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untanglingwebs
El Supremo
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When Detroit emergency manager Kevyn Orr leaves, state may use new form of control
December 15, 2013 |
By Bill Laitner
Detroit Free Press Staff Writer
Detroit emergency manager Kevyn Orr has said he'll step down in September and is eager 'to return democracy to the citizens of this city.' / Associated Press/Paul Sancya
Hopes are high in Detroit for a return to power of the city’s elected officials.
That’s widely expected to occur in September, when emergency manager Kevyn Orr has said he’ll step down. On the day Judge Steven Rhodes declared the city eligible for bankruptcy, Orr said he was eager “to return democracy to the citizens of this city.”
But judging by what happened in Pontiac, democracy in Detroit could be years or even decades away.
State officials involved with enforcing Michigan’s emergency manager law said they resolved in Pontiac’s case not to make the mistakes of the past, which was lifting state control after the departure of state fiscal overseers in Ecorse, Flint and Hamtramck, only to see all three backslide into deficits.
When Pontiac’s emergency manager left in August, he left behind a rigid form of state control that has no expiration date.
“We’re still in handcuffs here, and we have no idea when it’s going to end,” Pontiac City Council President Lee Jones said recently. State Rep. Tim Greimel, D-Auburn Hills, whose district includes Pontiac, said he sees no end in sight for “a massive overreach” of power by Gov. Rick Snyder in Pontiac.
Their main beef is that, despite the departure of the emergency manager, the town’s elected officials are still virtually powerless. They must answer to two arms of state power: a Transition Advisory Board that meets monthly and a full-time city administrator, a state-created position to serve as overseer in place of the emergency manager.
Pontiac’s city administrator has “virtually all of the duties and powers of the emergency manager,” Greimel complained in a Sept. 10 letter to Snyder. He and other critics predict a similar fate for Detroit and the other communities being ruled by emergency managers — Allen Park, Hamtramck, Flint and Benton Harbor — as well those where emergency managers are considered imminent: Lincoln Park, Highland Park and Royal Oak Township.
Pontiac and communities like it need administrative guidance left in place after their emergency managers depart, Michigan Treasury Department spokesman Terry Stanton said.
“It’s too early to say that Pontiac is the template for future situations” including Detroit, Stanton said. But the spokesman for Detroit’s emergency manager said it was inevitable that Detroit, too, would have years of state-orchestrated oversight.
“It’s very likely that some type of advisory board will be put in place,” said Bill Nowling, spokesman for Orr.
“Whether that means there will also be an administrator in Detroit remains to be seen. Kevyn (Orr) points back to the situation that was put in place in New York City, which had (state) oversight there for 33 years” after the city emerged from receivership in 1975, Nowling said.
“We’re looking at different models of what will be left in place in Detroit. But safe to say, there will be some form of ongoing oversight once the emergency manager is gone. Our creditors are going to demand it,” Nowling said.
Detroit mayor-elect Mike Duggan routinely declines to comment on Orr and the state’s oversight, Duggan spokesman John Roach said. But because Duggan’s financial acumen is well known in Lansing, Duggan is hopeful that little or no state control will remain after Orr leaves, Roach said.
Some Democratic legislators accuse Snyder of violating Michigan’s law on emergency managers in Pontiac. But Snyder spokeswoman Sara Wurfel cited the emergency manager law, Public Act 436, as allowing for the creation of any new position by an emergency manager.
“The governor’s goal and intent is absolutely to return full control to elected officials as quickly and efficiently as possible, but also while ensuring the long-term financial success of the city of Pontiac,” Wurfel said.
The state’s new form of control in Pontiac was dictated Aug. 19, the last day in power of Pontiac’s emergency manager Louis Schimmel, who created the position of city administrator and decreed the person holding the job could veto virtually any decision by the mayor and city council. Hetapped the city’s economic development director — Joseph Sobota — to fill the position.
Sobota, who’s paid $120,000 a year from city coffers, was an acting city manager and treasurer of Algonac. He has been an adviser to Pontiac’s emergency manager since 2011. Without Sobota, Pontiac would soon backslide, Schimmel said last week.
“I’ve seen that happen in too many cities, and the state shares my determination that this doesn’t continue to occur,” he said.
After Schimmel swept up a fiscal mess as receiver for Ecorse in the late 1980s, and after he left Hamtramck in 2006 as its emergency financial manager, both cities slid back into deficit spending, corrupt management and cronyism, Schimmel said. Both required new emergency managers.
Pontiac’s mayor-elect Deidre Waterman, who takes office Jan. 1, said she is “still trying to work out a working relationship with the management terms” of having state control of City Hall.
Waterman acknowledged that “there are unavoidable strictures on us.” Those limitations include a budget set for the next two years, and a rule that the mayor and city council get no discretionary spending “until we have a budget surplus of 15% of the $30-million revenue budget — I just had that confirmed on Dec. 13 by meeting with the city administrator,” she said.
At a recent council, elected officials and residents derided the absent administrator, calling him mini-manager and junior manager. The council took several ceremonial votes.
