lawmakers could quickly adopt an alternative version next year if the state’s emergency manager law is stalled by a referendum or reversed by a court.

“The Legislature and the governor are trying to capitalize on our cities’ financial distress by appointing these emergency financial manager dictators that can oust elected officials and overtake local governments without any accountability to the community,” said Senate Minority Leader Gretchen Whitmer (D-East Lansing).

Lawmakers won't revisit the emergency manager law before January when they return from a month-long winter break.

Lindsey Smith / Michigan Radio

A former long-time auditor for the City of Detroit says he’s not surprised the city is running out of cash. “I was a Detroiter, still am at heart, for 49 years,” Harris said. Joe Harris also served as Detroit’s auditor general from 1995 to 2005. He’s been the state-appointed emergency manager in Benton Harbor since March 2010.

Steve Carmody/Michigan Radio

Flint’s emergency manager is filling out his team to run the city.   

Flint emergency manager Michael Brown announced today he’s hiring three experienced administrators to take over key positions.  

Jerry Ambrose has been the city of Lansing’s finance director for the past six years. He’ll oversee Flint’s Finance, Budget and Treasury Departments.   

Howard Croft is coming over from the private sector. The CEO of Mid-Michigan Solar will be Flint’s new Director of Infrastructure and Development. Croft will oversee Flint’s city parks, water and sewer, as well as Community and Economic Development.  

Gary Bates has previously worked as Flint’s Labor Relations director. He’s been hired to fill that job temporarily.   

Emergency manager Michael Brown has laid off about a dozen top city officials since taking office two weeks ago. He’s charged with solving Flint’s ‘financial emergency’…which includes closing a multi-million dollar budget deficit. 

Andrew McFarlane / Flickr

Detroit leaders are working to come up with cuts that will put the city on a stable financial path, but they don't think a 30 percent cut to their own budget is the right way to go.

Michigan Radio's Sarah Hulett reported on Gary Brown's austerity proposal last week. From Hulett's report:

The Detroit City Council’s budget is more than $13 million, and includes perks like city-issued cars and cell phones for council members.

Gary Brown is the Council President Pro Tem. He says like other city employees, he only pays ten percent of his health care costs. Brown’s proposal calls for upping that employee contribution to 30 percent. He says that’s a change the entire city workforce needs to accept.

"And the message, if we don’t show leadership on this issue, is that we’re asking our employees to do something we’re not willing to do," Brown said.

Brown made a similar proposal last month that went nowhere. This time he’s introduced a resolution that will get an up-or-down vote next week.

The Detroit News reports Brown's proposal has been rejected:

Critics of a law that puts managers in charge of distressed Michigan cities say they will march to the home of Gov. Rick Snyder.

A coalition of pastors and civil rights activists says the law seems to target black communities. The march is expected to include a protest at Snyder's home in Superior Township, east of Ann Arbor.

Organizers say it will be on Jan. 16, the public holiday honoring Martin Luther King Jr.

Emergency managers are in place in Benton Harbor, Pontiac, Flint and Detroit schools. Detroit's finances are also under scrutiny, the first step to a manager possibly being appointed at city hall.

The Snyder administration says race isn't a factor. It says it's simply assigning managers to cities that have poor finances.

(photo by Steve Carmody/Michigan Radio)

A divided Flint School Board narrowly approved a state mandated deficit elimination plan last night.   

The board first deadlocked whether to approve the $3.7 million deficit elimination plan. After being told the district would potentially lose some pending state funding, the board revoted on the plan and passed it.  

Linda Thompson is Flint’s school superintendent. She said the plan should help the district avoid falling under the oversight of a state appointed emergency manager. Maybe.   

A leader of an effort to overturn the state’s emergency manager law says the petition drive is invigorated by news that legislative leaders are working on a back-up plan in the event the law is halted.

Brandon Jessup with Michigan Forward said he expects that halt will happen.

“I’m predicting success based on the amount of support we’ve received from across the state. Not just Detroit, but places like Traverse City, Cheboygan County, Grand Rapids, Benton Harbor – clearly – Pontiac, Saginaw, all across the state,” said Jessup.

Jessup said it’s good that lawmakers are revisiting the issue, but they need to do more.

“I’m glad to see the Legislature start to do something, but they haven’t invited the community to come to the table to help draft the legislation, so once again this is another near-sighted attempt," he said. "Not really to solve the solution, to be a solution to the problem, but to thwart our attempts at democracy.”

Opponents say the emergency manager law gives too much authority to state-appointed officials, and robs people of the right to select their local elected leaders.

Benton Harbor, Pontiac, Ecorse, Flint and the Detroit Public Schools are all run by emergency managers.

Muskegon Heights School Board

Update 11:36 a.m. The Muskegon Heights School Board plans to take the unusual step of asking for a state takeover. And they say they want Marios Demetriou, a Deputy Superintendent at the Muskegon Area Intermediate School District, to be the person who servers as their emergency manager. 

The school district has a deficit of around $9 million, and it’s growing. The board blames rising expenses, funding reductions, declining enrollment, and soaring health care costs as reasons for its problems. The Muskegon Heights Superintendent, Dana Bryant, has decided to "give up his job" to "help with financial relief efforts." He'll retire at the end of the year.

