AP appeal of EFM decision denied

Sunday Times Newspapers

ALLEN PARK – The state has denied an appeal by the city of the Treasury’s decision to assign an emergency financial manager to the city.

In an Oct. 1 letter to Gov. Rick Snyder, Deputy State Treasurer Roger Fraser said a Sept. 19 hearing in Lansing at which city representatives appealed the decision, found a review team’s findings of a financial emergency “were accurate and contained no material omissions.”

According to the letter, during the hearing, city representatives City Attorney Chris Forsyth, Mayor William Matakas and Interim City Administrator Dave Boomer argued that the decision be revoked because of a plan to eliminate the city’s $6 million deficit they said they had presented to the review team but had not been included in its final report.

The plan includes an application for a $2 million state emergency loan; the acceptance of a $1.2 million Staffing for Adequate Fire and Emergency Response grant, which was awarded in August but the city has not yet voted to accept; an anticipated $278,000 savings from American Federation of State County and Municipal Employees union contract negotiations; a $438,000 reduction in retiree health care spending; the enforcement of an existing agreement with Fairlane Green Shopping Center that could net $88,000 in emergency medical service runs annually; and a 3.0 million millage issue, if passed in November.

They also argued that under Michigan Public Act 72, in place until a November vote on controversial “emergency manager act” Michigan Public Act 4, an emergency financial manager could not reopen police or fire contracts or address the city’s Southfield lease property or outstanding bond debt.

The review team’s response, included in the letter, writes off much of the plan as “speculative proposals that have not been implemented or that might, possibly never be implemented” and “a series of disjointed efforts, none of which had been or were likely to be successful.”

They took specific issue with the Fairlane Green agreement, noting the city had not billed the shopping center in seven years. They also noted that the millage issue was similar to those that had failed twice in the last year.

The review process began in March when the city sent a letter to the Treasury requesting a financial review, a step they said at the hearing was meant to seek Snyder’s assistance in city financial issues and “provide a wakeup call to some City Council members and the citizenry,” not to turn the city’s finances over to the state.

An EFM has not yet been assigned.