UPDATE: The state-appointed Receivership Transition Advisory Board unanimously voted to follow the state Treasury Department’s recommendation and end its oversight of the city’s finances. The process of returning local control to the city will now begin.
By Charles Sercombe
Hamtramck will know on Tuesday (Feb. 27) if the state will end its oversight of the city’s finances.
The state-appointed Receivership Transition Advisory Board will consider a recommendation from the state Treasury Department for the board to dissolve and allow the state to begin the process of returning local control to the city.
“Since the appointment of the RTAB, the City of Hamtramck has increased operational efficiencies and improved its financial stability. The Mayor and members of the City Council are experienced officials, and the appointment of an Acting City Manager is providing stable and solid administrative leadership,” said Eric Scorsone, Deputy State Treasurer. in a memo to the RTAB.
Scorsone went on to say:
“Sound financial management is being practiced by the new City Controller and improvements to the City’s internal financial management policies and practices are underway.
“The City’s 2017 audit was submitted timely and without issue and shows that the City ended its 2017 fiscal year with a General Fund balance of $6.5million.
“Given the city’s operational and fiscal position, continued receivership for the city is not justified.”
The RTAB has been in place for about three years. Its role was limited to overseeing financial expenditures and contracts.
According to a source familiar with the situation, state officials have given up on trying to change the political culture and behavior of elected officials. Hamtramck has long been known for its political divisions and warring factions.
The state cited that behavior as a reason for why the city couldn’t balance its budget for a number of years.
“They feel it’s hopeless,” the source said about the city’s ongoing political battles and divisions.
The source said a latest example of city officials not getting along was the recent vote by a bare majority to not hire a city manager candidate who had 37 years of experience.
That candidate was Stephen Duchane, a former city manager for Sterling Heights and Eastpointe.
Before the vote was taken two councilmembers, Ian Perrotta and Andrea Karpinski, and Mayor Karen Majewski walked out of the meeting. Councilmember Perrotta, however quickly returned in time for the vote and was the lone vote to hire Duchane.
Majewski returned to the meeting after the vote, but Karpinski did not.
After the state decided to intervene five years ago, it appointed an emergency manager, but that manager, Cathy Square, did not tackle the biggest financial challenge: Coming up with a way to meet increasing pension costs.
That problem was kicked over to state consultants after Square left and a state-appointed city manager was hired. Those consultants also could not come up with a way to solve the problem.
It was predicted that Hamtramck would find itself in another financial crisis in five years if pension costs could not come under control.
Hamtramck is not alone. Many municipalities are facing the same financial dilemma. State legislators have also attempted to solve the problem without luck.
During the three years the RTAB was in place, the city was tasked with accomplishing a number of final directives, set down by the EM. It was not immediately known how many of those directives were completed by City Manager Katrina Powell.
In another point of contention among councilmembers, Powell’s employment contract was not extended, and she left at the end of last June. That was another issue that pitted Councilmembers Perrotta and Karpinski, as well as Mayor Majewski, against a bare majority of councilmembers who did not want Powell to continue.
Acting City Manager Kathy Angerer, a former department head, was hired by yet again a turbulent process among city councilmembers. Angerer said that with help of state officials she has been tackling the directives since taking over management of the city last July.
In a memo that Angerer sent to department heads on Monday (Feb. 26), Angerer thanked them for their help.
“Regardless of the outcome of tomorrow’s meeting, you are to be commended for your part in helping to move Hamtramck forward. It is because of strong policy from Mayor and Council and implementation of a good day-to-day budget and plan along with YOU — great employees — that we are moving forward,” Angerer said.