Sunday, March 21, 2010

Granholm imposes an unnecessary financial takover of Benton Harbor, Michigan

BH City Manager Ron Carter: If the state could grant us $5 million Fiscal Stabilization Bond, it would solve our problems right away.

State Treasurer Robert J. Kleine: We could do that.

The statements above were made during a meeting held in the Austin Bldg. in Lansing on March 17, 2010 at 10am. The state was forced to meet after the BH city commission appealed Granholm's takeover decision. An "emergency manager" would have the powers to
hire and fire, renegotiate labor contracts, and sell property.

Presiding over the meeting was State Secy. of the Treasury, Robert J. Kleine. He sat alone in front facing about 50 people. In the front row were the state financial people; on the other side of an aisle were Benton Harbor Mayor Cooke and City Manager Ron Carter (formerly of the Lakers NBA b-ball team).

The state talked about the many mistakes BH has made over the years, all before Mr. Carter became City Mngr. I didn't find out until after the meeting that the long list only added up to $4.1 million Benton Harbor is in the red for. Not much for a municipality. One person jokingly suggested that benefit concerts could take care of that amount.

One might wonder why a governor who offers little to no leadership within the state would suddenly take over a city which has been in deep poverty for many years because of being only 4 million in debt?

Ron Carter took his turn and was impressive in his clarity and logic laying out the state of financial affairs in BH. He talked about a 62 point plan to remedy the problems, admitting that time and money were needed for some of the fixes. Carter has
identified these specifics:

1. Benton Charter Township is on their way to developing a new water plant. Carter wouldn’t try to prevent this, but suggests some ways BH could cooperate resulting in a win-win for both municipalities:

--Negotiate regarding shared capacity of water.
Water intake is expensive; BH has it and could provide for both.

--BH already has pumping stations and could share with Benton Charter Township.

--There could be cooperation on billing, meter reading, and customer service, all of which would cut expenses for both municipalities.

2. Union contracts (collective bargaining)

--BH contracts have expired. Current contracts contain terms and conditions that make the city pay more in overtime than it can afford. Labor costs could be cut, but the current contract doesn’t allow this.

3. Police and Firefighter Pension Funds, and General Pension Fund

--Fund performance has not been good for 2 or 3 years. The Fund board should consider hiring a new manager.

--The city has to figure out how to make pension fund contributions as required.

The state spoke again about why they need to move in and run Benton Harbor. Mr. Carter competently explained things in finer detail, and it seemed obvious everytime he spoke that nothing was needed for Benton Harbor but to let him do his job. Notable was his humility when uttering phrases such as, "I could be wrong, but..." Personally, I would choose him to over the state financial rep.

Carter said he didn't want to spend the next month working at these solutions only to find that the state will undo his work.

Mayor Cooke said that the main question citizens and elected officials have is if a state emergency manager would sell Benton Harbor's most valuable assets, such as its water plant. Kleine replied that would happen only if it made sound financial sense...

If the state of Michigan was in this to help, they'd save a lot of money and trouble by simply offering financial aid to the poorest community in Michigan.

After the meeting I heard a woman asking Secy. of the Treas. Kleine that if he must go into BH to use a word other than "takeover." For a city that's lost their livelihood and been beaten down by their former employer and corrupt cops and judges, they need to be built up. The word "takeover" will just heighten their sense of demoraliztion. And, it's abundantly clear that all BH needs now is a bit of "assistance."

Several people I spoke with said that Whirlpool has always orchestrated the chaos, financial and otherwise, which has characterized BH city government. Hopefully, this bully corporation will never again have this opportunity.

Benton Harbor has been in financial straits for decades - why does Gov. Granholm choose now to intervene? It couldn't possibly have anything to do with the new city commission not giving Whirlpool what they water and MORE land?

(It appears that the new HP reporter, Evan Goodenow, is trying his best to be objective, but his editor is trying his best to mold Goodenow into a good WP company man.)