Michigan Emergency Manager news round-up – 4/17/2013


It’s hard to keep up…

It’s been awhile since I’ve done a summary of the latest news about Michigan’s Emergency Manager Law and the new surrounding our illustrious saviors dictators Emergency Managers so I thought it would be a good time to so. On a personal note, I was interviewed by freelance journalist Chris Lewis this past week for a piece he’s doing for The Atlantic so it’s clear to me that this story continues to receive national attention.

Detroit Emergency Manager Orr issues Order putting himself in charge of the City

On April 11th, EM Kevyn Orr issued Order No.3 (pdf). The key section of the order is this:

Any orders, ordinances, resolutions, appointments, approvals, terminations, appropriations, contracts, permits or other related actions of the Detroit Mayor and City Council from and after March 28, 2013, shall be submitted to the Emergency Manager for consideration, but will not be considered valid or effective unless and until approved by the Emergency Manager or his designee in writing.

The other Orders can be found HERE.

Detroit Emergency Manager Orr’s former boss/company hired to fix Detroit

In a move that some are calling a conflict of interest, Jones Day, the law firm that Orr worked for before resigning to become the EM of Detroit, has been hired to sort out Detroit’s debt issue. The meeting where the City Council approved the hiring, which passed on a 5-2 vote with Council members JoAnn Watson and Brenda Jones dissenting, was disrupted by protesters.

Council members JoAnn Watson and Brenda Jones voted against the $3.3 million contract. Council President Charles Pugh, president pro tem Gary Brown and members James Tate, Saunteel Jenkins and Andre Spivey voted yes. Kenneth Cockrel Jr. and Kwame Kenyatta were absent.

Nearly 100 protesters yelled “shame” repeatedly as they left the council’s chambers. Although Orr severed his ties to Jones Day after he was appointed in Detroit, protesters say using his former firm represents a conflict of interest.

“Jones Day is a disgrace. They are taking away our rights,” the Rev. W.J. Rideout said after Tuesday’s session. “… This is our city. We pay taxes here and they deserve to stand up for democracy (and) the wrongdoing of our people. Gov. Snyder, Kevyn Orr, Mayor Bing and some of our city council are all sitting in bed together.” {…}

As the council attempted to weigh the issue, a few dozen protesters began kneeling down, holding hands and singing and chanting. They chanted “Whose City, Our City” and sang “We Shall Not be Moved” as Pugh temporarily adjourned the session.

Detroit Emergency Manager Orr moving quickly to privatize city services

In what has become a familiar refrain, Detroit EM Orr is moving quickly to privatize city services to for-profit vendors:

Even as Emergency Manager Kevyn Orr is quietly meeting with city officials and studying Detroit’s grim financials, plans are accelerating behind the scenes to transfer selected departments and programs to outside agencies.

The likely moves could be announced as early as this week. They initially are expected to target the city’s 120-person Planning and Development Department, the demolition of abandoned property and other functions whose mismanagement are considered to be blocking deployment of federal dollars, tax revenue generation or both.

“The inertia is what causes problems for the city,” a ranking source familiar with Orr’s thinking said in an interview. “He’s got a lot of projects on the griddle and he’s ready to move soon. Things are moving pretty fast.”

Detroit Emergency Manager Orr redefines role of Financial Advisory Board

Detroit EM Orr is keeping the Financial Advisory Board put together under the City/State consent agreement active, giving them a new role in turning the city’s finances around:

[Detroit’s] Financial Advisory Board will meet today for the first time since Emergency Manager Kevyn Orr took office, amid questions about why it still exists.

The panel’s role is unclear — and some council members question whether it’s necessary — but Orr’s spokesman said he intends to keep the group even though its “scope and role” will change.

“He wants to keep them in place to provide some operational and financial accountability,” said Bill Nowling, Orr’s spokesman.

“We have a lot of people on that board who have a tremendous amount of financial experience. Having them there, looking over everyone’s shoulder is a good thing. It’s reassuring to our creditors and our taxpayers that there’s an extra level of oversight. Kevyn thinks that’s important.”

Councilwoman Brenda Jones, though, said the board is “supposed to be gone” with Orr’s arrival and has questioned why its members are still paid. Its nine members are eligible to make $25,000 per year and have met monthly about the city’s finances since Detroit agreed to a consent agreement with the state last April.

