Gov. Snyder likely to appoint Emergency Manager to Detroit

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**djones520**

http://www.foxnews.com/politics/2013/03/01/gov-snyder-to-make-emergency-manager-call-friday/?test=latestnews

Gov. Rick Snyder plans to announce Friday whether he will appoint an emergency manager for Detroit but likely won't immediately name the person if he does, Mayor Dave Bing said.

Bing, who spoke with Snyder by phone earlier in the day, signaled the Republican governor had decided to take the extraordinary step of choosing an independent overseer to confront the city's $327 million budget deficit and $14 billion in long-term debt.

He stopped short of confirming the decision, saying the announcement was Snyder's to make.

"Everybody's got a pretty good idea of what the announcement will be," Bing said.

Speaking briefly to reporters Thursday afternoon from Lansing, Snyder only said that no specific individual would be announced during a forum he scheduled for mid-day Friday to discuss the city's financial situation. If he agrees that a financial emergency exists, which he is expected to do, there would be an appeals process, he said.

This has been a HUGE topic for us Michiganders. Southerners (Michigan southerners) are pretty pissed about it, while Northerners are generally acceptant of it. We're (northerners) pretty pissed about Detroit continually dragging the state down and we feel it's beyond time extraordinary measures be taken over the issue.

I'm not aware of anything like this ever really being used before. Does anyone else know if it has, and has it been succesful?

**KalashnikovMarine**

What's the deal on this? and what's the division line between Michigan south and Michigan north on the issue?

Does any one actually like having a hell hole in their state?

**Dreadclaw69**

Isn't this similar to what is happening with Benton Harbor in the south of Michigan, near the State line with Indiana?

**Dreadclaw69**

Now that I'm out of the shower ( I caught this thread as I was signing into last.fm) here's a link for the work blocked,

http://www.michiganradio.org/post/7-things-know-about-michigans-emergency-manager-law

When a city or a school district in Michigan runs out of money, the state can appoint an emergency manager to take over the responsibilities of locally elected officials. An emergency manger’s powers are broad—made even more so this year – and are designed to help EMs balance the books and return governance to locally elected officials as quickly as possible.

Today, there are four cities and one school district under the control of an emergency manager:
Benton Harbor
Ecorse
Flint
Pontiac
Detroit Public Schools
This is the second time around for Flint, which had an “emergency financial manager” from 2002-2006. The cities of Detroit and Inkster and Benton Harbor Public Schools could soon be added to this list.

1. What can an emergency manager do?
An emergency manager can:
Hire/fire local government employees
Renegotiate, terminate, modify labor contracts with state treasury approval
Sell, lease, or privatize local assets with state treasury approval
Revise contract obligations
Change local budgets without local legislative approval
Initiate municipal bankruptcy proceedings
Hire support staff
An emergency manager cannot raise taxes.

2. Then and now: Emergency financial managers vs. emergency managers
Michigan’s emergency management system has been in place since 1988, when Public Act 101 allowed an emergency financial manager to assess and manage the finances of Hamtramck.
PA 101 was strengthened in 1990, when Public Act 72 gave state government the power to appoint “emergency financial managers” to local government units—such as towns, school districts, or counties—nearing bankruptcy.
Emergency financial managers became “emergency managers” when their powers were strengthened by Public Act 4 in 2011.
The more powerful emergency managers (EMs) can now strip locally elected officials of their power and they can renegotiate, alter, or void union contracts before they expire.
According to Joe Harris, Benton Harbor’s emergency manager, Public Act 4 effectively removes power from local, elected officials once an EM is appointed.
Harris told Michigan Radio in May that, “the only authority that they can have is the authority that's provided to them, or is given to them by the emergency manager.”
Under Public Act 4, past emergency managers have removed the legislative powers of elected officials, suspended their pay, fired city officials, and imposed pay cuts that violate union contracts.
Public Act 4 overrides Public Acts 101 and 72, which are no longer in effect.
Emergency manager decisions are approved by the State Treasurer—the same office that appoints EMs.

