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Proposal 1

Michigan village succeeds under emergency manager

October 31, 2012
The Daily News

DETROIT (AP) - It was 2008 and Three Oaks, a small southwest Michigan village, was in deep fiscal trouble and having fits.

"We had zero money in the bank. We couldn't pay any bills. We had to stop everything," said Dave Grosse, village president.

The state stepped in and by December former Democratic Gov. Jennifer Granholm appointed Lansing attorney Pamela Amato as emergency manager. A year later, control was restored to village officials and in October 2011 Three Oaks officially was no longer under state receivership.

"She didn't do anything that we couldn't have done," Grosse said of Amato. "But she could do it much faster. She could cut through all the red tape. When she came in the council sat down with her individually and said 'we're all going to be partners. We've got to straighten this out.'"

That has made Grosse a proponent of the state's emergency manager law and why he thinks that on Nov. 6 voters across Michigan should vote "yes" on Proposal 1, keeping Public Act 4 on the books.

Proposal 1 has been among the most heated state referendums to be decided on Nov. 6.

Fact Box

How the proposal appears on the ballot

IRON MOUNTAIN - Michigan voters will decide six ballot proposals in the Nov. 6 General Election.

The wording of the first proposal as it appears on the ballot is:

PROPOSAL 12-1

A REFERENDUM ON PUBLIC ACT 4 OF 2011

THE EMERGENCY MANAGER LAW

Public Act 4 of 2011 would:

- Establish criteria to assess the financial condition of local government units, including school districts.

- Authorize Governor to appoint an emergency manager (EM) upon state finding of a financial emergency, and allow the EM to act in place of local government officials.

- Require EM to develop financial and operating plans, which may include modification or termination of contracts, reorganization of government, and determination of expenditures, services, and use of assets until the emergency is resolved.

- Alternatively, authorize state-appointed review team to enter into a local government approved consent decree.

Should this law be approved?

Public Act 4 was signed into law in March 2011 by Gov. Rick Snyder and expanded the powers granted emergency managers under the older Public Act 72. Among other things, the new law gave managers authority to rewrite union contracts and remove elected officials from office.

Currently, emergency managers are in Benton Harbor, Ecorse, Flint, Pontiac, Allen Park and the Muskegon Heights, Highland Park and Detroit school districts. The threat of the state appointing an emergency manager to the city of Detroit led this spring to a financial stability agreement between Mayor Dave Bing and Snyder.

Detractors say the law usurps local control and has been used to target cities and school districts with large black populations. The Stand Up for Democracy coalition opposes the new law and collected more than 200,000 signatures to get Proposal 1 on November's ballot.

Supporters contend the law merely safeguards fiscal accountability of local governmental units.

Under the law, the city council in Benton Harbor and school board in Detroit have been rendered impotent. Last month, the Flint City Council - as individuals - sued to stop its manager from instituting his policies.

Some control was restored to elected officials under Public Act 72 which has been resurrected while voters decide the fate of Public Act 4.

"When you dissolve the city council that doesn't work," said Melvin (Butch) Hollowell, an attorney for Stand Up for Democracy. "If you don't like what your elected officials are doing you vote them out. You don't act like a dictator and use heavy-handed Lansing to just take over."

But it worked in Three Oaks, contends Grosse and current city manager J. Patrick Yoder.

The village has just over 1,000 residents and is in Berrien County, north of the state line Michigan shares with Indiana.

Overspending and not paying close enough attention to its budget left Three Oaks with a $600,000 deficit and nearly devoid of cash, Grosse said.

A small city park was sold to the county for a quick infusion of revenue. A decision also was made to lay off the village's seven firefighters and contract fire service with the county to save money.

Without an emergency manager those things may not have gotten done quickly enough, Grosse said.

"Can you imagine the back and forth in a council meeting? We would have been there for three weeks," Grosse said.

The firefighters have been rehired as part-timers and the village is buying the park back on a land contract.

"When you're down to nickels and dimes it's amazing how creative you can get," Grosse said. "The emergency manager is not going to come down unless you have some serious trouble. Work with it. Get it fixed and get the emergency manager out of there and you have your town back."

Amato declined to be interviewed for this story, but Grosse and Yoder credits the cooperation between her and village officials with getting the job done.

"If people understand (the emergency financial manager statute) and utilize it properly, it's a godsend," said Yoder, who came in after Amato's work was done.

"We wanted to make sure that we maintained whatever momentum we had garnered in the year Pam was here. We wanted to make sure there was no overspending. In the last two and half years we have reserves, a balanced budget."

 
 

 

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