“We were supposed to get our freedom back,” Pontiac City Councilwoman Mary Pietila said after the meeting.
“Joe Sobota said he’d run the city like a city manager, but a city manager takes orders from the city council and that’s not happening here.” |
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Sun Dec 15, 2013 7:37 am |
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untanglingwebs
El Supremo
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Some Democratic legislators accuse Snyder of violating Michigan’s law on emergency managers in Pontiac. But Snyder spokeswoman Sara Wurfel cited the emergency manager law, Public Act 436, as allowing for the creation of any new position by an emergency manager.
“The governor’s goal and intent is absolutely to return full control to elected officials as quickly and efficiently as possible, but also while ensuring the long-term financial success of the city of Pontiac,” Wurfel said.
The state’s new form of control in Pontiac was dictated Aug. 19, the last day in power of Pontiac’s emergency manager Louis Schimmel, who created the position of city administrator and decreed the person holding the job could veto virtually any decision by the mayor and city council. Hetapped the city’s economic development director — Joseph Sobota — to fill the position. |
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Sun Dec 15, 2013 11:14 am |
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untanglingwebs
El Supremo
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Pontiac's no longer under an emergency manager but leaders want the last word
10:36 PM, August 26, 2013
By Bill Laitner
Detroit Free Press Staff Writer
Gov. Rick Snyder praised Pontiac’s outgoing emergency manager Louis Schimmel last week for balancing the budget of the long-troubled city while dramatically improving police-response times and other city services.
But members of the Pontiac City Council met Monday night to castigate Schimmel for wholesale changes he made in the city and, in particular, to label as illegal the strict operating rules he left behind in his “final order.”
Members voted 7-0 to declare that a different kind of emergencyexists in the city, one that threatens democracy, because of Schimmel’s final order, a 13-page document that lists numerous rules under which city officials must operate.
Schimmel could not be reached Monday night but in interviews last week he said issuing a final order is a standard way for outgoing emergency managers to prevent their changes from being undone.
The rulesinclude a limit of two minutes on how long visitors can speak at City Council meetings, and three minutes for how long council members can speak in their closing comments to end meetings.
“We want people to be able to speak (for) five minutes. And we always had as much time as we wanted” for closing comments of the council, City Councilwoman MaryPietila said. In those order and numerous others, Schimmel went “way above and beyond” the financial matters that he was supposed to oversee, she said.
A key concern of council members is that Schimmel’s order created the new position of city administrator and listed broad powers for the new job in the final order, Councilman Kermit Williams said after the meeting.
Schimmel’s final order begins by saying its rules are “binding on the local elected and appointed officials and employees” of the city, according to Michigan’s law that empowers Schimmel and other emergency managers of insolvent local governments — the controversial Public Act 436.
One resident who spoke at Monday’s council meeting said she would lead a picket line this morning to block Schimmel’s new city administrator, Joseph Sobota, from entering Pontiac City Hall, Williams said.
Others in the audience chimed in to say they’d join the human blockade, but Williams said it was unclear whether they were serious.
“I guess we’ll find out” this morning, he said. The resolution approved Monday will be sent to Lansing lawmakers later this week, Williams said, although such a resolution seems unlikely to have legal force against Schimmel’s Lansing-backed order.
As the city’s state-appointed financial manager for nearly three years, following a succession of two previous managers appointed by former Gov. Jennifer Granholm, Schimmel is credited with turning Pontiac’s finances around, leaving the city with a far leaner government whose budgets are balanced for the next two fiscal years, according to a news release last week from Snyder’s office. |
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Sun Dec 15, 2013 11:22 am |
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untanglingwebs
El Supremo
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| It appears we need to watch out for the final order when Earley leaves. |
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Sun Dec 15, 2013 11:24 am |
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untanglingwebs
El Supremo
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Editorial: Counseling city council, scrutinizing form of government important steps in transition out of Flint's emergency management
MLive/Flint Journal opinion By MLive/Flint Journal opinion
on December 15, 2013 at 9:00 AM, updated December 15, 2013 at 9:15 AM
The following is written by The Flint Journal Editorial Board.
Sometime in 2014, control of Flint government is expected to transition from a state-appointed emergency manager back into the hands of our locally elected leaders. Gov. Rick Snyder has said it and Flint emergency manager Darnell Earley has said it.
Before the transition starts, though, the Flint community needs to be reassured that its local leaders and its system of governance are in the best possible position to continue stabilizing the city’s newfound, but still rickety fiscal foundation. We don’t want a three-peat of financial emergencies – two in a decade are enough.
We support the plans that Earley has laid out to ensure that the government in place during and after the transition is well-informed. As he said during a recent meeting with the Editorial Board, he’s trying to bring a “new normal” to Flint City Hall.
Earley plans to form a 21-member “blue-ribbon” commission to study the possibility of restructuring Flint’s government. The report from that commission, members of which are being appointed by Earley with input from Mayor Dayne Walling, will be passed along to the official Transition Advisory Board – a mostly state-appointed board that oversees the transition.
Earley has made it no secret that he’s a fan of a city manager form of government (rather than the strong mayor form of government Flint has now), which puts day-to-day operation of the city in the hands of a city manager hired by the city council.
