We regret the error

[Caricature by DonkeyHotey from photos by Anne C. Savage for Eclectablog]

While the State of Michigan has stepped in to save the failing Pontiac schools from closing its doors due to lack of funding, they have NOT done this for Buena Vista schools. Rather, the federal government has, albeit in an absurdly lame fashion. The school is closed for the remainder of the school year but the feds are providing money for a voluntary “enhanced skills camp”.

Congressman Dan Kildee has been outspoken on this and released the following statement:

The students of Buena Vista have a constitutional right to an education and deserve the same educational opportunities as other Michigan children, and that means being in a classroom full-time to complete their school year. I do not believe that a voluntary camp amounts to a proper education for the children of Buena Vista.

It is dangerous precedent to allow school districts to close six weeks early as a cost-saving measure, only to replace a child’s education with a voluntary camp. Such a patchwork fix fails to live up to a commitment to provide a quality education for students. Children deserve better. Simply shutting down the schools early hurts the students of Buena Vista and ultimately punishes the children for a problem they didn’t create.

Congressman Kildee appeared on All In With Chris Hayes on this issue last night and spoke also about the number of kids in this impoverished area who receive meals at school but who will no longer do so for the remainder of this school year:

The Detroit Free Press is excoriating the Snyder administration for their lack of action:

The big difference [between Pontiac schools and Buena Vista schools] seems to be that Pontiac schools developed an acceptable deficit elimination plan; Buena Vista hasn’t.

But that shouldn’t matter. The state — not local school districts — carries the ultimate responsibility to provide a free and adequate public education for Michigan children. When local officials fail, the state should step in.

At least that’s what Gov. Rick Snyder’s team has said in the past. When they crafted Michigan’s tough new emergency manager law, the rationale was simple: the state must provide for the health and well-being of its residents, even if it means displacing elected officials, breaking union contracts, or rewriting a law rejected by Michigan voters. {…}

The same principle should apply when school districts can’t make payroll. Students have a constitutional right to be educated, and that shouldn’t be abrogated by local malfeasance or incompetence.

Fiscal responsibility and good management at the local level are important, but in an emergency situation, the priority should be assuring that children’s education can continue. {…}

[I]n the short-term, Snyder needs to just be sure that the state meets its constitutional obligation to provide public schooling for the kids who don’t have it.

Snyder’s belief in his constitutional responsibility to care for all Michigan residents is correct. When local governments are unable to provide the services constituents fund, the state must step in. Public education is not expendable.

This is an abject failure of the Snyder administration. It is a stain on their time in office and it’s scandalous that they are sitting on over a half billion dollars in the Rainy Day Fund (as well as discovering they have taken in more than a half billion dollars they weren’t planning on in addition to that) and refuse to act.

For shame, Governor Snyder. For shame.

MSNBC journalist Ned Resnikoff has more on this HERE. I spoke with him yesterday to help sort out some of the vagaries of Michigan politics and how our school districts are organized.

I’m sure another corporate tax cut is all that is needed

[CC image credit: ~kawaii-bubble-wrap | deviantART]

I mentioned this briefly in my post this morning about Buena Vista schools being closed for the fourth consecutive day but now the Detroit News is reporting it as a near-certainty: the Pontiac School District is out of money and will not meet their next payroll. They also have no money to pay vendors that provide custodial, transporation, and other services.

The results of a preliminary review of the Pontiac School District’s finances reveal it has not made sufficient progress on eliminating its $37.7 million deficit, Flanagan said in his May 8 report to district officials.

Pontiac Schools had been using cash advances from Oakland Intermediate Schools to meet its May 3 payroll, Flanagan says, adding, “There are no further funds that can be advanced by Oakland Schools that would be sufficient to meet the May 17, 2013, payroll obligation” of $875,000.

The district also is unable to meet other vendor obligations including transportation, utilities and custodial services as well as a $1.5 million in technology bills owed to Oakland Schools, according to the state report.

According to the Department of Education, the district’s deficit has been steadily increasing since 2009, when it reported it was $8.5 million in the red.

The shortfall grew to $12.2 million in 2010, $24.5 million in 2011 and $37.7 million in 2012, in spite of proposals to reduce expenses, cut wages, trim staffing and sell buildings. The funding gap is expected to continue to grow through 2014, according to the Department of Education report. {…}

The school system has been under FBI investigation since late 2011, submitted late audit reports and has failed to get state approval for its most recent Deficit Elimination Plan.

As a result, the state Department of Education has withheld the district’s state school aid payments for March and April.

