The effects of emergency managers

Eastern Michigan University held the spotlight at the Ypsilanti City Council meeting Tuesday night at the City Hall downtown. Earlier that afternoon, EMU’s Board of Regents had presented the Presidential Award for Community Partnership to Mayor Paul Schreiber, Council Members Michael Bodary and Daniel Vogt and city staff Teresa Gillotti and Stan Kirton in recognition of the City’s role in improving the intersection of Oakwood and Washtenaw on the edge of campus.

Mayor Schreiber read a proclamation honoring WEMU during April Jazz Appreciation Month, a designation made by Congress. Schreiber presented the proclamation to Bob Eccles, a WEMU announcer who hosts “All Things Considered.” Schreiber’s proclamation acknowledged WEMU’s continuous role in highlighting the importance of jazz in America’s historical, musical and cultural heritage. Eccles accepted the honor with appreciation.

Four students from EMU presented the results of their study that focused on the effects of emergency financial managers on communities. Three of the students are economics majors; the fourth is in actuarial studies. Shannon Bankovic reported on what she learned about Benton Harbor, where unemployment rates lowered slightly after the emergency manager. They also studied Pontiac, where unemployment fell below 25 percent. Flint has had two emergency managers in the last decade, and their unemployment rate didn’t fall until 2010 and 2011.

Is there a positive correlation between an emergency manager and unemployment?

Bankovic concluded, “we have no proof of a causal relationship.”

A second student, Elliott Daimler, reported on wage rates. He found that police and firefighter wages in Benton Harbor went up, after the EFM, 2.3 percent adjusted for inflation. They didn’t find a decrease in pay rate under union contracts after an emergency manager took over.

Christy Okpo, another student, looked at whether EFM had the ability to modify housing prices in Pontiac, Flint, Benton Harbor and Ypsilanti. The steep decrease in housing values in the last few years showed in her work: only Benton Harbor saw an increase, of 40 percent, after an EFM. Declines in the other three cities were 20-40 percent, and had a negative impact on tax revenues. She concluded that having an EFM brings a need for strategic planning for both increases and declines.

Andrew Murphy, a third EMU student, collected data on Ypsilanti’s current situation to compare the cities that had EFMs and see whether Ypsilanti is similarly in danger of having an EFM.

He found clear factors the state review team looks to: default in payment of interest or principle of a bond obligation, failure to implement taxes or other ways of generating revenue, failure for more than 30 days to pay compensation to a government worker, liabilities greater than 10 percent of city’s total expenditures and operating with a budget deficit of more than 10 percent.

Murphy found review teams looked for five or more of the listed elements. Ypsilanti is not currently running a deficit; it is only a projection that the Water Street debt could create a deficit in the future. He concluded Ypsilanti is not currently at risk for an EFM, but there is risk down the road.

The students said they had observed population movements but could not identify a reason for it. They also said “just having a deficit doesn’t lead to an EFM,” but if the deficit is not dealt with, it will grow and create other difficulties, as happened in Pontiac, which started with a $4 million deficit and ballooned to $17 million by the time the EFM came in.

Council Member Daniel Vogt asked, “What was the action by the EFM? What changes in infrastructure?”

Okpo said there was a lot of outsourcing: cuts in the fire department and annexing the police function to a neighboring jurisdiction.

Charles Wilson, health educator for the Washtenaw County Department of Public Health, described the Community Health Advocate Program, which has seven collaborative partners focused on Ypsilanti’s Gateway or South Side neighborhood, which has a high percentage of low income residents. The program, housed in the Parkridge Community Center, trains community health advocates.

Wilson said this model might be similar to what will be needed when the Affordable Health Care Act kicks in fully in 2014.

Lee Tooson, vice president of the Ypsilanti-Willow Run Branch of the National Association of the Advancement of Colored People, spoke of the need to retain Amy Walker as Chief of Police. Walker is one of five candidates for Chief of Police at EMU.

“If you want to keep Ypsi healthy, you have to keep Ypsi safe, and Ms. Walker knows how to do that,” he said.

There was also action on the proposed County Recreation Center for the Water Street site on the east side of downtown Ypsilanti: council appointed one person to each of six committees that will provide advice to those planning the building. The Washtenaw County Parks and Recreation Commission is leading the planning process.

Council received, but did not discuss, a “Final Sustainability Plan Updated Report” from the Ypsilanti Housing Commission.

All of the documents considered by the council are available on the City of Ypsilanti website at http://www.cityofypsilanti.com/Government/MayorCityCouncil/MeetingRecords.


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