Detroitemergency-manager-lawhamtramckVideo

Hamtramck Financial Review Team Appointed By Michigan Governor Rick Snyder

Hamtramck Undergoing Process That Could Lead To Emergency Manager
Kate Abbey-Lambertz and David Sands
|
Open Image Modal
DETROIT, MI - MARCH 1: Michigan Governor Rick Snyder talks with the news media after announcing that he will appoint an Emergency Financial Manager for the city of Detroit during a town hall meeting at Wayne State University March 1, 2013 in Detroit, Michigan. Detroit has more than $14 billion in debts and liabilities. The City has 10 days to appeal Gov. Snyder's decision. (Photo by Bill Pugliano/Getty Images)

Michigan Gov. Rick Snyder appointed a financial review team Wednesday to look at the books of Hamtramck, a city within Detroit.

The appointment under Public Act 436, commonly known as the emergency manager law, follows the Michigan Department of Treasury's preliminary review of the City, which found a "serious financial condition."

Hamtramck was historically a Polish enclave that now has a particularly ethnically-diverse population. The small city is surrounded by Detroit and has faced similar problems, like unemployment, loss of auto jobs and decreased services.

The review was undertaken at the request of city officials, the state said.

According to a Treasury statement, the review team members are:

  • Ed Koryzno, administrator, Office of Fiscal Responsibility (State Treasurer’s designee). Koryzno was previously city manager of Ypsilanti for more than 15 years.
  • Doug Ringler, director, Office of Internal Audit Services within the Department of Technology, Management and Budget (DTMB) (DTMB's designee). Ringler is a certified public accountant and certified internal auditor.
  • Eric Lupher, director of Local Affairs, Citizens Research Council of Michigan (nominee of the Senate Majority Leader). Lupher has worked for the organization since 1987, most recently on "local government matters, including intergovernmental cooperation, governance issues, and municipal finance."
  • Max Chiddister (nominee of the Speaker of the House of Representatives). Chiddister was formerly the executive director of the Detroit Public Safety Foundation, spent 18 years as vice president of government affairs for J.P. Morgan Chase/Bank One and previously served two terms as mayor of Goshen, Ind.
  • Frederick Headen, legal advisor for the Michigan Department of Treasury. Headen worked with the Treasury since 1997. Previously he had a position as legal counsel for the Citizens Research Council.

The Department of Treasury pointed to several problems in Hamtramck, according to a statement. State officials don't believe the City's submitted deficit reduction plan is sufficient, or that it adequately addresses structural debt. Current budgets don't comply with laws about deficit spending. They also have not made $2 million of required pension contributions to avoid problems with cash flow.

In 2012, Hamtramck's City Council fired City Manager William Cooper after he issued a warning about impending payless paydays. At the time, a projected budget shortfall of $2 million prompted speculation that Hamtramck might be the subject of a state takeover.

If Snyder does eventually appoint an emergency manager to Hamtramck, it wouldn't be the first time. It was declared to be in a financial emergency under an older law in 2000, and Louis Schimmel, the current EM of Pontiac, Mich. was appointed Hamtramck's emergency financial manager by Gov. John Engler in 2000. According to an online biography, Schimmel served for five years, during which time he "sold unused assets, out sourced services, resolved numerous long standing legal matters and streamlined city government operations."

The review team has 60 days to determine whether a financial emergency exists in the City of Hamtramck, after which they are allowed to request one 30-day extension.

Under the new emergency manager law PA 436, EMs have extraordinary powers, including the ability to revoke collective bargaining contracts, sell off public assets, impose taxes on residents without a vote and discharge elected officials. The law is an updated version of Public Act 4, which was repealed by voters last November. State legislators passed the new version last December and it took effect in March. During the interim period, an older law was in place that allowed the state to appoint officials with more limited powers, known as emergency financial managers.

Last month, the state appointed Kevyn Orr as emergency manager for Detroit after a financial review team found a severe fiscal emergency. Including Detroit, six Michigan municipalities (as well as three school districts) have emergency managers:

View Michigan Cities With Emergency Managers in a larger map

CLARIFICATION: A previous version of this story identified financial review team appointee Max Chiddister as the executive director of the Detroit Public Safety Foundation, as stated in a release from the Michigan Department of Treasury. Chiddister no longer holds the post of executive director as of October 2012, a spokeswoman for the foundation said.

Our 2024 Coverage Needs You

As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.

Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.

to keep our news free for all.

