Michigan EFMs Make Progress

[erikd]

The Free Press and the News both ran stories today about the EFM situations in Pontiac and Benton Harbor.

From the Freep:

New details emerged today in the Pontiac fire fighters' agreement on Wednesday to dissolve and merge with Waterford Township’s department rather than risk losing their jobs altogether. The 57 firefighters voted on a plan presented by the city’s emergency manager that would save the nearly insolvent city some $3 million. As part of the merger, two fire stations in Pontiac would be closed, and the city would enter into a 10-year contract with Waterford Township at a cost of about $6.2 million per year for the first four years.The move would round out cost-cutting measures in public safety that also included outsourcing police duties starting Aug. 1 to the Oakland County Sheriff’s Office.
“I think residents will be happy,” said Pontiac Emergency Manager Lou Schimmel, who negotiated the deal with the fire department and earlier, with police.Within a couple of months, the sheriff’s office reported it increased warrant requests to prosecutors by some 300% to 400%, and had improved the arrest rate in the city by nearly 400%. Schimmel predicted similar outcomes with the fire merger.

http://www.freep.com/article/2011122...text|FRONTPAGE

[erikd]

From the News:

When Joe Harris was auditor general of Detroit, he conducted half a dozen studies that showed how the city could save money, including $15 million in its transportation department.
All the studies were ignored.
As emergency manager of Benton Harbor, he doesn't have that problem.
He searches for ways to cut costs, comes up with cheaper alternatives and implements them. He is the mayor, City Commission and city manager rolled into one.
He has sliced staff, rebid garbage collection, outsourced services and negotiated contracts. He drastically shrank the Fire Department and gave its duties to the policeWhen Harris arrived in Benton Harbor last year, he was shocked by what he found.
He knew the finances were perilous. But the fiscal management was atrocious.
The city used pension funds to pay salaries, he said. It paid $80,000 a year in overdraft fees. It spent $1.3 million more than it earned in the prior year.
When staffers objected to the unchecked spending, they were fired, leading to 10 city managers in 11 years.
Add that dysfunction to a city where nearly half of the 10,000 residents live in poverty and a quarter are unemployed and you had a municipal nightmare.
"He's done an excellent job, especially in light of the conditions he had to work under," said Mayor-elect James Hightower, one of the few commissioners who supports the emergency manager.
Harris began by visiting each city department to see what could be cut.
At public works, he learned it had nine heavy equipment operators but only five pieces of heavy equipment. Goodbye, four heavy equipment operators.
He discovered the city hadn't used the lowest bidder for garbage collection. He rebid the contract. Cha-ching! $100,000 saved.
He sought new proposals for property and casualty insurance. Cha-ching! Another $100,000 saved.
By the time Harris was done, he had pruned nearly a quarter of city staff, from 103 workers to 75.
And he cut yearly expenses by almost 20 percent, from $8 million to $6.5 millionThe biggest nuts for Harris to crack were police and fire.
The two departments, along with public works, accounted for 81 percent of the city budget.
The Fire Department, in particular, made the penny-pinching accountant shudder.
The city was spending $1.2 million for 10 firefighters to respond to 40 fires a year. Harris estimated that 95 percent of their pay went to waiting around for fires.
He hired the Washington-based International City/County Management Association to review police and fire with an eye toward cutting expenses.
"I'm the first person to tell you I'm not an expert on any of this," he said. "I have to get experts to get me recommendations so I can make the right decision."
He seized on one of the association's most drastic suggestions — combining the departments into a single agency whose members could respond to both crime and fires.
Most small municipalities are leery of making such a move. Police and fire unions oppose it and hold a lot of sway in local elections.
But Harris wasn't running for anything.
"I didn't have to be concerned about being elected in the next election," he said. "We just took the politics out of the decision-making process."
What's more, his powers grew exponentially in April.
New state legislation allowed emergency managers to nullify contracts, change collective-bargaining agreements and even dissolve locally elected councils.
When police and fire negotiated new contracts in July, they had little choice but to accede to Harris' demands.
The new Public Safety Department has three firefighters and 17 police officers who are being trained to fight fires. In the past, the city had 10 firefighters and 23 police officers.
The weakened unions also agreed, for the first time, to allow the use of part-timers — a dozen to fight fires and another dozen to spell the police.
The moves will allow the city to save $900,000 a year in firefighting costs, from $1.2 million to $300,000, said Harris.

http://www.detroitnews.com/article/2...xt|FRONTPAGE|s

[bailey]

From the News:

http://www.detroitnews.com/article/2...xt|FRONTPAGE|s

Thats racist! - Jessie Jackson.

[Zacha341]

It's coming! Withstanding what Jackson may say...

Corruption gone wild [[justified and long standing) has lead Detroit to this day of reckoning. You can only kick the can so far down the road.

Thats racist! - Jessie Jackson.

[Cincinnati_Kid]

My Nephew just retired from the City of Detroit last year, and he's worried about his pension. The EFM can't mess with it can they?

[R8RBOB]

My Nephew just retired from the City of Detroit last year, and he's worried about his pension. The EFM can't mess with it can they?

The EM can't mess with the pensions but a federal bankruptcy judge could.

[Lowell]

...also from the same article, buried at the bottom…

The transition from the old way of fighting crime and fires has been rocky.

In August, a home was destroyed when police were delayed in responding because they were at a crime scene.

A month earlier, the fire chief of neighboring St. Joseph was alarmed by a rise in the number of calls to help Benton Harbor firefighters.

I've always liked Joe Harris' blunt assessments and many aspects of the house-cleaning he did were needed. However, there is always two sides to a story.

