Emergency Managers — January 22, 2015 at 7:01 am

UDPATED: New Jersey Gov. Chris Christie to appoint Emergency Manager for Atlantic City, Kevyn Orr to be a consultant


See update below.

Back in November, I wrote about New Jersey Gov. Chris Christie considering the possibility of appointing an Emergency Manager for Atlantic City which has faced a critical financial emergency due to the near collapse of its gaming industry. This morning it is being widely reported that Gov. Christie will appoint an Emergency Manager. Kevyn Orr is said to have been consulting with with Gov. Christie’s administration but rumors that he will be the Atlantic City Emergency Manager appear to be inaccurate. Instead, it is believed Christie will appoint New York lawyer Kevin Lavin:

Christie is expected to name Kevin Lavin, a lawyer who worked for FTI Consulting Inc. in New York, a source told The Wall Street Journal. Another man, former Detroit emergency manager Kevyn Orr, will be brought on as a consultant to work with Lavin, the paper also reported. Orr controlled Detroit’s finances beginning in March 2013.

The two will begin immediately and will assume the powers now held by the mayor and council. They will also be free to consider a range of solutions — including renegotiating public-employee contracts, The Journal reported.

Philly.com has more reporting, describing the new position as “a Detroit-style emergency manager”:

On the eve of Gov. Christie’s third Atlantic City summit, City Council President Frank M. Gilliam Jr. said Wednesday night that the state was poised to bring in a powerful emergency manager to oversee city government.

“They’re moving forward with an emergency manager,” Gilliam said before the Council meeting. “It’s very upsetting.” […]

Among proposals to help Atlantic City recover from the closure of four casinos in recent months is a Detroit-style emergency manager with extraordinary powers over city government and finances – an idea opposed by Mayor Don Guardian.

Talk of an emergency manager permeated City Hall on Wednesday. Councilman Moise Delgado posted on his Facebook page: “There will be a New Czar in town soon.”

Gilliam said he was distressed that the governor was resorting to a quasi-takeover when he and the Guardian administration had been working proactively to cut the budget and address the city’s cash crunch.

“I don’t understand why,” Gilliam said. “We’ve done everything we possibly can do from a municipality’s standpoint.”

Guardian’s chief of staff, Chris Filiciello, would say only that “we are waiting to hear what the governor proposes tomorrow.” Guardian had said he was “100 percent” opposed to a manager.

Kevyn Orr’s name is mentioned in several articles as Christie’s choice for the new Emergency Manager for Atlantic City. However, he is denying that he’s taking the position.

I’ve been describing Michigan as the testing ground for this new, anti-democratic way of “solving” the financial emergencies that face some municipalities and it’s now clear that the experiment is being seen by Republican governors as a resounding success. With the reelection of Gov. Snyder, despite his having gone against the will of the voters with regard to Emergency Managers, we can expect to see more Republican governors using Emergency Management in the future.

UPDATE: It is now official:

Gov. Chris Christie today announced that he’s signed an executive order for a state takeover of financially strapped Atlantic City, installing an emergency management team to help dig the gambling resort out of “an enormous hole.”

Christie tapped Kevin Lavin, a corporate attorney who most recently worked for New York firm FTI Consulting, to oversee the daily operations and finances of the 40,000-resident city, which has lost four casinos and thousands of jobs over the last year.

The Republican governor also named Kevyn Orr, who last year served as emergency manager of the similarly struggling Detroit, as a part-time counsel in the city.

“I can’t wait any longer,” Christie said while making the announcement at the third summit he has convened with casino executives, business leaders, union leaders, and state and local officials to search for ways to revitalize the city. “We need more aggressive action, and that’s the action I’m taking today.”

The move also comes as Christie considers whether to launch a campaign for the 2016 Republican nomination for president.

[CC image credit: Peter Stevens | Flickr]