Unionized Detroit firefighters will have a new contract imposed on them July 1st

Deadline Detroit reports that unionized Detroit firefighters are going to have a new union contract imposed on them by EM Orr on July 1st:

The stark new world of Detroit under an emergency manager became clear for Detroit’s firefighters this week when the city told them they would get a new contract July 1.

And, for the first time in 80 years, there will be no negotiations.

“They are using the new Emergency Manager Law to purposely avoid bargaining with us and, instead, force new terms of employment on us,” the executive board of the Detroit Fire Fighters Association told its members in an email.

“Please be aware of our situation and operate accordingly.”

Dan McNamara, the longtime union president, said city representatives refused to be specific. He said changes could be imposed on work rules, conditions, pay, health benefits, safety, pensions and the department’s unique seniority system.

“This is important,” McNamara said. “This is historic.”

The 930-member fire union, organized in 1933, has fought over the years to keep seniority, in which longevity is the only criteria for moving up in the ranks, from firefighter to sergeant to lieutenant to captain to battalion chief.

Detroit Tigers’ opening day game was disrupted by EM protest on I-75

An increasingly common form of protest of the new Emergency Manager in Detroit is to clog Detroit highways with lines of slow moving vehicles. The most recent protest of this type was on April 5th, opening day of the Detroit Tigers home season:

A procession of vehicles traveling barely above idling speed leisurely rolled southbound on Interstate 75 in Detroit about 10:45 a.m. Friday. Spedometer dials quivered below 10 mph as 70 mph speed limit signs passed slowly on the roadside.

It was another of what some are calling a “slowdown in Motown,” an act of civil disobedience meant to protest the installation of Emergency Manager Kevyn Orr in Detroit.

“We want to do it on opening day today, not just to bring attention to Snyder’s policy and the EM in Detroit but also that there are documents that indicate Mike Illitch owes the city of Detroit some… tax revenue,” said David Bullock, an organizer. “We believe the corporate entities in Detroit should be part of the solution and not part of the problem.

“The people of the city of Detroit are not happy about the present state of affairs.” {…}

The protest began at Clay Road on the border of Hamtramck and traveled south to near the Madison exit on I-75.

Cars backed up, many honked, some drivers were visibly frustrated, one driver of a commercial truck pounding his steering wheel and visibly yelling to himself as he tailgated within feet one of the crawling protestors.

At least one protestor vehicle occupied each lane. Impatient motorists passed on either shoulder, sometimes rolling down their windows to shout at the impeding vehicle.

Suit to rid Detroit of Emergency Manager tossed out of court

Robert Davis’s ongoing effort to keep Detroit out from under the control of an Emergency Manager was dealt yet another blow last week when a Lansing Circuit Court judge dismissed his lawsuit:

A lawsuit seeking to block the appointment of Detroit emergency manager Kevyn Orr has been dismissed.

Attorney Andrew Paterson said Monday that the lawsuit became “moot” when a Lansing Circuit Court judge refused last month to hold a hearing before Orr’s hiring by the state’s Emergency Loan Board.

Paterson represents Citizens United Against Corrupt Government, headed by activist Robert Davis.

The group sued on March 8, saying Gov. Rick Snyder was unlawfully recruiting and interviewing candidates for the emergency manager job.

Former Highland Park Emergency Manager Blackwell sees his day in court, gets sentenced to probation

Former Highland Park EM Art Blackwell reneged on an agreement to take a lower salary and, instead, paid himself handsomely for his work there. He was originally indicted for embezzlement and, yesterday, was sentenced to two years of probation and must pay the city back $264,000 in restitution:

Blackwell, who was originally charged with embezzlement, took a plea deal ahead of a scheduled trial in May.

He pleaded no contest to a charge of public money safe keeping.

He was also ordered to pay $264,000 in restitution.

Blackwell was accused of raking in the money that wasn’t authorized or part of his contract.

Blackwell was appointed by then Michigan Gov. Jennifer Granholm in April 2005 to bring the city out of financial trouble. He promised to work for the cash-strapped city for $1 a year.

Pontiac Emergency Manager Schimmel planning to eliminate health insurance coverage for city retirees

Self-proclaimed “dictator” of Pontiac, EM Lou Schimmel has plans to eliminate health insurance coverage for retired city employees to fill the city’s budget gap:

Schimmel plans to ask the Michigan Department of Treasury within the next month for permission to eliminate health care benefits altogether for the city’s 1,000 or so general employee retirees, most of whom are Medicare-eligible.