The district superintendent, Brian Dougherty, resigned last week, effective May 17th.

Pontiac has been hard hit by recession and offshoring of the vehicle manufacturing that once made it a boom town. Its demise and the economic crisis in its schools are likely to be blamed entirely on unions or inept/corrupt leaders but the fact is that Pontiac is in serious trouble on a broad scale. It’s not simply a matter of “balancing the books” by an Emergency Manager or weeding out corrupt school and governement officials. We need a rescue plan for our failing urban centers and we need one quickly. The Snyder administration’s band-aid approach of sending in accountants to slash union wages and benefits, privatize city and school services, and turn the school systems over to for-profit charter schools will NOT solve these problems.

The sooner we all recognize this fact, the sooner we’ll figure out what needs to be done to address it.

Pontiac – we build excitement?

There’s a pretty well-written, well-researched and fair piece about Michigan’s Emergency Manager crisis written by Ryan Holeywell at Governing.com. It focuses heavily on Pontiac and their history with Emergency Managers including their current one, Louis Schimmler.

There wasn’t a lot in the article that I didn’t already know but there were two things that caught my attention.

The first thing was this statement:

Regardless of the outcome, some believe the debate is moot: Pontiac residents elected a mayor and council to run the city. The state gave them Schimmel instead. Schimmel isn’t accountable to anybody in Pontiac. He answers to the governor and an appointed state treasurer. Yet Schimmel disputes the premise that democracy has been subverted in Pontiac. “The law I’m operating under was passed under a democracy,” Schimmel says. “It wasn’t a law handed down by a king. It was passed by a legislature.”

This is, of course, absurd. None of the Republicans currently in power ever mentioned supporting anything even remotely close to Public Act 4 (PA4), Michigan’s Emergency Manager law. This exists due largely to the hard work done by the Mackinac Center, a group that Schimmel was an employee of until they recently scrubbed him from their site. In fact, PA 4 is largely the result of Schimmel’s work there.

In 2005, Schimmel wrote a piece for the Mackinac Center for Public Policy, an influential conservative think tank in Michigan, that detailed reform he thought the state should make to its existing emergency management law, which he believed lacked the tools needed to enact a serious municipal turnaround. He recommended that emergency managers be given immunity from lawsuits, the authority to assume powers held by the mayor and city commission, and the ability to cancel labor contracts. All those provisions made it into PA4, and today Schimmel is able to take full advantage of them.

For him to suggest that PA 4 is in any way the product of a democratic process is beyond laughable. If he believes this, he’s delusional. If he doesn’t, he is a liar.

The other part that struck me was this:

Th e greatest criticism of Michigan’s law is that it does little to ensure a long-term turnaround of the state’s most troubled cities. The problem, say local officials in Pontiac and elsewhere, is that the state has failed to build up business and encourage urban renewal. Schimmel is candid that his primary concern is not economic development. That duty, he says, is “beyond my purview.”

I guess that I should be gratified that he’s admitting something that I have been saying all along: Emergency Managers do not solve and are not interested in solving the core problems that brought the cities under their control to the point of crisis.

But I’m not gratified. I’m mortified.

We have put these people in charge of failing cities and given them only chainsaws and axes with which to solve their problems. There is no way to build up our cities using these tools of destruction; no way to prepare them for a better future or to encourage them to grow and flourish.

And THAT is the crux of our problem.

Meanwhile, back in Pontiac, their school system is now headed for an Emergency Manager.

And so it goes.

[Image credit: City of Pontiac]

I find your quaint city constitutions mildly amusing…

At a speech criticizing Michigan’s Emergency Manager law yesterday, former Pontiac Emergency Manager Michael Stampfler was talked about the importance of investing in capital infrastructure and something he called civic capital — engagement of the local citizens in the process of governing.

Then he suggested that city charters were just “interesting reading”.

Here’s video from Bruce Fealk of the Rochester Citizen and Communications Director for Michigan Rising:

AUDIENCE MEMBER: The first question I have is did you, at what point, what did you think that our charter meant to your job in our city?

STAMPFLER: The charter is maybe just interesting reading when, in the emergency management situation.

Bruce asks more questions and gets more answers from Stampfler in the next two segments. Stampfler does not back, at one point saying that it’s okay to shove aside locally-elected officials when there’s corruption involved.

Yes, it’s a bad deal that elected officials would be excluded, but sometimes they have to be, perhaps, because of corruption. If they really were part of the group that drove the bus into the ditch, it’s a little bit difficult to say, “Okay, well, let’s go talk about how we’re going to do it better.”

