Thursday, April 01, 2010

Michigan's recent history of state financial takeovers is more than discouraging. Under Gov. Granholm, Hamtramck, Highland Park, and Pontiac all experienced takeovers where the financial managers harbored hidden agendas involving embezzlement. In Highland Park, for example, the city eventually got the gov. to remove two of these people; the replacement, Mr. Blackwell is currently on trial for stealing $300,000.00; Blackwell's replacement, Mr. Cooper was recently caught having written a $13,000.00 check to himself. A cynic might wonder why the gov. continues to appoint people with criminal intentions to conduct her takeovers.

The following article includes commentary clarifying some important points reported by the Herald Palladium in "Whirlpool fashion." It's not an exaggeration to say there exists a "Berrien County state of mind," instilled through many decades by the corporation. Exceptions, of course, can be found, but the Herald Palladium is not one of them. In fact, the HP might be Whirlpool's most important propaganda tool.

TAKEOVER (with commentary)

Governor approves state manager to take control of Benton Harbor's finances

By Evan Goodenow, H-P
March 26

BENTON HARBOR - Years of money mismanagement and last week's inability to make payroll led Gov. Jennifer M. Granholm on Thursday to reject Benton Harbor's appeal of a takeover by a state emergency financial manager.

COMMENT: More than enough money was available for payroll. This is just one excuse the gov. is using to justify a takeover.

"A local government financial emergency exists in the city of Benton Harbor because no satisfactory plan exists to resolve a serious financial problem," Granholm wrote in a letter to Mayor Wilce L. Cooke. "The fact that Benton Harbor city officials were confronted by the imminent risk of payless paydays a mere two days after the city's (appeal) hearing is the latest indication of a financial emergency in the city which city officials do not appear to have the ability to address without outside assistance."

COMMENT: City mngr. Ron Carter and a majority of city commissioners have made it clear they have the ability to address all financial issues, and that the state need only provide a 5 million dollar loan. (A drop in the bucket to aid a municipality.)

The rejection comes after Granholm's Feb. 26 declaration of a financial emergency in Benton Harbor. The declaration was in response to a Jan. 27 report to Granholm by a state financial review team.

Granholm outlined the team's findings in her letter:
-- A 13.1 percent increase in the city's general fund deficit for the 2008-2009 fiscal year.
-- Eight years of tardy audit reports to the state Department of Treasury.
-- A steep decline in the city's money on hand from $1.7 million in 2006 to $315,000 last year.
-- An inability to make minimum contributions to city worker pension funds.
-- Annual bank overdraft charges of $80,000 to $100,000.

City Manager Ronald Carter Jr., appointed Dec. 28 after about two months as a consultant, contends a takeover is unnecessary due to his financial recovery plan and reforms made in response to the team's findings. However, Carter never challenged the majority of the findings at the March 17 appeal hearing. Granholm noted Carter's comments in her letter.

COMMENT: At the appeal hearing Carter may not have challenged findings, but he explained that he works daily on a 62 point plan to make the city solvent. What's important is that the takeover is unnecessary, that Carter's plan is being implemented, and that the governor's not-so-hidden agenda is to help Whirlpool take even more BH lakefront land for the massive Harbor Shores development.

"I find them to be an honest assessment of what has transpired," Carter said at the hearing. "I do believe that a financial manager is a prudent next step for the city of Benton Harbor."

The emergency manager will be appointed by the Local Emergency Financial Assistance Loan Board, which consists of State Treasurer Robert J. Kleine, State Budget Director Bob Emerson and Department of Energy Labor & Economic Growth Director Stanley "Skip" Pruss. The board is expected to meet next week, and an emergency manager is likely to be on board in mid-April, according to Terry Stanton, a treasury department spokesman.

COMMENT: We can all say goodbye to Benton Harbor High School, the Water Dept., lakefront property, the beach, downtown, and goodbye Benton Harbor.

The emergency manager will have sweeping powers, including the right to hire and fire, renegotiate labor contracts and sell properties. But until the manager takes over, Carter, Mayor Cooke and city commissioners have full autonomy, Stanton said.

"I'm not saying (Carter has) tacit approval to do whatever he wants, but there's no requirements beyond what an individual in his position normally does," Stanton said.

Carter, Cooke and Commissioners Juanita Henry, Dennis Knowles and Marcus Muhammad didn't return calls for comment Thursday, and Commissioner Eddie Marshall refused to comment. Commissioner Duane L. Seats II, who took office in January along with Knowles and Muhammad, expressed frustration that the new commissioners and Carter weren't given more time to reform Benton Harbor.

The city has a $4.1 million overall deficit and has had decades of high poverty, unemployment and political turmoil.

COMMENT: Small deficit for a municipality which the gov. could easily grant a loan for. Whirlpool and the state owe at least that much to Benton Harbor for many years of
many injustices.

Seats said he hopes the emergency manager takes the ideas of Carter and commissioners seriously "with the goal of a clean, safe, stable city."

COMMENT: Good point. However, if the state took Carter/commissioners seriously, there would be no takeover.

Noting Michigan's projected $1.5 billion shortfall for the next fiscal year, Seats accused state officials of hypocrisy.

"It's like a cocaine addict telling someone smoking cigarettes they're in bad shape," he said. "How can they tell us we're in bad shape when they're in financial chaos?"

However, unlike the federal government and Benton Harbor, states are legally forbidden from running deficits, meaning Michigan has been forced in recent years to cut services and workers. If those difficult decisions need to be made in Benton Harbor, city commissioners need to support them, said Commissioner Bryan Joseph, a takeover supporter.

COMMENT: Joseph is aligned with Whirlpool.

"It's obvious we need help, and we can't afford to fight this," said Joseph, who blames the city's financial woes on Cooke and some current and previous commissioners. "The sooner we embrace the emergency manager the sooner we can get on the road to recovery."

COMMENT: Joseph knows BH residents will never support a takeover.

Joseph and Commissioner James Hightower both urged Carter and the commissioners not to make any major moves until the emergency manager takes over. Both said the city can't afford to pay both an emergency manager and Carter, who earns $95,000 annually.

COMMENT: Outrageous. A competent city manager may get fired? For a financial mngr. who, if Michigan's takeover history tells us anything, may move in to write huge checks to her(him)self and/or take lakefront land for Whirlpool.

"I don't feel we'll need a city manager," Hightower said.

Commissioner David Shaw said he supports the takeover but wonders what the emergency manager's deficit elimination plan will be.

"Is he (or she) going to bring in new ways to bring in revenue or is the plan to sell off the assets of the city?" Shaw asked. "How long will it take, and will they include the commission in decision-making?"