By Charles Sercombe
It’s official: A state review team will look into Hamtramck’s financial situation.
Hmmmm … sound familiar?
Indeed. Last fall city officials requested a state review of finances when the city’s financial condition continued to worsen. That “preliminary” review, however, was just the first step toward a review team being appointed to once again look into the city’s finances.
This time around, there is a deadline for action to take place. The five-member review team has 60 days to report back to the governor and make a recommendation on what action to take.
If needed, the team can take an additional 30 days to wrap up the review, but it’s likely that won’t be necessary.
“We have already met with the state treasurer himself, and he is very aware of the situation,” said Acting City Manager Kyle Tertzag. “I do not anticipate the review team will need all 60 days.”
Some of the preliminary findings that prompted the appointment of a review team include the city passing a budget that basically spent more than what it took in, and the fact that the city fell behind on pension payments by $2 million in order to pay bills and meet city employee payroll.
It’s highly likely that an emergency manager will be appointed.
Hamtramck is no stranger to having a state-appointed financial manager take over. Back in 2001, the state stepped in and appointed Louis Schimmel as emergency financial manager.
He left the city in 2007 when it was deemed the city was back on track, and indeed within two years after that the city boasted of a balanced budget and the establishment of a rainy day fund that eventually amounted to $2 million.
But the 2008 economic crash and housing collapse conspired to undermine the city’s financial turnaround. Adding in the loss of American Axle jobs and rising health care costs for city employees, the city soon found itself in deficit spending through no fault of its own.
Since that time there have been significant changes in the emergency manager law. Back when Schimmel was here, his hands were tied in making changes to employee union contracts.
That’s not the case now, although the state’s new emergency manager law has yet to be tested in court.
But if the law remains intact, an emergency manager will be able to tear up union contracts and renegotiate them.
If an emergency manager is appointed, Hamtramck will not be alone. Emergency managers are now in charge of six cities, most notably Detroit, and three public school districts.
Schimmel has remained busy in the emergency manager business, having been in Pontiac for the past few years. He is scheduled to leave his post in June, which has prompted rumors in town that he will be coming back here.
And that prompts us to quote a song from the great Ray Charles:
“Hit the road, Jack and don’t you come back
No more, no more, no more, no more
Hit the road, Jack and don’t you come back no more
What you say”