So far as I know, there has not been a single allegations of wholesale corruption in ANY of the cities operating under the thumb of an Emergency Manager. There are, of course, in any city government, isolated cases that are made public after which that official is removed. But to remove the entire government suggests, at least in Stampfler’s mind, that these cities are in trouble because of widespread corruption throughout the whole. This is entirely untrue. If that were the case, it would be a simple matter of arresting the corrupt officials and putting them on trial. Removing them would allow the democratic process to proceed apace and the corrupt official to be replaced by someone who isn’t legitimate.

But that is not at all what is happening here. It makes you wonder if Stampfler needs a bit of ‘civic capital’ of his own if this needs to be explained to him.

I agree with him that there needs to be much more civic involvement and investment in capital infrastructure to help these cities get back on their feet. These are the things that can begin to help our struggling, aging manufacturing cities get back on their feet and become economically, socially and politically viable again. These are the things that will help them recover from the perfect storm of globalization and economic recession that brought them to this point in the first place.

But his suggestion that this can only be done by wiping away the elected governments because they are making that less convenient?

That’s about as anti-American as anything I have ever seen in this country during my entire life. And it’s happening here in my very own backyard.

More on Stampfler’s speech at the Wyandotte Patch and the Detroit Free Press.

[CC image credit: Blood for Oil]

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Oh. NOW you tell us.

Former Emergency Manager of Pontiac Michael Stampfler is giving a presentation to the Rotary Club of Wyandotte about why Public Act 4 – Michigan’s Emergency Manager law — isn’t working and cannot work.

Stampfler says, “I do not believe EMs can be successful — they abrogate the civic structure of the community for a period of years then return it virtually dismantled for the community to attempt to somehow make a go of it. The program provides no structure for long term recovery, and that is why most communities slide back into trouble, if they experience any relief at all — a vicious cycle. The Public Act is not sufficient and the state bureaucracy isn’t up to a performance offering any significant success — as can be noted from the communities repeating.”

This is interesting commentary coming from a guy who privatized Pontiac’s water treatment to a company, United Water, facing 26 felony indictments for violations of the Clean Water Act.

United Water Services Inc., the former contract operator of the Gary Sanitary District wastewater treatment works in Gary, Ind., and two of its employees, were charged today with conspiracy and felony violations of the Clean Water Act in a 26-count indictment returned by a federal grand jury, the Justice Department announced today.

United Water Services Inc., and employees Dwain L. Bowie, and Gregory A. Ciaccio, have been charged with manipulating daily wastewater sampling methods by turning up disinfectant treatment levels shortly before sampling, then turning them down shortly after sampling.

~SNIP~

According to the indictment, the defendants conspired to tamper with E. coli monitoring methods by turning up levels of disinfectant dosing prior to E. coli sampling. The indictment states that the defendants would avoid taking E. coli samples until disinfectants had reached elevated levels, which in turn were expected to lead to reduced E. coli levels. Immediately after sampling, the indictment alleges, the defendants turned down disinfectant levels, thus reducing the amount of treatment chemicals they used.

~SNIP~
The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the Criminal Investigation Division of the U.S. Environmental Protection Agency, the FBI and the Indiana State Police. The case is being prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Justice Department’s Environmental Crimes Section.

It will be interesting to see what Stampfler thinks should be done to correct what is insufficient about Public Act 4. More incentives and power to privatize public assets maybe? Or does that “abrogate the civic structure of the community”???

You don’t have to be a jerk about it

Last spring when I published exclusive audio of Benton Harbor Emergency Manager Joe Harris talking about crushing the unions, I was shocked at what he said and, more to the point, how he said it:

So, I’ve laid off twenty-five people. I’ve laid off nine police officers. I’ve laid off four fireman. I’ve haven’t’ done that yet but this Friday — after the townhall meeting. Oh, they know it’s comin’! They know it’s comin’! And I’ve laid off four EPW — I had nine major equipment or heavy equipment operators but only five pieces of heavy equipment. So, I laid off four EPW workers. I laid off Human Resources and payroll because we outsourced that.

So, I just wanted to wind up by just giving you some things that … and, by the way, you’ve already heard all of this but I can’t over-emphasize the fact that you need to read the charter, you need to read the collective bargaining agreements — the CBA. You’ve gotta know what you can do and what you can’t do. And I found so many holes in the fire — the police is tight — in the fire collective bargaining agreement, they don’t have a leg to stand on. The fact of the matter is we’ve got them where we want ‘em!

“They don’t have a leg to stand on. The fact of the matter is we’ve got them where we want ‘em.”

