Emergency Manager Law, Emergency Managers — March 13, 2012 at 12:42 pm

Tuesday afternoon Michigan Emergency Manager news round-up – 3/13/2012


In our last episode…

  • Detroit may avoid Emergency Manager by agreeing to a consent agreement
    This morning, Michigan Governor Rick Snyder presented a consent agreement to Detroit city officials. This is basically his last offer before imposing an Emergency Manager on Michigan’s largest city.

    Michigan Radio reporting news from the Associated Press:

    Councilman James Tate says the deal includes an advisory committee that would remove some power from elected officials. Tate says the consent agreement reads more like a “one-way edict.”

    If approved, the deal could keep the state from appointing an emergency financial manager in Detroit, which faces a $197 million budget deficit.

    The Detroit City Council, Mayor Dave Bing and a 10-member financial review team were expected to assess the proposal. Council wasn’t expected to vote on it Tuesday.

    Snyder has said he prefers a consent agreement, which would allow Detroit to fix its own finances.

    Snyder said as recently as this week that he does not want to impose an EM on Detroit:

    With only two weeks remaining before a state-appointed financial review team is expected to recommend possible intervention in Detroit, Michigan Gov. Rick Snyder says he will push local leaders to sign a consent agreement so he does not have to appoint an emergency manager.

    “I’ve been happy to do this agreement for months,” Snyder said this morning during a “Pancakes and Politics” forum at the Detroit Athletic Club. “The thing about the agreement is, you have to have somebody on the other side agree.”

    Congressman John Conyers is already saying he’s against the consent agreement. From his statement:

    As an elected representative of the City of Detroit and the Ranking Member of the House Judiciary Committee, I strenuously object to the “consent agreement” being proposed by Governor Synder. The agreement essentially asks the City to forfeit its citizens’ rights in exchange for no tangible benefit. Moreover it fails to address the concerns raised under Public Act 4 concerning the violation of voting rights and collective bargaining rights, nor does the agreement provide any sort of mechanism to guard against abuse and mismanagement by appointed overseers.

    My concerns include the following:

    • Waiver of Legal Recourse – The agreement requires the City to abandon its ability to contest any aspect of this appointment, even those inconsistent with the suspension of the EM law; It does not authorize the City to obtain independent legal representation; and could force citizens to lose their legal rights to challenge any unconstitutional provisions.
    • No Financial Assistance from State – It provides the City with no bridge loan or financing whatsoever, in contrast with the precedent set in all jurisdictions outside of Michigan. The agreement specifically acknowledges that it would impose significant new costs on the City, with no assistance from the State, even though the State owes more than $200 million in foregone revenue sharing proceeds.
    • No Compliance with the Open Meetings Act – The agreement specifies that the Open Meetings Act applies to meetings of the new Financial Advisory Board, but does not eliminate the legal loophole being used by the State to avoid the law.
    • Unfettered Authority Granted to State – It grants the Mayor the powers available under the EM Law, but only for such period and such terms as the Snyder Administration determines, and even those powers are subject to the new Financial Review Board. The agreement also seeks to grant these very broad powers to other officials.
    • Weakens Collective Bargaining – While one provision states the agreement does not grant the Mayor power to negate collective bargaining agreements (CBAs), other provisions give the Mayor legal authority to modify or terminate CBA’s. The proposed agreement also unilaterally terminates the City’s duty to bargain under the Public Employees Retirement Act. Includes “least favored nations” clause effectively forcing unions to negotiate against each others’ interests.
    • Does Not Protect Against EM Appointment – If at any time the Board is not happy with the manner the elected officials are operating under the consent agreement they can still recommend appointment of an EM or filing for bankruptcy.
    • Indefinite Operation by Unelected Officials – The agreement’s provisions can continue at the whim of the Board, even if there is no valid financial reason for its continuation. It also requires the City to pay $1 million to Board Members if a court determines their termination is for any reason other than fraud, gross negligence, or willful misconduct. This is unnecessary and gratuitous.

    Meanwhile, Detroit Mayor Dave Bing is suggesting selling city lots for only $200 while backing away from statements about turning over historic Belle Isle to the state, though he may seek assistance in maintaining and managing it.