The Muskegon Area Intermediate School District Superintendent, Dave Sipka, will act as interim Superintendent for Muskegon Heights in the meantime. If one is appointed, an emergency manager could change or end union contracts to reduce the district’s deficit.

Doug Pratt, with the Michigan Education Association, said employees in Muskegon Heights have made sacrifices, and more concessions are not the answer. “The issue really is the fundamental lack of adequate funding from Lansing, especially when you look at the most recent cut of a billion dollars from public education that the legislature enacted earlier this year,” said Pratt.

Even though they’re asking for one, an emergency appointment wouldn’t come right away. A financial review would have to be performed before an EM is appointed. The Michigan Department of Education says they have not received the official request from the Muskegon Heights School Board yet, but they’ve been notified the request is coming. Michigan Department of Education spokeswoman Jan Ellis said the state has had “great concern over the financial stability of Muskegon Heights for quite some time.” She said the Muskegon Heights deficit has grown from $800,000 to around $9 million in the last 5 years. “Their ability to repay that debt or balance their budget becomes harder and harder, just like it would with everyone’s personal budget, if they got further and further in debt,” said Ellis.

The Muskegon Heights School Board has asked for an emergency manager to run the school district.

Thursday, December 8, 11:36 p.m.

In a statement, Muskegon School Board President Avery Burrel said,

"This is the first step in a long process of rebuilding our district's operational future. With the loss of Dr. Bryant's leadership, and the load of debt we are under, my fellow board members and I felt we must set aside our personal pride and ask the State and MAISD for help. Our children are counting on us to do so, and the future of our district depends on our actions today."

9:49 a.m.

Most school districts or cities work to avoid an emergency manager appointment, but the Muskegon Heights school board is practically begging for an emergency manager.

The Muskegon Chronicle reports the school board owes more than $900,000 to the state retirement system.

From the Muskegon Chronicle:

The school board in a surprising move Wednesday voted to ask that Marios Demetriou, the deputy superintendent for the Muskegon Area Intermediate School District, be appointed the district's emergency financial manager.

It also eliminated the superintendent's position, accepting the Dec. 31 retirement of Superintendent Dana Bryant, who in a statement said that considering all the other job losses in the district “I need to be man enough to give up my own job to help with the financial reform efforts.”

There are five emergency mangers operating in the state today.

With other school districts and cities in financial distress, more are likely to be appointed.

user brother o'mara / Flickr

In wake of petition drive, emergency manager law being revamped

Lawmakers say they're trying to avoid "chaos" by retooling the state's emergency manager law (Public Act 4). A petition drive could put the question of whether or not to keep the EM law in front of voters next November. If petition drive organizers are successful, the law could be suspended until that vote takes place.

More from the Detroit Free Press:

State Treasurer Andy Dillon told the Free Press he has encouraged legislative leaders to rewrite the law. The alternative, he said, is "a pretty confused situation" if the law is suspended. State Rep. Fred Durhal, D-Detroit, said passing a new law to counter a voter repeal effort would be "a slap in the face to the Legislature and to the people." If the law is suspended, Gov. Rick Snyder said he believes Michigan would revert to a weaker emergency manager law from 1990, but there's no guarantee the courts will see it his way.

Detroit Mayor Bing reports progress with unions

Detroit could be the next city in line for a takeover by a state-appointed emergency manager. Detroit leaders say they're working on the city's financial problems to avoid a takeover. In a radio interview this morning, Mayor Bing said progress is being made with the city's unions.

From the Detroit News:

In an interview with WWJ-AM (950), Bing said he's asking the city's unions for reduced wages and reform to pension, health care and work rules because "that's where we can get the most flexibility and savings." "Yes, we're making progress," Bing told WWJ's Vickie Thomas around 7:30 a.m. "I think the unions understand at this point that they've got to be part of the solution." The expected number of citywide layoffs — about 1,000 — hasn't changed since Bing gave a televised address to the city last month. He doesn't know which departments the city will hit first, but public safety will be last on the chopping block.

Protesters tell Congressman to extend unemployment benefits

Michigan Radio's Steve Carmody reported on about three dozen picketers outside of Michigan Congressman Mike Rogers Lansing office:

They were there to draw attention to a deadline looming at the end of the month. 66,000 Michiganders may lose their unemployment benefits in January if an extension is not passed.   

Protester Ronnie Rosner says this is a bad time to let unemployment benefits to expire.  

“When the price of food…gas   and other necessities are going up …when people can not afford to buy goods and services…our whole economy suffers," says Rosner.   

Congressman Rogers’ office issued a written statement …expressing support for extending unemployment benefits.   But he says… as important…is the need for policies promoting economic growth.

(photo by Steve Carmody/Michigan Radio)

Flint’s emergency manager is taking further steps to bring the city’s finances under control.

Michael Brown’s been on the job as Flint’s emergency manager for a week. His first steps to lift Flint from its ‘financial emergency’ were to fire a half dozen top city employees and eliminate pay for the city’s elected officials. He says that alone should save the city a million dollars.

Pages