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  1. #1
    Senior Member JohnDoe2's Avatar
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    A dozen Michigan cities and school districts under state-imposed oversight

    Pontiac’s Rough Road to Recovery Could Foreshadow Detroit’s Path

    By STEVEN YACCINO
    Published: September 15, 2013

    PONTIAC, Mich. — When Gov. Rick Snyder declared this city’s financial crisis resolved last month, officially ending the tenure of the state-appointed emergency managers who have controlled it for four years, the elected municipal leaders thought they were getting their jobs back. But they may not be in charge anytime soon.


    Sean Proctor for The New York Times

    “They have no idea how to run this city,” said Louis H. Schimmel, the most recent emergency manger in Pontiac, about the City Council.

    The mayor has been demoted, reporting to a city administrator who is now calling the shots. The part-time City Council has the authority to do little more than approve the minutes from its weekly meetings. Public employees, totaling several hundred not long ago, are almost extinct, overtaken in City Hall by private contractors who deliver nearly all of Pontiac’s public services.

    As speculation grows about what Detroit will look like when it is expected to emerge from bankruptcy proceedings and state control a year from now, Pontiac’s experience offers a glimpse at the myriad complications that accompany a transition back to elected leadership after an emergency manager departs.

    “I think we all knew we were going to have some kind of training wheel when the state decided this emergency was over,” said Kermit Williams, a member of Pontiac’s City Council, which has battled the state’s intervention from the beginning. “What we didn’t know was that emergency management would still exist under another name.”

    There are a dozen Michigan cities and school districts under some form of state-imposed oversight — with more under review — authorized by a law that gives emergency managers broad authority to set budgets, sell city assets and alter union contracts.

    Few have showcased that power more than those in Pontiac. Police and fire departments were merged with those of municipalities nearby. Private companies now handle duties like trash pickup, ambulance services and street maintenance.

    The city payroll now consists of 20 people.

    Selling assets and outsourcing public services, though upsetting to many here, have reduced Pontiac’s $87 million debt and eliminated a $9.2 million structural deficit, leading Mr. Snyder, a Republican, to declare an end to the financial emergency on Aug. 19. But an effort to protect those changes has raised questions about the best exit strategy for emergency managers and whether a lasting grip on local government is justifiable when the elected leaders fervently opposed the state’s plan from the start.

    “They didn’t work with me or have anything to do with me for two years,” Louis H. Schimmel, the most recent emergency manger in Pontiac, said about the City Council. “They have no idea how to run this city.”

    Mr. Schimmel, whose budget will be locked in for two years after his departure, is one of four members of a state advisory board that will monitor financial decisions made in Pontiac until the transition is complete.

    “I just want to make sure my policies don’t go down the drain,” he said, adding that the handoff would take at least a couple of years. State officials will determine when the transition is over.

    Though far smaller than Detroit, just 20 miles to the southeast, Pontiac followed a similar descent into fiscal disarray. Home of General Motors’ namesake brand, the city and its treasury were crippled by the downturn of the auto industry. It has lost more than one-quarter of its taxpayers over the past four decades; its population today is roughly 60,000.

    Residents have mixed reactions to the managers. Some deride an early decision to sell the Silverdome football stadium, where the Detroit Lions used to play, for about $20 million less than what it had once been valued. But many say the police force, now run by the Oakland County Sheriff’s Department, has improved drastically under the new leadership. Signs of new business investments downtown are attributed to renewed confidence in the city’s fiscal health.

    Most of the privatization deals in Pontiac were brokered by Mr. Schimmel, 76, who was appointed in September 2011 to be the city’s third and final emergency manager. Years earlier, he had balanced the books in two other Michigan cities — Ecorse in 1986 and Hamtramck in 2000 — but both places were eventually placed back under state control after financial problems resurfaced. Ecorse started its most recent transition to local control in April.

    “Nobody was thinking about after,” Mr. Schimmel said, blaming elected leaders in those cities for going “back to their old ways” of spending when he left. Now, with lawsuits pending against some of his decisions in Pontiac, Mr. Schimmel said he was determined to ensure that did not happen again.

    Last month, Mr. Schimmel issued a final order giving a city administrator — Joseph M. Sobota, an aide to Mr. Schimmel while he was emergency manager — the power to make fiscal decisions for Pontiac during the transition. The new position comes with a $120,000 salary and authority over all contracts, hiring and spending, with the advisory board’s approval.

    Mayor Leon B. Jukowski, a Democrat who has been criticized by the Council for working closely with Mr. Schimmel, will make $100,000 a year and assist Mr. Sobota as a liaison to business leaders and the public.

    City Council members, whose predecessors used to earn $15,000 a year, will be paid $100 per weekly meeting they attend, plus up to $100 a month for committees. The body will be consulted on issues but can be overruled by Mr. Sobota or the advisory board. The council members are not allowed in City Hall after hours.

    “The order suggests that local democracy is indefinitely suspended without any time limit or timeline for its restoration,” said Tim Greimel, who represents Pontiac and is the Democratic minority leader in the State House. Calling Mr. Schimmel’s final move an overreach, Mr. Greimel sent the governor and other state officials a public letter on Thursday expressing his outrage.

    Sara Wurfel, a spokeswoman for Mr. Snyder, defended the approach in a statement, saying that its “intent is absolutely to return full control to elected officials as quickly and efficiently as possible, but while ensuring the long-term financial success of the municipality or school district.”

    Still, the City Council called for “agents of the state to cease and desist immediately.” It passed the toothless resolution last month, overruling a veto by Mr. Jukowski, who has argued that fighting the state will only prolong its short leash on the city.

    And yet, the mayor and council members are still running for re-election in November. Mr. Jukowski placed second in a nonpartisan primary in August and will face Dr. Deirdre Waterman, an ophthalmologist and widow of a popular judge in Pontiac, in a runoff that many view as a referendum on Mr. Jukowski’s cooperation with Mr. Schimmel.

    The shifting power struggle continues to puzzle more than a few residents. “I’m kind of confused about who’s running the city,” said Robert Cluckey, 55, asking for clarification during the public comment portion of a recent Council meeting.

    No one answered his question.

    http://www.nytimes.com/2013/09/16/us/pontiacs-rough-road-to-recovery-could-indicate-detroits-path.html?pagewanted=all
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  2. #2
    Senior Member JohnDoe2's Avatar
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    Detroit is now the sixth Michigan city placed under state oversight. Pontiac, Flint, Ecorse, Allen Park and Benton Harbor already have managers, as do public school districts in Detroit, Highland Park and Muskegon Heights.

    March 14, 2013
    http://www.nydailynews.com/news/national/michigan-expected-announce-state-takeover-detroit-article-1.1288550
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