Nice. (You can listen to the full audio with a transcript HERE.)

Then there was Pontiac Emergency Manager and former Mackinac Center employee Louis Schimmel, nearly gloating about his “tyranny”:

MLive reporter Jonathon Oosting: Does the law hand power to tyrants?

Schimmel: I guess I’m the ‘tyrant’ in Pontiac then if that’s the way it is. For the last 20 some years, Pontiac being my hometown, I’ve met with mayors and and ocuncils over the years and I’ve told them the management they are displaying will catch up with them some day. And by mismanagement I mean they’ve negotaited union contracts that are just outrageous.

It’s this attitude of complete condenscension and near-derision that really has struck me. If you are going into an area that is struggling with offers and/or demands to help, it seems to me you’d be trying to build bridges, mend fences and create useful partnerships. It’s going to be difficult, to be sure. These are difficult situations and nobody is happy about where they are, how they got there or about taking the painful steps that are necessary to move forward. It requires leadership, diplomacy and tact.

None of these are considered qualifications for Michigan’s Emergency Managers, that much is clear.

And now, today, in the middle of a contentious and highly flammable situation in Detroit when tensions are high and people are pissed, the day after Governor Rick Snyder handed them his final ultimatum in the form of an Consent Agreement that’s little better than an Emergency Manager, the Governor chose to say this:

“You have a community that has been struggling for decades, a community that clearly needs help in terms of resources and support, so isn’t the right answer that they partner with people who want to help?” Snyder asked during a conference of the Michigan Association of Broadcasters.

“If you have a problem, is the answer to say ‘Go away,’ or is it to hold up your hand and say ‘We need help’? That’s a cultural problem they have there,” Snyder said. “The inclination so far has been to say ‘go away.’ I don’t believe that’s a good answer, and there are good people there, so it’s a cultural challenge to get over that boundary.“

In the middle of a situation that so many people believe or are beginning to believe is racially-motivated, to call it a “cultural problem” seems almost intentionally provocative. When asked if race is playing a role in some of the backlash against his proposal, the Governor dodged the question, saying instead that “Detroit got into this issue not because of race but because of population decline”. The question about whether or not the response to the state takeover had anything to do with race went unanswered, but his comment about it being a “cultural problem” suggests that he believes it is so.

I don’t want to believe that Governor Snyder and his administration are racists. I don’t want to believe that the Republicans that passed this legislation are racists. But when you look at how the law has played out and the artless, insensitive things that are said along the way, you can’t help to think that they are at the very least racially clueless. They seem to have no idea whatsoever what the impacts of their actions and words are going to be.

In Flint, things are playing out a bit more smoothly. That’s in large part because Mayor Dayne Walling and Flint Emergency Manager Michael Brown get along fairly well. They have a decent relationship from the past and that connection is helping things move forward in a way that’s somewhat less draconian and undemocratic than in other cities.

If the Governor Snyder, his administration, his Emergency Managers and the Republicans who created this situation want things to move forward in a positive, helpful way, they have certainly gotten off very much on the wrong foot. I don’t know if it’s even salvageable at this point but, if I were them, I figure out damn fast how to get some bedside manner that doesn’t patronize the people they are impacting and treat them all as incompetents and/or criminals.

If Governor Snyder truly expects Detroiters and their elected leaders to “partner with people who want to help”, he’d be well advised to start acting a hell of a lot more like a “partner”.

[Photo credit: Anne C. Savage. Used with permission.]

This past year, the Emergency Manager of Pontiac at the time, Michael Stampfler signed a five-year contract with United Water to run their water and wastewater treatment systems. The move was said to save Pontiac an astonishing $2.8 million per year.

I broke a story that made national news about the fact that, by hiring United Water, Stampfler had hired a company facing a multiple felony counts by the U.S. Justice Department for violations of the federal Clean Water Act.

United Water Services Inc., the former contract operator of the Gary Sanitary District wastewater treatment works in Gary, Ind., and two of its employees, were charged today with conspiracy and felony violations of the Clean Water Act in a 26-count indictment returned by a federal grand jury, the Justice Department announced today.

United Water Services Inc., and employees Dwain L. Bowie, and Gregory A. Ciaccio, have been charged with manipulating daily wastewater sampling methods by turning up disinfectant treatment levels shortly before sampling, then turning them down shortly after sampling.

~SNIP~

According to the indictment, the defendants conspired to tamper with E. coli monitoring methods by turning up levels of disinfectant dosing prior to E. coli sampling. The indictment states that the defendants would avoid taking E. coli samples until disinfectants had reached elevated levels, which in turn were expected to lead to reduced E. coli levels. Immediately after sampling, the indictment alleges, the defendants turned down disinfectant levels, thus reducing the amount of treatment chemicals they used.