The city would also stop providing supplemental Medicare Advantage insurance for general retirees, for which it pays $362 per retiree per month. The emergency manager said he’s planning to provide an opportunity for retirees to continue to purchase their health insurance as a group.

“I would simply love to pay for retiree health care, but — it’s a problem,” Schimmel said. “This will structurally fix the city financially.”

It’s so typical of the rude bedside manner of our state’s EMs that Schimmel would call the health care for retirees “a problem”. It will certainly be a problem for those retirees who have never thought they’d need to plan for health insurance coverage in their retirement. This is a promise made and broken and these people have not had enough advance notice to plan for it.

Former Detroit Public Schools superintendent sues DPS Emergency Manager after being fired

Shortly after PA 436 took effect and gave DPS EM Roy Roberts control over non-academic parts of running the school system, he fired Superintendent John Telford. Telford is now suing Roberts for violating his due process rights and the contracts clause of the Constitution:

The former interim superintendent of Detroit Public Schools is suing Emergency Manager Roy Roberts, the governor and state treasurer in federal court, alleging his termination violates his due process rights and the contracts clause of the U.S. Constitution.

John Telford filed a 19-page complaint Friday in U.S. District Court in Detroit, accusing Roberts, Gov. Rick Snyder and Treasurer Andy Dillon of violating his 14th Amendment right to due process when he was fired March 28, the day the state’s new Public Act 436 took effect.

The new emergency manager law restored Roberts’ full authority over the district, including terminating personnel in positions of academic authority.

A lower court had ruled that under Public Act 72, the state’s prior EM law, Roberts had financial power and Telford — who was appointed by the school board — had academic power.

When Roberts fired Telford, he reappointed Karen Ridgeway, who had been demoted by the board in February after a judge ruled P.A. 72 required the EM to share power with the board.

You can listen to Tony Trupiano’s two-part interview with Telford from last night here:

Pontiac Mayor and City Council get their paychecks back while Flint Emergency Manager Kurtz ends pay for Mayor Dayne Walling and entire City Council

Earlier this month, Pontiac EM Lou Schimmel restored wages to the Mayor and City Council. In Flint, however, Ed Kurtz reversed a decision by former EM Mike Brown and once again took away the paychecks of Mayor Dayne Walling and the Flint City Council:

Flint City Council members and Mayor Dayne Wallling aren’t getting paid – again.

When the state’s new emergency financial manger law took effect March 28, the salaries and benefits of elected officials were automatically eliminated where the state has appointed an emergency manager.

Flint emergency manager Ed Kurtz said he plans to meet with the Flint City Council within the next couple of weeks to talk about giving the council and mayor their pay back.

Flint’s nine-member council and Walling had their pay partially restored December 2011 by former emergency manager Mike Brown after he previously eliminated their pay.

Walling was making $55,080 a year, plus his fringe benefits. Council’s pay was $7,000 per year with no benefits.

Highland Parks Schools Emergency Manager rescinds diplomas for 18 students

In an unprecedented move, Highland Parks EM Donald Weatherspoon rescinded the diplomas of 18 students who were awarded credits for classes they did not pass:

The state-appointed emergency manager for Highland Park’s public schools has revoked diplomas awarded last year to 18 students.

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

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

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

He says he is seeking funding for a plan to allow students who graduated from Muskegon Heights High School as long as six years ago to receive free online learning. Weatherspoon says he believes the students received an inadequate education.

Weatherspoon is also offering free online classes for students who graduated from Muskegon Heights schools in the past six years because of the inferior education they received:

People who graduated from Muskegon Heights High School as many as six years ago would receive free online learning under the emergency manager’s plan to address what he perceives as an inadequate education that was provided to them. {…}

Testing of Muskegon Heights High School students found the vast majority – including 92 percent of ninth-graders – began the school year at least three grades behind in math and reading. That prompted Weatherspoon to explore what can be done for those who have graduated from the district as well as those yet to graduate.

He calls it a “plus six, minus six” approach. That means that people who graduated as many as six years ago or who will graduate as many as six years from now would be entitled to the free educational support. Weatherspoon is trying to find a way to fund the program he said is “still in a concept stage,” and is exploring state job training money.

Weatherspoon said he does not anticipate rescinding diplomas in Muskegon Heights, where he said there is confusion over whether 17 or 21 credits were required to graduate.

It was actually a newsflash to me that the same person is the EM for two school districts.

Well, that’s it for now. Stay tuned. This story is clearly not going away any time soon.