Some communities avoid financial managers through bailouts!

[brizee]

How damn convenient is that?

[corktownyuppie]

How damn convenient is that?

I don't agree with you much, I'm with you on this position. I'm in favor of the EM laws, but let them be applied to everyone.

[Detroitnerd]

Well, isn't that neat? A nice trick. They were so busy giving away free money to their developer friends that now they're going to get bailed out.

I'd rather have bailouts for services for people who actually live here, not so a bunch of unused sewer systems can sit in the ground...

[bailey]

Well, isn't that neat? A nice trick. They were so busy giving away free money to their developer friends that now they're going to get bailed out.

I'd rather have bailouts for services for people who actually live here, not so a bunch of unused sewer systems can sit in the ground...

silver lining to this is that its open to any community after failing to pass as originally planned [[which restores my faith, if only a little bit that someone in Lansing was paying attention)... and could, if I'm reading this right, right the ship in the affected communities a lot faster.

Harris’ plans include a 5-year deficit elimination plan and an application for a $7 million loan from the Michigan Department of Treasury. The loan is part of House Bill 5566 that provides low interest loans to struggling cities. If accepted, it would eliminate Benton Harbor’s deficit and pay off debts to vendors and pensions.
“It would be a game-changer for the city,” said [Benton Harbor Mayor James] Hightower, who likened the loan to paying off credit card debt with a student loan. “This bill was actually created with Benton Harbor in mind.””

[iheartthed]

Have either of the major dailies written about this at all?

[Lowell]

Complete this phrase. What goes around...

What a well-written blog posting. From the article, it appears that the Republican-dominated townships of Livingstone County may not be out of the doo doo even with the bailouts.

Then what? They get to lose our State tax dollars by paying off their friends carrying the debt, and then go under? Hmm...

And, yeah, I hear you ihearthed where are the other major media on this?

[313WX]

And does this actually surprise anyone?

We all know the EM law was drafted specifically for Detroit. Flint, Benton Harbor, Pontiac, etc. were all test drives.

[Wesley Mouch]

How damn convenient is that?

A most interesting article.

Main point --> This doesn't seem to be a 'bailout'. Just a loan.

Nonetheless, the point is valid. You can always count on politicians to find a way to increase public debt.

You have to give them credit. When they've maxed out their credit card, they just find another way.

[GUSHI]

Want hamtramck mostly white when they had a financial manager? It always has to be about race in this region, doe st it,so sad.

[Hermod]

In fairness to Handy Township [[Fowlerville), they were trying to stay ahead of the game.

When I worked for the City Engineer for Troy in 1959, they had a huge backlog of subdivisions built with wells and septic tanks when it was just a rural area.

As these subdivisions multiplied, the issue of septic tank drainage became acute and the city was rushed into a massive catch up program in the late 1950s and early 1960s to install city water and sanitary sewerage [[sewage is what runs through the sewerage, seven credit hours of Sanitary Engineering taught me something) to these subdivisions.

Handy County was "betting on the come" and it was only the collapse of the housing bubble that made it a bad choice [[and they were not the only ones caught with their pants down when the bubble collapsed).

[Novine]

It was a bad choice from day one. Local governments shouldn't be financing private development this way. As the past few years have shown, this has exposed taxpayers to huge financial risks and now taxpayers are eating the losses while those who saddled the communities with these debts have walked away from the mess that they have created.

[Hermod]

It was a bad choice from day one. Local governments shouldn't be financing private development this way. As the past few years have shown, this has exposed taxpayers to huge financial risks and now taxpayers are eating the losses while those who saddled the communities with these debts have walked away from the mess that they have created.

So, "build it and they will come" is just fine as a justification for pissing away government money on the magic choo-choo up Woodward, but not to try to increase the tax base of your rural community?

[Wesley Mouch]

It was a bad choice from day one. Local governments shouldn't be financing private development this way. As the past few years have shown, this has exposed taxpayers to huge financial risks and now taxpayers are eating the losses while those who saddled the communities with these debts have walked away from the mess that they have created.

Yes. Government shouldn't ever be in the real estate speculation business. Look at Allen Park. This just proves that race has nothing to do with it. Stupid whites got into this mess. Stupid blacks got into this mess.

Lessons:

1) Government stay out of anything except the basic.

2) Money in government has corrupted government just as much as it has in the private sector. Get the money out of government.

[Detroitnerd]

So, "build it and they will come" is just fine as a justification for pissing away government money on the magic choo-choo up Woodward, but not to try to increase the tax base of your rural community?

Hermod! 1963 is calling. They want their ideas back.

[iheartthed]

So, "build it and they will come" is just fine as a justification for pissing away government money on the magic choo-choo up Woodward, but not to try to increase the tax base of your rural community?

Difference is that transit is a traditional function of the government. When residential development is funded by the government it's usually called "the projects"...

[Hermod]

Difference is that transit is a traditional function of the government. When residential development is funded by the government it's usually called "the projects"...

1. Transit is supposedly for moving people and eliminating traffic clogs. The justification that I keep hearing on DetroitYes is that it will promote the establishment of delightful little boutiques and coffee houses along Woodward.

2. Provision of water/sewer services to an area is a valid government function as well. In this case, the government tried to anticipate the needs and got caught holding the bag. They were not trying to build housing.

[Detroitnerd]

Government is just there to aid market forces and investment.
Except when it's using a mode I wholeheartedly object to.

[antongast]

1. Transit is supposedly for moving people and eliminating traffic clogs. The justification that I keep hearing on DetroitYes is that it will promote the establishment of delightful little boutiques and coffee houses along Woodward.

Moving people is a good reason for building transit. Detroit has people in it and they need to go places.