Support HuffPost

Before You Go

Where Do Michigan Pols Stand On An Emergency Manager for Detroit?
Michigan Gov. Rick Snyder(01 of10)
Open Image Modal
Gov. Snyder had campaigned aggressively for Michigan voters to keep PA 4, the emergency manager law. After it was repealed, a similar law was passed through (along with right-to-work and other legislation) in December.In a Nov 2012 interview with The Huffington Post, Gov. Rick Snyder argued against cities in Michigan like Detroit filing for bankruptcy. "Theoretically, if you were able to do Chapter 9 in an efficient fashion, in a structured fashion, where you had everything lined up, you could actually address some of those issues, probably in a more total approach. But the track record, so far, has been pretty dismal. And the associating stigma of what it does, trying to get people to go there in the interim, is even worse." (credit:(AP Photo/Carlos Osorio))
Andy Dillon, Treasurer, State of Michigan(02 of10)
Open Image Modal
Dillon headed the six-member financial review team which declared the city in a state of emergency.At a press conference to announce the team's findings, Dillon said, "We believe there's a financial emergency in the city and that there's no plan in place to correct the situation." "We gave the city every chance to avoid the outcome we're recommending to the governor today." (credit:Michigan State Treasurer Andy Dillon discusses Detroit Financial Review Team in Detroit, Tuesday, Feb. 19, 2013. (AP Photo/The Detroit News, Ricardo Thomas))
Detroit Mayor Dave Bing(03 of10)
Open Image Modal
An hour after a state-appointed financial review team unanimously declared that the city of Detroit was in a state of financial emergency, Mayor Dave Bing issued a statement that began with an admission that, yes, the city's finances are in a poor state."Certainly I am not surprised by the findings of the State’s financial review team. My Administration has been saying for the past four years that the City is under financial stress.If the Governor decides to appoint an Emergency Financial Manager, he or she, like my Administration, is going to need resources -- particularly in the form of cash and additional staff." (credit:(AP Photo/Carlos Osorio, File))
State Senator Coleman A. Young II(04 of10)
Open Image Modal
Young issued this statement following the state review team's findings.“This is going to be a usurping of our democracy. I feel this was a set-up from the word go. If the State listened to reform measures suggested by citizens in the City of Detroit, we would not be in this situation. How can the State fix something they are culpable for? I am as outraged as I am heartbroken about this systematic dismantling and take-over of our City. The people will not let this stand, nor will I.” (credit:Senate Dems)
Charles Pugh, Detroit City Council President(05 of10)
Open Image Modal
In 2011, Pugh said that city officials had the power to fix the city's finances."“Talking about an emergency manager is a waste of breath,” Pugh told MLive. “We don’t need it. We’re working on a plan.” (credit:City of Detroit)
State Sen. Bert Johnson, D-Detroit(06 of10)
Open Image Modal
In an editorial written in Sept. 2012 for MLive.com, Sen. Bert Johnson urged Michiganders to vote "no" on the referendum over PA 4, the emergency manager law."The presence of an EM eliminates, for the duration of the appointment, the rights of voters to elect local officials and displaces them at the time of the appointment. Governments occupied by an EM are inevitably subject to new costs and expenses, forced upon them by the state, without access to new revenue.Simply put, EMs are undemocratic individuals who can singlehandedly craft new laws and operate as an unfunded mandate on local government. PA 4 is unconstitutional and a slap in the face to our Founding Fathers." (credit:Senate Dems)
L. Brooks Patterson, Oakland County Executive(07 of10)
Open Image Modal
At a Detroit Economic Club panel held during the 2013 NAIAS that included southeast Michigan's four most prominent political leaders, L Brooks Patterson told the crowd that an EM in Detroit was needed to start "kicking ass and taking names." He also said that an EM was preferable to the city going through bankruptcy. "You don't want to go through bankruptcy," Patterson said, according to MLive. "You're going to get some judge in Atlanta or somewhere who knows nothing about the region calling the shots." (credit:Oakland County)
Jo Ann Watson, Detroit City Councilmember(08 of10)
Open Image Modal
In a Jan. 2012 letter authored by Watson, who has vigorously opposed the appointment of an EM, she offered many suggestions for lowering Detroit's debt. They included a bailout, renegotiating debt service payments and demanding that banks be held legally and fiscally responsible for issuing subprime mortgages that contributed to foreclosures in the city."Public Act 4 joins the infamous litany of racist, repressive, right-wing, undemocratic policies that challenge the very framework of the Constitution of the United States," she wrote. (credit:City of Detroit)
Wayne County Sheriff Benny Napoleon(09 of10)
Open Image Modal
Napoleon has formed an exploratory committee in regards to running for mayor of Detroit in 2013, but has not formally declared his candidacy. He issued a statement following the review team's findings, which included this text.“The worst kept secret in Detroit has been that the financial review team would likely come back with a report that recommends that an emergency financial manager be appointed here in Detroit.“I firmly believe that each and every community has a right to elect local leadership to address that community’s problem and I campaigned to repeal Public Act 4 with that belief,” he said. “That said, it is incumbent upon the local officials to recognize that there is a problem; how dire that problem is; and to make the tough decisions to address them. We have not done that here in Detroit, which is why we are having this conversation today." (credit:BennyNapoleon.com)
Gary Brown, Detroit City Council President Pro Tem(10 of10)
Open Image Modal
Brown issued a written statement following the review team's findings. In part, he said the pace of change in Detroit has been too slow."The political will has often not been there to make the necessary and bold fiscal reforms.. Without a doubt, we need the support and accountability that a State of Michigan partnership offers. We cannot address our legacy obligations alone. And, as Detroit goes, so goes Michigan." (credit:GaryBrown4Detroit.com)
Suggest a correction
|
Submit a tip