Council votes for bond measure to avoid EFM

Sunday Times Newspapers

ALLEN PARK – The City Council voted Tuesday to issue $2.2 million in bonds as a “one time Band-Aid,” to prevent running out of money before its fiscal year ends in June.

In a 4-3 vote, councilors approved the measure, which financial manager firm Plante and Moran’s Carl Johnson told councilors was their last-ditch effort to avoid payless employee paydays, an automatic trigger for an emergency financial manager, who has the authority to issue the same debt and can also void contracts and dismiss elected officials.

“Every last one of you will hate having an EM in here,” Johnson said. “I encourage you to do what you need to do to keep one out.”

The city faces a $2.5 million shortfall this year, even after a 3.5 mill police and fire millage, and Johnson projects without action it will run out of general fund money in March. A $4 million deficit is also projected for the following year, and the state treasury will not allow a second fiscal stabilization bond proposal.

The sticking point for the council has been Fire and Police negotiations, which reached a tipping point last February, when the previous council issued and later rescinded layoff notices to its entire fire department. The council wants more concessions from the department, the members of which contend that they opened up a close contract in 2010 and are already minimally staffed.

Councilors have said a millage to cover the annual $3.5 million subsidy to the city’s failed 104-acre movie studio property is needed, but such a proposal was voted down in November.

“My goal is to give us enough time to do our due diligence,” Councilman Bob Keenan said. “No one is going to give us a millage right now until Police and Fire step up to the plate. We need a millage, there’s no question about it. We cannot cut ourselves out of this debt.”

But Johnson pointed out cutting staff in those departments to state-minimum levels would bring in $3.5 million a year.

“We’re talking about being short at least $4 million next year,” Johnson said. “What do we do the next year? And that is with devastating low levels of everything.” Councilmen Dennis Hayes, Harry Sisko and Angelo DeGiulio dissented in the vote.

“This reinforces the fact that we’re not getting concessions,” Hayes said. “I think it sends the message that there’s always a way to avoid making tough choices. I understand that the Police and Fire can’t give us enough to make this $2 million … but absent some movement on their part, I can’t support this myself.”