3. Emergency management as an alternative to bankruptcy
The emergency management system in Michigan is a bankruptcy workaround.
Municipalities have been able to file for bankruptcy since 1937, a last ditch option for towns that can’t raise taxes to pay off their debt.
Declaring bankruptcy allows local government units to void contracts, restructure debt, and adjust payroll obligations, such as pensions.
Michigan, like most states, requires state approval for a municipality to declare bankruptcy.
When a person defaults on their loans, it destroys their credit rating. The same is true of cities.
By appointing an emergency manager, the state essentially puts a “financially distressed” city or school district into state receivership. It gives state officials many of the special powers granted during bankruptcy proceedings without ruining a district’s credit rating.
An emergency manager can make drastic changes to contracts seen as unsustainable - costs such as union contracts, pensions, and other existing contractual obligations.
These options, powers given to EMs by Public Act 4, are unavailable to local officials.

4. How is an emergency manager appointed?
Towns deemed to be in financial distress go through a review process before they are put under emergency management.
The initial review can be triggered by a failure to pay debts or employee salaries, It can be requested by residents or local officials. And the State Senate, the State House of Representatives, and State Treasurer may also initiate a review.
If any problems are found, the Governor can request a second review before deciding to appoint an emergency manager.
The Local Emergency Financial Assistance Loan Board, which includes the State Treasurer, makes the appointment.
It was announced on Friday that Detroit will undergo a preliminary financial review.
Detroit Mayor Dave Bing and the Detroit City Council say the city doesn’t need state intervention, and some analysts have suggested that bankruptcy is Detroit’s best option.

5. How long does an EM serve for?
EM’s serve without term limits and appointments are controlled by the Loan Board. The exception is school districts, where emergency managers serve 1 year terms and may be reappointed.

6. Major legal challenges to Michigan’s EM law
Michigan Forward is currently circulating a ballot initiative petition to repeal Public Act 4. They have collected 157,000 of the 162,000 signatures required by March 2012 to get the question on the November 2012 ballot.
If the petition is approved, PA 4 will be suspended until the November 2012 vote.
The Sugar Law Center for Economic and Social Justice has filed a lawsuit on behalf of voters saying the emergency manager law violates separation of powers and their right to self-government. Governor Snyder took an unusual step and asked the Michigan Supreme Court to issue an expedited ruling on the case. These cases normally work their way through lower courts before reaching the State Supreme Court. Snyder said the severe financial difficulties facing local governments and school districts require that the questions of constitutionality be resolved quickly. The State Supreme Court has asked for more information from those involved before deciding whether or not to hear the case.
U.S. Congressman John Conyers sent a letter last week to Attorney General Eric Holder, requesting a review of Michigan’s EM law with respect to the 1965 Voting Rights Act, which protects minorities from discriminatory voting and representation practices. “In this case, while the law itself may be facially neutral, it would seem that it is being applied in a discriminatory fashion, as the impacted jurisdictions have very high proportions of African Americans and other minorities,” writes Conyers.
If Detroit is appointed an emergency manager, 49% of African Americans in Michigan will be living in cities run by EMs.
The letter also invokes Article 4, Section 4 of the U.S. Constitution, which guarantees democratically elected representatives.

7. Beyond Michigan
So far, Michigan has been setting its own precedent for emergency management.
The state’s emergency manager process looks a lot like New York City’s Municipal Assistance Corporation, established in 1975 to manage the city’s debt crisis.
One of the earliest state-appointed financial management groups, the MAC functioned as emergency managers do now; overseeing the budget, managing loan procedures, and restructuring personnel to reduce payroll spending.
In Michigan, however, it’s not an oversight board, it’s one person.
While many states now have provisions on the books for the emergency management of local finances, few explicitly grant those powers to individual EMs in the same way PA 4 (2011) does.
The argument for having one manager is expediency and concentrated accountability—that a financial crisis demands flexible and responsive leadership.
The largest district taken over by the state was Flint in 2002 (the city’s population is now lower).
With seven times as many people, Detroit, now under a preliminary financial review, presents an entirely different challenge.

**R3con**

djones520 wrote:
http://www.foxnews.com/politics/2013/03/01/gov-snyder-to-make-emergency-manager-call-friday/?test=latestnews

Gov. Rick Snyder plans to announce Friday whether he will appoint an emergency manager for Detroit but likely won't immediately name the person if he does, Mayor Dave Bing said.

Bing, who spoke with Snyder by phone earlier in the day, signaled the Republican governor had decided to take the extraordinary step of choosing an independent overseer to confront the city's $327 million budget deficit and $14 billion in long-term debt.