  • Detroit Emergency Manager Review Team avoids going before judge
    As I reported a couple of weeks ago, Ingham County Judge William Collette issued a rather stunning rebuke to the Emergency Manager Review Team for Detroit (and their boss State Treasurer Andy Dillon) for avoiding holding court-ordered open meetings by forming a sham subcommittee.
    An Ingham County judge this afternoon ordered all 10 members of the Detroit emergency financial review team to appear in his courtroom March 12 to answer why they should not be held in contempt for attempting to evade his finding that the review team is subject to the Open Meetings Act by forming a smaller committee to meet in secret.

    Judge William Collette issued the order at the request of attorneys for Robert Davis, the employee of AFSCME who filed open meetings lawsuits against financial review teams in both Detroit and the Highland Park school districts.

    Davis said the five-member subcommittee created by the review team on Tuesday is clearly an attempt to circumvent Collette’s finding that review teams are public agencies subject to the open meeting law.

    Dillon and his crew have given up that ridiculous notion and disbanded the subcommittee.

    The state team reviewing Detroit’s finances has avoided a scheduled court date—and possible contempt of court–by disbanding a controversial sub-committee.

    An Ingham County Circuit Court Judge had ordered the team to appear in court Monday.

    That same judge had earlier ruled the team must meet in public to comply with the state’s Open Meetings Act. They did, but quickly formed a sub-committee that had planned to meet in private to “advise the committee of the possible statutory options for its recommendation” to Governor Snyder.

    But State Treasurer Andy Dillon, who leads the review team, says they decided not to push the issue.

    “There is a lot of work to be done,” Dillon said. “We’ll just do it outside of the sub-committee. I’m working on it with my staff, and what we’ll do is we’ll present to the full review team the options that we see.”

    I still think they should go to court and maybe be fined.

    By the way, you can read a pretty decent article about Robert Davis, the guy who took them to court over violations of the Open Meetings Act HERE.

Much more after the jump.

  • More proof Emergency Managers don’t work: Hamtramck city employees to face payless paydays
    Hamtramck, one of the Michigan cities that once had an Emergency Financial Manager who left after he “solved” their problems, is in trouble again:
    The news shocked fire fighters, police and staffers at city hall. Hamtramck’s city manager says they will not make payroll as early as this month.

    According to the memo distributed Tuesday and obtained by Action News, William Cooper, the city manager, claims Hamtramck is facing a compounding economic storm. Cooper cites the closure of American Axle’s plant, plummeting property values, a decrease in Poletown revenues, as well as retiree costs as the reasons for Hamtramck’s dire financial forecast.

    While Cooper says Hamtramck is not broke yet, the city is moving closer to the brink. The memo states employees may get paid on March 28th, but definitely won’t get paid at the beginning of April and beyond. […]

    Hamtramck is no stranger to financial turmoil. Before the current Emergency Manager law was passed Hamtramck was under the partial control of an emergency financial manager. The EFM parted ways with the city in 2007.

    Meanwhile, the Hamtramck City Council fired the City Manager who released the memo.

    With payless paydays just weeks away council members and the mayor voted to fire City Manager William Cooper. The mayor had the tie-breaking vote and she sent him packing.

    It was a heated meeting Wednesday night, with council members trading barbs — accusing each other of not properly guiding the city out of its current mess.

    City officials who voted for Cooper’s ouster say he did not properly plan for Hamtramck’s crisis and did not provide contingency plans. Council members must come up with $500,000 before next month otherwise all city staffers will go unpaid.

  • Inkster avoids imposition of an Emergency Manager
    Inkster has avoided an Emergency Manager by having their consent agreement approved by Governor Snyder.
    Governor Snyder today signed off on a consent agreement for the city of Inkster.

    The move will help the southeast Michigan city avoid getting an emergency manager.

    A team appointed by the governor to review the city of Inkster’s financial condition recommended a consent agreement with the city. The Inkster city council signed off on the agreement last week.

    The governor says the consent agreement will allow the state to “assist Inkster’s elected officials, in moving their city forward and returning it to a solid financial footing.”

    Governor Snyder believes this is the right path forward for many cities saying, “The City of Inkster is a terrific example of how this process can work.”

  • Detroit Public Schools Emergency Manager renews for another year
    Detroit Public Schools Emergency Manager Roy Roberts will stick around for one more year:
    Detroit Public Schools emergency manager Roy Roberts will continue with the district for another year, an attorney for the district said during a Michigan Supreme Court hearing today.

    During oral arguments related to a case against Roberts filed by Highland Park schools board secretary Robert Davis, Heather Meingast said that Roberts would be signing a new contract with the district today.