We agree that it’s a long-standing local political question deserving of more research and a thorough vetting by the community. Flint residents deserve to be able to say the city exited the emergency in better form than when it began – whatever that form may be.
In addition to the “blue ribbon” panel, Earley also plans a series of educational sessions on good governance, which are expected to include the Michigan Municipal League, are scheduled to take place to re-engage elected officials. This is another good first step.
We hope the mayor and Flint City Council will attend the upcoming sessions with an eye toward cooperation. The process will separate the true leaders from the officials – and will prove who is willing to do the necessary work and who truly has a desire to be a part of Flint’s financial recovery.
These steps are important because we want this time to be different. Advising the city council and scrutinizing our form of government are necessary steps to ensure that, this time, Flint leaves the emergency behind us for good. |
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Sun Dec 15, 2013 1:16 pm |
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untanglingwebs
El Supremo
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From Facebook:
John Streby The voters of Flint, faced with a poor choice between Floyd Clack and Don Williamson, opted for the ex-con rich man, and he proceeded to cost the city millions of dollars with his ego and bad judgment. His reverse-discrimination actions in the police department led to numerous lawsuits. He refused to settle the sewer backup cases for modest amounts, demanding instead that the cases proceed to trial, whereupon the city got hit with 8-figure liability. The huge arbitration award on the Genesee Towers condemnation also took place under his watch, and there is good reason to question his impulsive choice of arbitrator on that. Williamson's blunders show the folly of allowing even millionaire mayors to escape any financial consequences of their actions, and given that politicians are, by definition, spending other peoples' money, that creates a moral hazard that encourages them to act recklessly in ways they wouldn't if their own money were at stake. I'm not saying that Clack would have been any better, because (in my opinion), his political career was not particularly distinguished, and he failed to articulate any vision for the city or reason to vote for him. As Flint has struggled, the pool of qualified people willing to run for office has dwindled, and into that void, we've gotten the likes of Williamson and now, Eric Mays on the city counsel (he isn't the only felon just elected, but he concerns me far more than Wantwaz Davis, who paid his debt to society and appears to now be a solid citizen). So, I have to question: Is Flint capable of effective self-government? Or does Flint government need the sort of adult supervision that only the state can provide? I am sorry to say this, but I am not optimistic. Detroit's voters decisively rejected Benny Napoleon, notorious for blaming others for his shortcomings, which is cause for hope for that city. Does Flint have to be dragged through the humiliation of bankruptcy for its voters to wake up and quit electing people like Eric Mays to office? We'll see. |
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Sun Dec 15, 2013 1:30 pm |
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untanglingwebs
El Supremo
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Flint will get appraisal for Hurley Medical Center, water and sewer system
Dominic Adams | dadams5@mlive.com By Dominic Adams | dadams5@mlive.com
Follow on Twitter
on December 16, 2013 at 1:30 PM, updated December 16, 2013 at 1:40 PM
FLINT, MI – A consultant will determine the value of city-owned Hurley Medical Center and the water and sewer system.
Flint Emergency Manager Darnell Earley ordered the study, which will be completed by Ernst & Young.
“The purpose of this asset valuation is to give us a data-driven model of the value of those two assets should the issue come up regarding whether or not the city should continue the ownership in those two areas,” Earley said last week.
The work will cost $265,000, but will be reimbursed by the state and is a part of the an update to the city’s five-year financial projection. The resolution was signed by Earley on Nov.25 and posted to the city’s website on Saturday, Dec. 14.
Related: Read the resolution here
“This does not automatically signal anything more than we want to know the value of those assets,” Earley said. “It’s a responsible step to make a data-driven assessment of those two large assets in the event that there is some discussion further about the city’s overall financial health.”
Earley said he didn’t think a similar study has been completed before.
With a deficit of $19.1 million, Flint ended the 2013 fiscal year with a $4.2 million surplus. The surplus reduced the deficit to $14.9.
Another $1 million would be set aside from the general fund in 2014 and would put the deficit at $13.9 million.
The city would borrow $10.8 million from the water and sewer funds in 2015, according to its deficit elimination plan. The debt service would be paid from the capital improvement fund.
Another $1 million would be set aside from the general fund in 2015, there would be $1.5 million set aside in 2016 and $550,000 in 2017 to clear the deficit.
Officials in Lansing have yet to approve the use of water and sewer funds to eliminate Flint’s deficit.
Dominic Adams is a reporter for The Flint Journal. Contact him at dadams5@mlive.com or 810-241-8803. Follow him on Twitter, Facebook or Google+. |
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Mon Dec 16, 2013 7:50 pm |
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untanglingwebs
El Supremo
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Since the city's fiscal year runs from July 1st to June 30th, they must be talking about the 2012-13 fiscal year as the 2013-2014 is not over yet.
Most comments will be about the loan from the water and sewer funds. That money must be repaid with interest. In the meantime, will there be enough money for infrastructure improvements? What happened to the deficit in the sewer fund that Mike Brown said was there? |
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Mon Dec 16, 2013 7:54 pm |
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