The State of Michigan Department of the Treasury sent out a press release on June 27, 2018 announcing that for the first time in 18 years, neither a school district or municipality in Michigan has an emergency manager. You can read the press release in its entirety here, but following is an excerpt.
“LANSING, Mich. – State Treasurer Nick Khouri today announced that no Michigan municipality or school district is under state financial oversight through an emergency manager for the first time in nearly 18 years. The…announcement comes after releasing Highland Park School District from receivership under the Local Financial Stability and Choice Act. Since 2000, there has been an emergency manager providing financial oversight somewhere in Michigan.”
For many years the Emergency Financial Manager (later changed to Emergency Manager or EM) concept was regularly maligned by some constituents, citing it as an overreach of state government at the loss of local control and racially motivated. The term carpetbagger was bandied about as well. One respected national government trade publication headlined a 2012 article, Emergency Financial Managers: Michigan’s Unwelcome Savior. As local government financial advisors ourselves, (Katrina was the State-appointed City Manager for Hamtramck from 2014 to 2017) we, but especially Katrina, have been on the receiving end of some hurtful and untrue verbal attacks about roles and motives.
The Emergency Manager law was specifically called out as a major contributor to the Flint water crisis. While Flint was indeed a catastrophic failure on many government fronts, it is unfair to paint every EM situation as one with a foreshadowing to Flint – or even with Flint overtones. The fact is, EMs can work if the right EM leader is chosen and is willing to work with a collaborative spirit- to the extent that is possible.
So how did Michigan get to the point where we now need (at least for the time being) no EMs? There are several reasons, including support staff at the state level. But we believe the threat of an EM may have spawned more action on the part of local government units to act with greater urgency to resolve their financial problems at the local level before the state needed to intervene. There’s another issue at play here, though, and we speak from first-hand experience and authority when we say that cities and school districts are embracing software and other technological advances that allow them to work smarter and more efficiently as they grapple with dwindling resources and an aging workforce.
They are using financial and operational analytical budget and planning tools that highlight trouble spots years in advance to thwart off what could otherwise be a full-blown, EM-worthy financial crisis. They are implementing systems that surpass the capabilities of Excel spreadsheets to transition responsibilities from retiring financial and HR veterans to the next generation of local government professionals. Overall, the executives at the city and school level are showing their impressive capacity to lead during challenging times, to adopt creative approaches to resolving issues, and to rally their staff around mutually agreed-upon goals that best serve their constituent populations. We salute them.
Bob Kittle is the president and co-founder of Munetrix, a longstanding member of the Auburn Hills City Council and a State of Michigan vetted Local Unit of Government Financial Advisor.
Katrina Powell is the vice president of municipal services at Munetrix. In addition to serving as Hamtramck city manager, she has also served in local government since 2001, including city manager and city management positions in Florida.