He stopped short of confirming the decision, saying the announcement was Snyder's to make.

"Everybody's got a pretty good idea of what the announcement will be," Bing said.

Speaking briefly to reporters Thursday afternoon from Lansing, Snyder only said that no specific individual would be announced during a forum he scheduled for mid-day Friday to discuss the city's financial situation. If he agrees that a financial emergency exists, which he is expected to do, there would be an appeals process, he said.

This has been a HUGE topic for us Michiganders. Southerners (Michigan southerners) are pretty pissed about it, while Northerners are generally acceptant of it. We're (northerners) pretty pissed about Detroit continually dragging the state down and we feel it's beyond time extraordinary measures be taken over the issue.

I'm not aware of anything like this ever really being used before. Does anyone else know if it has, and has it been succesful?

Um everyone I know in SE Michigan thinks this is LONG overdue there is a reason we refer to the Detroit City Council as the CLOWNcil. Seriously you cant think Detroit's current path is sustainable.
http://www.detroitnews.com/article/20130301/OPINION03/303010339/Business-leaders-ready-embrace-gov-s-likely-announcement-Detroit-emergency-manager?odyssey=mod|newswell|text|FRONTPAGE|p

**Gentleman_Jellyfish**

Interesting. What prevents a city/school from returning to it's pre-manager state after the works are done?

I equate it to the show "Kitchen Nightmares" where chef Ramsey comes in to a dying restaurant and revitalizes the place and starts bringing in business again, but the funny thing about that show is that a majority of the businesses he helps still go out of business.

**Manchu**

Apparently, Detroit can no longer afford democracy.

**Easy E**

Why does this make me thinkof a Muse song?

**Manchu**

More like this song:

**Rented Tritium**

I'm really uncomfortable with the idea of the state appointing a dictator for a city and dissolving a legally elected government.

Detroit really sucks, though.

**Manchu**

To put a finer point on it, can you think of a dictator that could fix what sucks about Detroit?

**Frazzled**

Manchu wrote:
To put a finer point on it, can you think of a dictator that could fix what sucks about Detroit?

Sure you can. Where there's a will there's a way.
10,000 troops driving everyone from the city followed by a second wave burning everything to the ground + 1,000,000 tree seeds = PROFIT.
Return Detroit to nature. Problem, solution.

**Manchu**

You say some really gakky things sometimes.

**SilverMK2**

Manchu wrote:
You say some really gakky things sometimes.

They need to get the fertiliser for the trees from somewhere...

**Easy E**

Rented Tritium wrote:
I'm really uncomfortable with the idea of the state appointing a dictator for a city and dissolving a legally elected government.

Detroit really sucks, though.

Yeah, it seems a bit... unamerican.

**Frazzled**

Manchu wrote:
You say some really gakky things sometimes.

What? Everything is possible with the proper will. And you did ask what a dictator could do. Frankly thats just making the inevitable happy more quickly and humanely. Detroit is dying like ten thousand other ghost towns in the US. As time changes people move. Detroit is no different.

Or just dissolve the government and do nothing. People will leave for new productive areas (the burbs or other cities) as they are doing now. Frankly a big gigantic road trip to the auto plants in Tennessee is just the ticket.

**Rented Tritium**

I think there's some truth to it. They need to encourage people to leave. Scatter the residents of detroit across the other cities in the region and de-city the place. Once it shrinks enough, it can become a regular old small town and maybe grow back up naturally with new industries.

It's got a sweet location after all.

**SilverMK2**

Easy E wrote:
Rented Tritium wrote:
I'm really uncomfortable with the idea of the state appointing a dictator for a city and dissolving a legally elected government.

Detroit really sucks, though.

Yeah, it seems a bit... unamerican.

Hey, you guys decided to dissolve your legally appointed government when you switched your jackets to blue instead of red... there is nothing more American than stabbing your rulers in the back

**Frazzled**

Easy E wrote:
Rented Tritium wrote:
I'm really uncomfortable with the idea of the state appointing a dictator for a city and dissolving a legally elected government.

Detroit really sucks, though.

Yeah, it seems a bit... unamerican.

Well except for the native Americans...

As I noted, alternatively just shut it down and let it die. Towns die all the time. New ones are born and grow. We who grew up in the West know about this. LA, Houston, Dallas, were tiny in 1920. Then they boomed. Eventually they will bust. It is the way of things. There are plenty of dead towns all across the west. Former gold rush or oil rush towns that have dried up or nearly so. Drive I59 or Route 66.