Eliminating traffic clogs in central cities is a dumb policy goal in the first place, regardless of how you go about doing it. Traffic clogs are a side effect of a vibrant and thriving urban agglomeration, and the only real way to eliminate them is to make your city crappier so fewer people will want to spend time there. Detroit has been employing this congestion-mitigation strategy for decades, and it has been spectacularly successful.

What transit does help you eliminate is the need to use a bunch of land in what should be your densest and most interesting parts of town to store people's cars. This allows those parts of town to become denser and more interesting, and helps them compete with suburban areas on their own terms instead of on the suburbs' terms. Whether this results in boutiques and coffee shops or something else seems like mostly a demographic issue that's largely irrelevant to the case for or against transit.

[douglasm]

Hermod is absolutely correct. In the little Washington town where I'm a city councilman, we just completed a $10m project to bring wastewater treatment to the whole [[275 ERUs) town. One of the main reasons was that failing septic systems had seriously degraded our water supply.

And yes, you're taking a chance. The other justification was that it would allow for development. We're 8 miles south of the nearest "large" city and land is reletively cheap here. But without sewer, due to our soil composition, you'd need a quarter acre lot to accomidate the drain field if you want to build a single family home. With sewer, 80 X 120 works just fine. As a town of 900, we could not sustain city services without increasing our population [[read tax) base. And frankly, I'd rather take a chance on being ready for development rather than what some communities did during the last housing boom, that is, pushing development then going around and playing catch up when things begin to fail.

[Novine]

"2. Provision of water/sewer services to an area is a valid government function as well. In this case, the government tried to anticipate the needs and got caught holding the bag. They were not trying to build housing."

Let's repeat - Local governments shouldn't be financing private development this way. There are ways for water and sewer service to be extended to these developments that didn't leave local taxpayers footing the bill. The way they chose did the opposite.

[Hermod]

Let's repeat - Local governments shouldn't be financing private development this way. There are ways for water and sewer service to be extended to these developments that didn't leave local taxpayers footing the bill. The way they chose did the opposite.

Construction of water and sewer services are not "private development", they are a very specific government function [[has to do with public health and the environment doncha know).

These are paid for with some mix of user fees, direct impact fees paid for by developers, assessment on the property serviced , and by general revenue.

In this case, the governing bodies chose to do a direct assessment to be paid at the time the property sold. Was it wise? Obviously with the benefit of 20-20 hindsight, it was not. Was it legal? Yes, it was within the powers of the locals to do this.

[gnome]

I agree Hermod, I am not seeing anything other than bad guessing coupled with bad timing. There has not been a spread of evidence placed into review that shows otherwise.

The money raised through the bonds is not unusual and has not disappeared down a Bobby Ferguson rabbit hole. According to news reports, the pipes are laid, the facilities built, they are just not being used right now.

Is there anyone here that will bet their paycheck that housing will not continue to be developed in Livingston County once the Recession is over? Not that it should be built, but that it won't be built?

I understand the feeling here that all sprawl is evil, and I would tend to agree, however, despite my feelings to the contrary folks like to build on the outer fringe of the metroplex. They've been doing that since before Urbanrest changed its name to Ferndale; before Halfway changed to East Detroit and before Westland named itself after a shopping mall.

To lay some evil intent on the hapless folk in Handy Township is a bit of an overreach considering the folks in Washington and Wall Street didn't see this crash coming.

Who here did? who here used that insight to their advantage? Who here shorted GM or Chrysler? Who here knew Counrtywide was bogus, or Bear Sterns? Who here could swear they saw Freddie Mac dissolving?

Yet, that is what many here are saying, that these politicians are guilty of not looking in their crystal balls correctly.

hog-wash.

You can not like them, campaign against them, give money to their opponents, write letters to the editor, but can you really blame them for being bad soothsayers?

[douglasm]

Again, Hermod is correct when it comes to funding. I don't know about 15 years ago, but nowadays, funders want to see a repayment plan. That is, an income stream projection for how you're going to pay for a project. But they're called "projections" for a reason. A town north of here had been growing like a weed before the recession, and had laid a lot of pipe and had projected rates and repayment based on 20 ERUs coming into the system a year. Alas, when the bottom dropped out, that rate dropped to about 5, and now they're going to have to raise their sewer rates to cover their expense.

[Novine]

These debts are for the water and sewer lines within the developments that went belly-up. Those costs should have been the responsibilities of the developer of those properties, not the local government. The fact that many other local communities saw similar developments go bust and weren't left on the hook for the costs shows how poorly those communities that are left paying the bill were served by their elected officials.

More importantly, the fact that the state is coming it to bail out these communities, with state tax dollars, without imposing the same strict requirements that are being imposed on communities like Flint and Detroit shows the hypocrisy of Lansing lawmakers. It's one standard for the cities and another for the suburbs.

[Hermod]

"These debts are for the water and sewer lines within the developments that went belly-up. Those costs should have been the responsibilities of the developer of those properties, not the local government."

Those pipes are owned by the governmental entity and are laid in easements deeded to the governmental entity by the developer. The pipe connections from the individual homes in the subdivision to the government-owned common lines running to the subdivision are the responsibility of the developer and were not paid for by the township as most of the houses were not built.

"More importantly, the fact that the state is coming it to bail out these communities, with state tax dollars, without imposing the same strict requirements that are being imposed on communities like Flint and Detroit shows the hypocrisy of Lansing lawmakers. It's one standard for the cities and another for the suburbs."

Do you have any idea as to exactly what a rural township is? Do you have any idea as to the scope of its budget? We are not talking about cleaning up a nest of grifters and professional politicians here. This is a case where bankruptcy courts would provide relief under a "debtor in possession" system rater than appoint a receiver because of the relatively small amount of money involved. This is a temporary loan to help them get their house in order.