In Highland Park in the 1990's we faced the same issue after Chryler headed for greener pastures. The city outsourced garbage collection and combined public safety training police in firefighting. I remember a story like the one above at the corner of my street. A beautiful arts and crafts bungalow was destroyed due to clearly incompetent fire fighting. Late arrival followed by tangled fire hoses, a hydrant not functioning and other miscues made it look like a scene from the Keystone Cops.

In the end all the cost cutting did not stave off bankruptcy and eventual state takeover. All the cops and firefighters lost their jobs and Wayne County Sheriff took over. Why? Because of [again from the article above]

Add that dysfunction to a city where nearly half of the 10,000 residents live in poverty and a quarter are unemployed and you had a municipal nightmare.

Add to that nearly a third of HP's revenues were going out to pay generous retiree benefits, granted when the city was a prosperous middle class community of 50,000 with a huge municipal workforce, with no return because zero retirees lived in the city.

The changes came and went, the financial managers did too, but little changed because there was little that could change.

Much of the discussion is about revenue cutting or sharing but we hear little about problem sharing.

Our state's troubled older cities cannot succeed under present conditions because they are stuck with legacy costs from happier times, neglected infrastructure and, most harmfully, are stuck carrying a hugely disproportionate percentage of their metro region's citizenry who cannot pay taxes but who indeed require tax revenue for their attention.

Their municipal workforces become dispirited and leave at the first opportunity, leaving training cost and the inefficiencies of new replacements who, in turn, also look to get out. Their impoverished citizens are largely uneducated, often illiterate, and become gullible to corrupt politicians who line their pockets and move on.

Throw on punitive insurance rates and high crime rates and we will still have a wobbling overloaded and underfed camel no matter what magic Joe Harris may try. It's a little like occupying Iraq or Somalia then leaving it. The true measure of what an EMF accomplishes will only be known long after he departs.

[Baselinepunk]

One thing that could help this whole State: reform the legal system from where a stubbed toe gets you a million to something more reasonable.

Hyper generalization; yes absolutely. However, if Dick really wanted to make a strong affect of what goes on in this State he could have started there. While we're at it; let's go back to banning lawyers from advertising to the point where they can say "hey, we're here if you need us; this is what we can help you with" instead of "hey, I can rape these bastards for you to the tune of ......".

It's getting flipping ridiculous with how jammed our legal system is in this State with folks looking to hit the lottery.

[Wesley Mouch]

Many good points -- a few thoughts...

...
...A beautiful arts and crafts bungalow was destroyed due to clearly incompetent fire fighting. Late arrival followed by tangled fire hoses, a hydrant not functioning and other miscues made it look like a scene from the Keystone Cops....

If we criticize every attempt to improve, we won't ever move forward. Some steps will fail, and some will have costs. I share anguish over lost historic structures, but in the final tally, more were lost due to the city's economic failures than to some ineptitude in the transition to efficiency.

...The true measure of what an EMF will only be told long after he departs.

As the 'true measure' of many of our past politicians and administrators is now just being told.

[corktownyuppie]

Our state's troubled older cities cannot succeed under present conditions because they are stuck with legacy costs from happier times, neglected infrastructure and ,most harmfully, are stuck carrying a hugely disproportionate percentage of their metro region's citizenry who cannot pay taxes but who indeed require tax revenue for their attention.

Their municipal workforces become dispirited and leave at the first opportunity, leaving training cost and the inefficiencies of new replacements who, in turn, also look to get out. Their impoverished citizens are largely uneducated, often illiterate, and become gullible to corrupt politicians who line their pockets and move on.

Throw on punitive insurance rates and high crime rates and we will still have a wobbling overloaded and underfed camel no matter what magic Joe Harris may try. It's a little like occupying Iraq or Somalia then leaving it. The true measure of what an EMF accomplishes will only be known long after he departs.

This commentary is exactly what is missing from the public debate, which somehow always turns into finger-pointing and race-baiting.

Highland Park paying millions of dollars in pensions to people who no longer reside in the city? It's a recipe for disaster. It's like my example of everyone turning 62, register for social security, then moving to Canada.

Novine states in an earlier thread that there can be no long-term solution without a plan for capital injection and growth. I wholeheartedly agree. But I also emphasize that no sane person would be willing to inject capital into a system that's broken. Also, no sane person would be willing to inject capital into an environment that's hostile toward them.

When an empty building is generating $0 in property tax, and a developer wants to come in and build a building that will attract 200 new residents, 200 new sets of income tax, and 200 more people to do commerce in the city...it's absurd to say that the act of waiving his property tax requirements means that existing citizens are somehow "footing the bill".

We can argue about who to waive them for, or for how long, or for how much. Fine. That's a debate worth having. But we need to start with the same set of facts.

What would you rather have? 200 people paying $1,000-2,000 in income tax each in a building with $0 property tax....or an empty building with 0 people, with 0 income tax, and with 0 property tax.

Our long-term growth plan must involve having much, much, much more of the first, and much, much less of the second.

[Cincinnati_Kid]

The EM can't mess with the pensions but a federal bankruptcy judge could.

That's not good then. Been hearing they are leaning more towards bankruptcy, then a EFM.

[Zacha341]

Yeah, it may hit just that hard and fast - they're gonna skip the EFM niff-nawing!

Instead go straight to the 'bank' - the bank of bankruptcy that is.

So much fiscal damage was hidden and window dressed during this administration and previous ones... No place to hide now sadly.

That's not good then. Been hearing they are leaning more towards bankruptcy, then a EFM.

[Ravine]

...But I also emphasize that no sane person would be willing to inject capital into a system that's broken. Also, no sane person would be willing to inject capital into an environment that's hostile toward them...

Now there's a remark that you could justifiably cross-post to the thread about the downfall of the light-rail plan.