PA4 – Emergency Managers

Public Act 4 of 2011,“The Local Government and School District Fiscal Accountability Act” has created elite bureaucrats with absolute power by expanding the role and power of Michigan’s emergency financial managers. This legislation supersedes the previous emergency financial manager policy and court decisions that provide accountability and support democracy. Many municipalities and school districts in Michigan’s urban areas are threatened by the extremes this policy takes in the sign of financial distress.” [From Michigan Forward]

Here is a more in depth overview prepared by Chris Savage of Eclectablog:

Overview of Public Act 4 – The “Financial Martial Law Act”
Prepared 6/23/2011 by Eclectablog
Posted at Eclectablog.com – distribute freely with attribution.

OVERVIEW OF P.A. 4

  • Emergency financial managers (EFM) law originally signed in 1990 by Governor Blanchard. Since then, 10 EFMs have been appointed. EFMs can be appointed for school districts or municipalities.
  • Currently three cities and one school district have emergency managers: Benton Harbor, Ecorse, Pontiac and Detroit Public Schools.
  • In March of this year, Governor Snyder signed Republican-passed legislation into law that is formally titled the “local government and school district fiscal accountability act”. It is also known as Public Act 4 of 2011 (P.A. 4) or the “Financial Martial Law Act”.
  • The new law changes the name from “Emergency Financial Manager” to “Emergency Manager”. It lays out a list of almost 20 conditions under which an EM may be appointed. Local governments pay the EM’s salary.
  • P.A. 4 gives sweeping new powers to EMs that include:
    • Modifying or cancelling contracts
    • Modifying or cancelling collective bargaining agreements
    • Acting as the sole agent of the local government in collective bargaining negotiations
    • Acting as the sole trustee of the local pension board
    • Assuming complete control over local governments and can prohibit elected officials’ access to office facilities, email and internal information systems
    • Consolidate or eliminate government departments
    • Remove current department heads, administrators
    • Sell, lease, convey, assign or other use or transfer assets of the local government or school district
    • Dissolve or disincorporate the local government and assign its assets
    • Developing academic and educational plans
    • Receiving and disbursing all federal, state and local funds earmarked for the local government or school district
    • “Take any other action or exercise any power or authority of any officer, employee, department, board, commission or other similar entity of the local government whether elected or appointed”
  • Many of the actions must be approved by State Treasurer Andy Dillon

RAMIFICATIONS FOR MICHIGAN

  • Disenfranchises Michigan voters by stripping away the powers of their local, elected officials and giving them to a single, appointed individual
  • Forces local governments to pay the costs for the EM
  • Reneges on previously-negotiated contracts and collective bargaining agreements
  • Allows the EM to assume control over academic and educational plans
  • Allows public assets to be sold off to private interests

SOME EXAMPLES
Benton Harbor

  • City Commission relegated to “call meetings to order, approve minutes, and to adjourn meetings”
  • Any actions taken by City Commission must have the following tagline:

“THE FOLLOWING ACTION TAKEN OR DECISION MADE BY THE CITY COMMISSION WAS NOT AUTHORIZED BY THE EMERGENCY MANAGER AND IS NULL AND VOID, AND OF NO FORCE OR EFFECT.”

  • Reconfigured Planning Commission and Brownfield Redevelopment Authority
  • Outsourced city services

Pontiac

  • Outsourced water treatment to a foreign-owned company facing a 26-count DOJ indictment for violations of the Clean Water Act
  • Broke contract with police dispatchers union
  • Disbanded the Planning Commission and replaced it with his own people

Highland Park

  • Criminal embezzlement and misconduct charges filed against former EM Arthur Blackwell. Forced to pay back $264,000 to city after his tenure as EM from 2004-2009.
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