~SNIP~

The case was investigated by the Northern District of Indiana Environmental Crimes Task Force, including agents from the Criminal Investigation Division of the U.S. Environmental Protection Agency, the FBI and the Indiana State Police. The case is being prosecuted by the U.S. Attorney’s Office for the Northern District of Indiana and the Justice Department’s Environmental Crimes Section.

In November 2011, current Emergency Manager Lou Schimmel fired some key Public Works employees and United Water took over operations completely.

Well, it turns out that there is trouble in paradise. In their effort to cut costs to the bone at the expense of public employees, residents last week have been reporting issues with the quality of their water. Daily Kos commenter “ChemBob” dropped this comment on one of my posts at the site:

United Water has taken over operation of our water and wastewater treatment here in Pontiac. Happened in July. We have an emergency manager, naturally.

Never had a problem here before (been in house about 1.3 years now), but during the past week or slightly more, we and the neighbors have had rusty brown tap water three separate days. We’ve all called United, multiple times. We saw a truck at the fire hydrant once, but the rusty water was back two days later. We ask for a call back to let us know what they are doing, but they never return our calls.

This is the beauty of privatization: they really aren’t responsible to the people, their customers, anymore, and I doubt the emergency manager could care any less.

I inquired further and what ChemBob shared with me as well as United Water’s rather shocking response is after the jump.

[W]e never had a problem before (granted we’ve only lived in Pontiac for about 1.3 years).

The first indication of a problem, on Jan 17 I believe, was a tub full of bath water that, apparently, came out clear and then turned brown while [my wife] was bathing. This sounds to me like ferrous iron oxidizing to ferric iron when exposed to the oxygen in the atmosphere and precipitating. My first thought (paranoia) was that there might be an expensive repair needed in the line to our house. Michele called our next-door neighbor and spoke with her. She ran her tub full of water and the same thing happened. The neighbor then called United Water, who apparently sent a truck out to purge the fire hydrant on the corner. Why this would help, I don’t know.

The water seemed fine until the 19th, at which time it did the same thing only with a lighter rust color. I called United Water, had several calls ahead of me, left a message notifying them of the problem and asking them to call back and let me know what they would do to correct it. Naturally they never called back. We again called the neighbor, who again had the same problem. Turns out that the day before (I think it was the day before) she had spoken with our neighbor across the street who had apparently noticed the water problem some time before us and had been boiling her drinking water; I don’t know if the second neighbor had notified United, but it seems likely that she did. The first neighbor also called United Water on the 19th, possibly also on the 18th. As far as we can tell, they’ve done nothing to respond to our concerns, including no return phone calls. Michele’s bath yesterday (I’m a shower guy, didn’t notice) was apparently grey-colored water with black flecks in it.

I haven’t been in touch with any others in the neighborhood to determine whether they have called United. We are in the [redacted] block of Cherokee Road in the historic Seminole Hills district of Pontiac. I mention this both because this is one of the nicest neighborhoods in Pontiac (probably with the highest property taxes, but I don’t know that for certain) and because many of us have steam boilers and radiators for our heating. This sort of contamination in the incoming water is not just a health issue (although it can be a serious one), but can be very damaging to the boilers, causing sediment accumulation that can result in improper operation and potential failure of the systems.

As you probably already know, United has been cited for violations in other locations with regard to falsifying water treatment results, etc. It certainly seems to me that the emergency manager and City of Pontiac should have taken that into careful consideration before contracting United. They should at least have an independent person or company to monitor their performance.

Drinking water quality was one of the things we have always taken for granted in this country. Our towns and cities always had the health and well-being of their citizens as a priority. Apparently the only thing that matters for the emergency managers is the bottom line and the people can be damned.

I contacted United Water to ask them (a) what the source of the contamination is and (b) why residents’ calls to them were not being returned. Here is the answer I received:

Thank you for passing this information along to us Chris. We polled our utility field and office staffs and cannot find any record of a report of this issue over the past several weeks. We certainly want to get to the bottom of this as soon as possible but do not know where to begin. If we can get any contact information from the party raising this issue, we will be happy to follow up and investigate the matter yet today. They can email us at UWPontiacWater@unitedwater.com or call at 248-335-6399. Again, thank you for bringing this to our attention.

In other words, United Water does not appear to maintain records when complaints about contamination of the drinking water of their residents are received. No call logs. No record. Nobody knows nuthin’. That’s public service on a budget, clear and simple.