Diboll, Texas on the other hand, thats eternal.
"I lost my eyeball in Diboll" -Frazzled driving ditty.

**Rented Tritium**

Even before this, the detroit strategy was to shrink to reduce costs. Bring the city limits in and demolish as much crappy city as possible.

**Manchu**

Frazzled wrote:
As time changes people move. Detroit is no different.

Seriously, you really can't see what's wrong with you treating the actual people that live in Detroit like they don't exist?

**Frazzled**

Manchu wrote:
Frazzled wrote:
As time changes people move. Detroit is no different.
Seriously, you really can't see what's wrong with you treating the actual people that live in Detroit like they don't exist?

OK.
1. You asked what a dictator could do. Don't jump on my back when you asked the question. A real dictator would wall it up and move on. I'm being benevolent.
2. Going the alternate benign neglect strategy whats the problem? Its going to fail no matter what. Treat it like a rural county with rural services demunicipalize (hah new word!) it. I mean come are you going to prop up every town in America? I know about 50 boom towns in Texas we'd have to go back and give billions to.

**Rented Tritium**

It's easy to destroy detroit and still treat them like people.

Just give anyone who moves out of detroit, but stays in michigan some kind of stipend for X years or a huge tax credit or priority enrollment for their kids in better schools or something.

Basically buy out as many as you can, the rest can live in the smaller and less crappy detroit.

**Manchu**

Frazzled wrote:
1. You asked what a dictator could do. Don't jump on my back when you asked the question. A real dictator would wall it up and move on. I'm being benevolent.

Actually, I asked if you could think of a dictator who could actually rehabilitate Detroit. You know, is there actually a person who could do it. Your response was the only solution to Detroit is to destroy it. So you didn't answer or even attempt to answer my question. And there's nothing at all benevolent about your comment.

Frazzled wrote:
2. Going the alternate benign neglect strategy whats the problem? Its going to fail no matter what. Treat it like a rural county with rural services demunicipalize (hah new word!) it.

And what are you going to do with the 700,000 people who live there?

**Frazzled**

Rented Tritium wrote:
It's easy to destroy detroit and still treat them like people.

Just give anyone who moves out of detroit, but stays in michigan some kind of stipend for X years or a huge tax credit or priority enrollment for their kids in better schools or something.

Basically buy out as many as you can, the rest can live in the smaller and less crappy detroit.

See there you go. Judging from the unemployment just offer them a stable job. Thats why we always had to move and I'm not working in one city with my family in another because I like to live in hurricane zones.

**Manchu**

Rented Tritium wrote:
Just give anyone who moves out of detroit, but stays in michigan some kind of stipend for X years or a huge tax credit or priority enrollment for their kids in better schools or something.

First, The reason for suspending democracy in the first place is because Detroit is supposedly a drain on the rest of Michigan's economy. Subsidizing mass immigration is not a solution. Second, you seem to be pretending that nothing at all is going on in the city. There are jobs there. There is industry. There is are people who have livelihoods.

Funny enough, Frazzled himself already posted the most fitting analogy to this attitude -- the US government's treatment of Native Americans.

Automatically Appended Next Post:

Frazzled wrote:
Judging from the unemployment just offer them a stable job.

Who are you suggesting offer them these jobs?

**Frazzled**

Who are you suggesting offer them these jobs?

California. They can work on the rail to nowhere.

EDIT: then what would you counsel Manchu? If the city is dying you don't want bonuses for people to leave so it can become manageable. What would you do governor Manchu?

**Rented Tritium**

If detroit is so much of a drain that we're even TALKING about suspending democracy, then paying off the residents to leave might actually be a net positive.

**Manchu**

That's a point of debate. Not everyone actually agrees that democracy must be suspended in Detroit. The anti-labor, white Republican governor of Michigan represents the people who do -- and that's not everyone.

**Frazzled**

Manchu wrote:
That's a point of debate. Not everyone actually agrees that democracy must be suspended in Detroit. The anti-labor, white Republican governor of Michigan represents the people who do -- and that's not everyone.

Cool. Leave it alone then. Being as none of us are from Detroit, lets all watch this live action TV episode of watching a city die. Doesn't bug me one way or another.