By Charles Sercombe
If the city manager’s position is not filled by the time her contract expires in June, there could be a hefty cost to the city.
That was the warning at Tuesday’s Receivership Transition Advisory Board (RTAB) meeting.
Debra Roberts, the Chairman of the Board, read a note from the state Treasury Department reminding the city council that it has a $2 million emergency loan from the state.
That loan comes with a stipulation, Roberts said. Unless the city employs a “full-time, professional administrator,” there could be an increase in the loan’s interest rate and also an earlier due date.
Mark Stema, a member of the RTAB and a city resident, said an interim or acting city manager does not qualify as a full-time administrator.
The loan, which was secured by the city’s former emergency manager, is scheduled to be paid back by 2024.
In February, a bare majority of the city council rejected a resolution to have the city attorney begin contract negotiations with City Manager Katrina Powell. Instead, the council is seeking to hire a company to conduct a search.
Typically it takes about four months for a search to be completed. The request for bids from search companies has not yet been made public.
The RTAB would have to agree to any contract for a search firm, and could conceivably reject it. At this point it looks unlikely that the council will have a full-time city manager in place by the time Powell’s contract expires.
Powell’s contract is for two-and-a-half years. She was hired over two years ago by former Emergency Manager Cathy Square, who invited the council to give their input on several candidates vying for the job.
The council gave a thumbs up to hiring Powell, but not long after taking the job some on council butted heads with her. Councilmember Anam Miah has been the most vocal critic of Powell.
Miah and Councilmembers Mohammed Hassan, Abu Musa and Saad Almasmari voted against contract negotiations with Powell, but that vote had some confusing moments.
Before the vote Almasmari said he had been pleased with Powell’s job.
Councilmember Hassan shrugged his shoulders and said he rejected contract negotiations just to see what the RTAB would do next.
There has been speculation that the RTAB might overstep the council and extend Powell’s contract, but there has been no such action taken.
At Tuesday’s meeting RTAB Chairman Roberts noted that the council had “backed itself into a corner” by rejecting contract negotiations with Powell.
The council could still take that action, but it would require one of the councilmembers who voted against the resolution seeking contract negotiations with Powell to bring back the proposal.
At Tuesday’s council meeting, held after the RTAB meeting, Powell read the noted from the Treasury Department. Both Miah and Hassan were absent from the meeting. Councilmembers Almasmari and Musa did not comment on the warning.
The city could pay back the $2 million loan from its budget surplus. But with pension costs requiring an additional $200,000 to $300,000 each year, the city would soon fall into deficit spending.
That could then cause another financial crisis requiring state intervention. Hamtramck has twice required a state-appointed emergency manager in the last 15 years.