Pontiac seems to be in the bulls eye in terms of mismanagement by an Emergency Manager. Recently, U.S. Congressman Gary Peters stepped in to help save the city millions in federal grant funds that Schimmel essentially gave away.

When Stampfler privatized Pontiac’s water & wastewater treatment to United Water, many questioned how on earth there could by $2.8 million per year in money to be saved. I suggested that hiring a company facing a serious 26-count federal indictment might be the reason.

It now appears that the cost-cutting move is beginning to have a serious and worrisome impact on the residents of Pontiac.

If you or anyone you know lives in Pontiac and are having issues with water quality, please contact me using the email link under my logo. This is a potential public safety and health issue and I will be following it closely.

UPDATE: This is an update from ChemBob at Daily Kos:

United Water told our neighbor when she called in that no one was doing any work on the water in the area. She was told that they would send someone out to flush out the fire hydrants. That is what we observed about an hour later or so. There was no work going on that we saw prior to that.

Some folks are saying that this is simply the flushing of hydrants, totally normal. If that’s the case, why didn’t United Water let the residents know as happens pretty much everywhere else? (I have personally gotten these notices.) Also, too, why did they tell ChemBob’s neighbor that they weren’t flushing hydrants in the area? It seems very clear to me that customer service is something they have cut to save money. So much for Governor Snyder’s call for better “customer service” by the government for Michigan residents.

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Yesterday, I wrote about how Pontiac Emergency Manager Louis Schimmel signed an agreement with Oakland County to manage monies from a substantial HUD grant. This boneheaded decision, it turns out, would have resulted in a loss of upwards of $800,000 per year for Pontiac. Thankfully, Congressman Gary Peters stepped in to prevent this from occurring.

Federal and local politicians lined up Wednesday to announce they undid a move taken by Pontiac’s state-appointed emergency manager that would have cost Pontiac thousands in federal funds.

While they were at it, they took time to slam Emergency Manager Lou Schimmel’s method of management.

U.S. Rep. Gary Peters, D-Bloomfield Township — flanked by Oakland County Commissioner Tim Greimel, D-Auburn Hills, Pontiac City Council President Lee Jones and other city officers — said he prevented Pontiac from missing out on millions of dollars in Housing and Urban Development (HUD) Community Development Block Grant money at risk because of a mismanaged contract signed by Schimmel.

“We had a situation in Pontiac where (Schimmel) was going to shift block grant money away from city to the county,” said Peters.

Had the shift occurred, Peters said, it would have meant a “significant loss” of funds — up to $800,000 — to the city.

Peters suggests that Schimmel did this simply to make his own life easier and so that he wouldn’t have to deal with management of the grant money. This, he says, is exactly when Emergency Managers are the wrong approach for Michigan.

“Emergency managers come in and are focused on balancing budgets in the short term, and because of that they make decisions that aren’t necessarily in the best interest of the city,” he said.

“They’re interested in taking things off books to make their job a little easier. That maybe be good for them but it’s not good for the city.

“It highlights why we have to have elected officials, accountable to the people.”

Meanwhile, Lou Schimmel is defending his decision, even while he admits it would hurt Pontiac financially.

Yet Schimmel said his decision was his only option at the time, and necessary to preserve any part of a program that has been cited repeatedly for actions such as paying service providers for work that could not be verified and shoddy record-keeping.

He said HUD deadlines forced his hand — he did not want to have the city administration involved in mismanaging funds continue to be responsible for them.

“HUD made the recommendation,” Schimmel said. “It did mean we’d lose some funds to have good management. Oakland County runs a stellar program.”

What’s odd about this statement is that Schimmel is actually the person in charge of managing the funds now. He is in complete control over the government of Pontiac.

The Huffington Post has more from Congressman Peters:

Peters, who has publicly opposed Michigan’s emergency manager law, sees Schimmel’s handling of federal funds administration as part of a larger problem with emergency managers.

“Replacing democratically elected officials with an emergency manager creates an environment where decisions are made with no accountability and no commitment to the long term benefit of the city,” Peters said. “The governor can appoint an emergency manager, but he can’t guarantee that his decisions are in the best interests of Pontiac residents.”

Schimmel, who has managed Pontiac since September, is not the first emergency manager to have his cost-cutting strategies questioned. Last week, Michigan Radio reported that an independent audit of Benton Harbor, controlled by Emergency Manager Joe Harris, showed a large deficit there: The city spent about $653,000 more than its operating budget in fiscal year 2011.

HuffPo also discovered that Schimmel could actually still reject this plan.

