Wednesday, December 28, 2011

State-appointed emergency managers make six figures at local community's expense
Tuesday, December 27, 2011 by Kristin Longley

FLINT, Michigan — Cash-strapped communities and school districts in Michigan are paying six-figure salaries to the governor-appointed emergency managers who are supposed to rescue them from financial ruin.

By law, the pay of Michigan’s five emergency managers — ranging from $132,000 to $250,000 — is set by the state, but the money actually is paid by the local communities they’re in charge of.

That rankles those who disagree with the law in the first place, saying the expanded powers of emergency managers go too far.

“What is the proper salary of a dictator?” asked Flint resident Paul Jordan, one of many Michigan residents who has sued the state, saying the emergency manager law overreaches. “Certainly it’s a very big job. But on the other hand, here the people who are paying his salary had no opportunity to hire him.”

Flint’s emergency manager, Michael Brown, is paid $170,000 a year, according to his contract. Managers in Ecorse and Benton Harbor each make $132,000, while the manager in Pontiac receives $150,000.

The chief of Detroit School District, Roy Roberts, was given a $250,000 salary, but took the 10 percent pay cut he ordered for all school employees.

Brown was appointed Dec. 1 to take over Flint’s finances. A state review panel recommended a takeover after finding a structural deficit, recurring cash flow shortages and other financial deficiencies.

The city ended the 2010 budget year with an estimated $15 million deficit. A $7 million deficit is projected for budget year 2011.
Michigan's emergency managers

* Michael Brown, Flint
Appointed: Dec. 1, 2011
Salary: $170,000

* Roy Roberts, Detroit School District
Appointed: May 2011
Salary: $250,000

* Joseph Harris, Benton Harbor
Appointed: April 2010
Salary: $132,000

* Joyce A. Parker, Ecorse
Appointed: October 2009
Salary: $132,000

* Louis Schimmel, Pontiac
Appointed: October
Salary: $150,000

Source: Michigan Treasury

Mayor Dayne Walling’s was Flint’s highest-paid elected official, receiving $91,800 before Brown eliminated his pay and benefits and those of city council members.

Brown on Tuesday partially restored Walling’s pay to $55,000 and council members each will receive $7,000 a year.

“We can’t afford to get the things done we need to do, how can we pay (an emergency manager)?,” said Bishop Bernadel Jefferson, pastor of Faith Deliverance Center in Flint. “The state brought him in but we got to pay for it? The state should pay some.”

Emergency managers got more power in March when the state law was amended, but the part that dictates local communities pay their salaries dates back to the original 1990 statute.

It has been tweaked to have the state treasurer set the emergency manager pay, rather than a board of state officials.

The compensation takes into account the community’s population, geographic size and the complexity of the financial problems, said treasury spokesman Terry Stanton.

Any expenses the emergency manager incurs are also overseen by the state treasury and are required by law to be publicly posted online, he said.

Brown’s salary in Flint is the highest of any of the managers appointed to run cities. Flint, with more than 100,000 people, is also the largest city under a state takeover.

Brown’s pay is comparable to that of Detroit Mayor Dave Bing. The mayor of Michigan’s largest city reduced his pay to $158,558 from $176,000 after ordering furlough days for other city employees, according to The Detroit News.

State Rep. Woodrow Stanley, D-Flint, said emergency manager pay should be commensurate with the mayor’s pay. Stanley, a former Flint mayor, said he’s opposed to the emergency manager law in general because it interferes with voters’ rights to choose their leaders.

“I’ve never been a proponent of what appears to be exorbitant pay,” he said. “I’m sure if the state was required to pick up the tab for some of these expenses, the state would less prone to intervene.”

But a government finance expert and Michigan State University professor who has helped train emergency managers in Michigan said the managers are paid more because they often fulfill the duties of several people or departments.

“People need to think of it as a city-manager-plus,” said Eric Scorsone. “It’s what a city administrator would do, but with the responsibilities of a mayor and the responsibilities of a city council.

“It’s a pretty big job, really unusual in the scope.”

Emergency managers make decisions regarding most city operations, including finances, infrastructure and public safety, Scorsone said.

“And let’s be honest, it’s a temporary job,” Scorsone said. “An emergency manager may be in office a year or two and then that’s it. It’s a high-profile job with responsibility.”

Flint’s former emergency manager Ed Kurtz, who served during the previous 2002-04 state takeover, originally turned down the state-recommended $114,000-a-year salary in favor of $1,000 a month, according to Flint Journal files. He started taking $3,000-a-month salary in 2003, files show.

Brown said he took a pay cut to become Flint’s emergency manager. He was paid $160,000 as president of the Prima Civitas Foundation, an East Lansing-based nonprofit that focuses on economic development, but also received a retirement package he doesn’t get as emergency manager.

Brown said he expects to put in long hours and be on call 24 hours a day in the Flint job.

“I’m going in to this to do a public service,” he said. “I’m going to earn my salary. I know how challenging and tough it’s going to be."