    Roberts’ next term will begin May 16, according to a state treasury department email to MLive.

    Roberts is the district’s second emergency manager after Robert Bobb. During his first term, Roberts has scheduled the closing, chartering or consolidation of 20 schools. Next week, Roberts is set to announce 15 more schools to be turned over to the state’s Educational Achievement Authority, which he also chairs.

  • Imposition of an Emergency Manager for Muskegon Heights schools supported by some, not by others
    Some parents and students in the Muskegon Heights school district are eager for an Emergency Manager to takeover.
    An emergency manager is the only solution, several community members said after watching a state review team interview the Muskegon Heights school board.

    The team adjourned without announcing a decision, and did not indicate when it might do so. It’s recommendation is due by April 2.

    Joe Moore, who said he has a child in Muskegon Heights High School and one in the middle school, said Muskegon Area Intermediate School District Superintendent Dave Sipka did a good job of keeping the schools afloat after he assumed leadership of the troubled district, but its problems are too large to fix locally.

    “We need that manager,” he said.

    However, others are not so supportive. School Board Vice President Ronald Jenkins believes they can handle the situation themselves.

    Jenkins said he initially voted to ask for an emergency manager and will support the manager if the review team evaluating the district’s finances determines one is still necessary, but he believes the board now has the tools needed to move forward with a deficit elimination plan.

    “Information has been provided so we can make good conscious decisions,” Jenkins said. “We’re moving in the right direction.”

    Jenkins acknowledged the board will still have to make tough decisions and negotiate concessions from the teacher’s union, but said the lack of communication that led to the district’s financial predicament has been addressed.

    The teachers union believes more time is needed.

    Krista Abbott, a Uniserv director with the Michigan Education Association,…requested a chance to address the team to present plans teachers have for reinvigorating” the district.

    “The information we provide we think would establish that bringing in an emergency financial manager would be premature,” Abbott said. “If you give this district a chance to work collaboratively with the association, to work collaboratively with this community, they can turn this around and maintain control locally. …For this district to survive, means this community survives.”

    Links to more MLive coverage of the Muskegon Heights situation HERE.

  • Flint Mayor Dane Walling supports referendum to repeal Public Act 4
    Dane Walling, the mayor who was left without a job the same day he was elected when Flint Emergency Manager Michael Brown was appointed on Election Day, supports Michigan Forward’s effort to place a referendum for the repeal of Public Act 4 on the November ballot:
    In his modified State of the City Address tonight, Flint Mayor Dayne Walling said the public deserves to weigh in on the state’s emergency manager law.

    More than 200,000 signatures were collected by the state coalition Stand Up 4 Democracy in an effort to get a referendum of the law, formally known as Public Act 4, on the ballot for possible repeal.

    “When the signatures are verified, Public Act 4 deserves a vote and it needs to be a real vote,” Walling said, adding that he hopes many members of the public will turn out to the polls.

    Walling will participate with Benton Harbor Emergency Manager Joe Harris, Deputy State Treasurer Roger Fraser, and Michigan Forward CEO Brandon Jessup in public forum in Ann Arbor next Monday. I’ll be writing more about this in the next couple of days.

  • Flint Emergency Manager may borrow up to $20 million to settle city debts
    Flint Emergency Manager Michael Brown is will have the city borrow as much as $20 million in the form of bonds to help resolve their debt crisis.
    Shortly after, Flint Mayor Dayne Walling delivered a brief State of the City Address that was largely positive and optimistic, focusing on new businesses in Flint and the growing health care and higher education sectors.

    Brown said that while there are indications that the national economy is recovering, “it will be some time before we see the effects in Flint.”

    He announced that the city will pursue borrowing between $15 million and $20 million in the form of fiscal stabilization bonds in order to cover past deficits, all while working to plug a projected $20 million gap between revenues and expenses in the 2013 budget.

    City auditors also spoke of a nearly $9 million general fund deficit and said the city borrowing from the water and sewer funds left those accounts in a deficit.

    “We cannot continue to do everything the same way we’ve done it,” Brown said, speaking to the Flint City Council.

    The city is meeting with the employee labor unions, he said, “to discuss how we can cooperatively work to achieve cost savings,” but also said he expects the city’s workforce to shrink as the city addresses its budget.

Okay, THAT was exhausting…

By the way, did I mention that this is now heading for Indiana, too? Oh, yeah. I did.