According to Laura Feldman, public affairs specialist for HUD’s Midwest region, Schimmel has until Friday to decide whether to go forward with a cooperative or joint agreement that will determine how the Pontiac’s HUD funds for 2012-2014 will be allocated.

“HUD, Pontiac and Oakland County are only exploring the options at this point,” Feldman wrote in an email to HuffPost. “HUD is making sure that the Emergency Manager has a clear understanding of all the options available.”

Pontiac already lost nearly a half million dollars in its grant allocation last year due to cuts in the block grant program. Louis Schimmel could potentially make that well over a million dollars per year. It’s not in his job description to ensure the future economic revival of Pontiac or to work to build up the neighborhoods and housing stock. His job is to balance the books and leave. This is exactly the point I have made repeatedly: Emergency Managers do not solve the problems that created the financial emergency in the first place. They simply put a band-aid on a gaping wound and leave. It’s also exactly the reason why all three Michigan cities that have seen Emergency Managers come and go are back in dire financial straits again.

I am often told that I should shut up about this if I don’t have the solution to offer myself. My response is this: I don’t have to have the solution to know that this solution is wrong just like if I eat food that tastes bad, I don’t have to know how to make the food taste good myself to know that it’s bad.

With Emergency Managers, all I have to do is look at the results: stripping away local democratically-elected representation, a disparate impact on minorities, and clear, obvious evidence that Emergency Managers not only don’t work but that they often make decisions that aren’t in the best interests of the municipality in their rush toward “efficiency”. Looking at this empirical evidence tells me that this solution is disqualified — it, in fact, simply is NOT a solution at all.

This is shocking to me (though I suppose it shouldn’t be.) Pontiac’s Emergency Manager Louis Schimmel that all but gave away millions of dollars dedicated to the City of Pontiac due to a single decision he made as EM. He was able to do this with no accountability because he is, after all, completely in control of the entire government there.

Thankfully Congressman Gary Peters stepped in to literally save the day. Now millions of dollars that would have transferred to Oakland County with no strings attached will now be going to Pontiac, the intended recipient.

Take a look at the press release sent out today by Rep. Peters. I think you’ll be as shocked as I am. Even an Oakland County Commissioner realizes that this would have been devastating to Pontiac. As Rep. Peters says, this is Exhibit A why Emergency Managers are bad for Michigan.

UPDATE: Congressman Peters’ Act Blue page is HERE. He deserves to be rewarded for this. So reward him : )

U.S. Rep. Gary Peters successfully works to correct mismanagement of multi-million dollar decision by Pontiac’s Emergency Manager
U.S. Rep. Peters: “Replacing democratically elected officials with an emergency manager creates an environment where decisions are made with no accountability and no commitment to the long term benefit of the city”
Pontiac, MI – Today U.S. Rep. Gary Peters announced that he successfully worked to prevent the City of Pontiac from missing out on millions of dollars in Housing and Urban Development (HUD) funding for the Community Development Block Grant (CDBG) program which was at risk because of a mismanaged contract Pontiac’s Emergency Manager signed. Within a month of his appointment, the Emergency Manager entered into an agreement that attempted to relinquish Pontiac’s status as a direct recipient of CDBG funds, and instead enter into an agreement with Oakland County that would allow the county to receive Pontiac’s share of funding as part of their “Urban County” arrangement. Because of this decision, Pontiac could have missed out on millions of dollars in funding over three years. Additionally, the contract did not include any legal requirement binding Oakland County to spend the already depleted funding in Pontiac. Under the federal statute authorizing the CDBG program, had Pontiac relinquished its status as an “Entitlement City,” it would have been stuck with the arrangement for at least three years.

In December 2011, Congressman Peters was notified by HUD that Pontiac was to receive no CDBG funding for Fiscal Year 2012. Upon investigation he realized that the increase in funding to Oakland County did not fully offset Pontiac’s losses. He immediately worked with local elected officials and HUD to determine what could be done.

U.S. Rep. Peters learned that Pontiac had a number of options to eliminate the administrative burden and expense of administering the CDBG funding. Entering into Oakland County’s Urban County arrangement was one of these options, but the City could also subcontract with the County to administer the program on its behalf. The Emergency Manager and Oakland County chose the former option, even though they knew it would result in millions of dollars less CDBG funding for Pontiac residents and an important loss of local control and accountability.

At U.S. Rep. Peters’ insistence, HUD performed a comprehensive review of the agreement entered into by the Emergency Manager and Oakland County. As a result of U.S. Rep. Peters’ intervention, HUD determined that Pontiac’s decision to relinquish its status as a direct recipient of funds would not take effect in time to impact the FY12 CDBG allocations. This decision comes just days before the FY12 CDBG allocations are required by law to be finalized. It is expected that the Emergency Manager and Oakland County will enter into a new agreement that allows Oakland County to administer the funding on Pontiac’s behalf, but does not cost Pontiac residents millions of dollars in funding and legally requires the funds to be spent in Pontiac.

While this is an important victory for the families of Pontiac, U.S. Rep. Peters argued that the real lesson here is that replacing democratically elected officials with so called emergency managers that focus on short term budget goals instead of long term economic development. This is not the right way forward for Pontiac or other cities in Michigan.

“Replacing democratically elected officials with an emergency manager creates an environment where decisions are made with no accountability and no commitment to the long term benefit of the city,” said U.S. Rep. Gary Peters. “I have a hard time understanding why Pontiac’s emergency manager thought it would be in the best interest of the city to sign a contract surrendering millions of dollars in Economic Development funds that Pontiac is entitled to and then turn the rest over to Oakland County with no strings attached. I’m glad that I was able to intervene to ensure that Pontiac will be able to receive millions more in funding. During times like these, we shouldn’t have any officials turning down job creating federal funds and this episode should serve as hard evidence about how the emergency manager law is not serving affected communities well.”

“The Governor can appoint an Emergency Manager, but he can’t guarantee that his decisions are in the best interests of Pontiac residents,” said Pontiac City Council President Lee Jones. “While I know it’s critical to restore Pontiac to fiscal soundness, I will not accept cuts that diminish the capacity of the city to grow, develop, and thrive in the future.”

“The decision of the Emergency Manager to relinquish Pontiac’s status as a direct recipient of CDBG funds would have cost the city millions of dollars without saving taxpayers a penny,” said Oakland County Commissioner Tim Greimel. “Perhaps more importantly, it would have deprived Pontiac of the opportunity to decide for itself how federal economic development funds will be spent for years into the future. I thank Congressman Peters for listening to our objections to the previous arrangement and making sure that the administration of the funds is done in a way that doesn’t cost Pontiac any money and works in the best interest of the community.”

HUD uses a different formula to calculate CDBG allocations for disadvantaged communities like Pontiac than it uses for relatively affluent areas like Oakland County. As a direct recipient of funding, Pontiac’s allocation is determined under formula B which provides more money per capita than formula A in order to account for the greater need of those citizens. In FY11, Pontiac received $1.4 million. If the agreement between the Emergency Manager and Oakland County had been considered binding by HUD, in FY12 Pontiac would have received $0 and instead Oakland County would have received additional funds attributable to Pontiac’s inclusion in their Urban County. However, because Oakland County’s allocation is determined under formula A, the additional amount Oakland County would have received in FY12 attributable to Pontiac would have been less than Pontiac would have received on its own. HUD will release official CDBG allocations on Friday, but U.S. Rep. Peters’ office has estimated that Pontiac could have received $750,000-$850,000 less each year it was part of the Urban County arrangement.

The Emergency Manager juggernaut continues to roll unabated in Michigan. In early December, I reported that Muskegon Heights school district was requesting an Emergency Manager and that a state review had been initiated.

Yesterday, the Snyder administration added Highland Park schools to the list.

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.

In other news, Quincy Stewart of Pontiac had petition language approved for a recall of mayor Leon Jukowski who was elected in 2009 while the city was already under the control of an Emergency Manager. Stewart objects to Jukowski being a paid consultant to EM Louis Schimmel, believing it is a conflict of interest.

Recall petition language against Pontiac Mayor Leon Jukowski was approved Tuesday by the Oakland County Election Commission.

Pontiac resident Quincy Stewart submitted the language, which claims that Jukowski has a conflict of interest because he is both the city’s mayor and a paid consultant to the city’s emergency manager, Louis Schimmel.

Jukowski was elected in 2009 and has always worked under an emergency manager, with no authority over the city’s operations and zero pay since mid-2010. Schimmel hired him as a consultant in September and bumped his pay in December to $50,000 a year, plus benefits. The last mayor in Pontiac who didn’t operate under an emergency manager made $120,000 a year, plus benefits.

Recall supporters have 180 days to collect 3,237 signatures in order to get the recall on the ballot.

Jukowski says it’s not a conflict of interest.

Jukowski says it’s not a conflict, and that emergency managers often get outside help.

“He’s spending less money on outside attorneys, and decided to use one of the locals to help him navigate through this. And that person is me.”