By Charles Sercombe
The possibility of applying for an emergency state loan is not totally off the table for Hamtramck.
The City Council held a heated debate over the merits and wisdom of applying for a loan at Tuesday’s council meeting (see City Hall Insider on page 2 for more details). That one-hour discussion didn’t yield any results, but the debate isn’t over ‘till it’s over, as they say in baseball.
The council will take up the subject again in a special meeting this coming Wednesday (Feb. 18), at 7 p.m. in City Hall. No one is making surefire predictions, but there is a chance that a swing vote (Councilmember Cathie Gordon?) could lead to a tie, which will then allow Mayor Karen Majewski to cast the tie-breaking vote.
Majewski has spoken passionately in favor of applying for a loan.
The city is facing payless paydays by the end of March, and if it doesn’t secure a state loan it won’t be able to pay any bills for the months to come. That situation could force an immediate state-appointment of an emergency financial manager, state Treasury Department officials told The Review in previous interviews.
Just what a state takeover would entail for Hamtramck is the source of much speculation. Gov. Rick Snyder, a Republican who is newly elected and is an outsider to party politics, has urged cities and public school districts to merge services.
Just what that means, exactly, is not yet certain either.
But the talk in Lansing political circles is that major changes to the law that allows the state to send in an emergency financial manager – Act 72 – are about to be made. Remember, too, the state legislature now consists of a majority of Republicans, a political party that is often on the side of management and privatizing the public workforce.
Hamtramck City Attorney James Allen said he has seen several different proposals on amendments to the Act 72 law, but he said there is one that sticks out.
“Draconian,” is the word he used to described it.
That proposal calls for the ousting of all elected officials once an emergency financial manager takes over and also bars those elected officials from holding public office for five years after the manager leaves.
For a town that loves to follow local politics, that would mean no council meetings would be held. Whatever the financial manager does would remain out of public view.
But that’s just one proposal, and there is no saying it would receive legislative support. Yet, it does illustrate which way the political winds are blowing in Lansing as the state prepares for an expected slew of cities and municipalities to become financially insolvent.
Heck, even the state might face bankruptcy because of a $1.8 billion budget deficit.
Gov. Snyder has not been specific on what he proposes to do about the state’s financial crisis, other than to say the state needs to “reinvent” itself. Oh yeah, he’s also said that public employees need to take wage and benefit cuts.
So … how does this bode for Hamtramck?
So far, state Treasury Department officials are puzzled – to say the least — over why Hamtramck City Councilmembers – or at least a majority of them – are rejecting an offer of a state loan to see the city through another year while it irons out its financial problems, said City Manager Bill Cooper.
So, what solutions are there for this growing financial crisis?
City Attorney Allen has a guest opinion column – called an “Op-Ed” in the newspaper business – coming out in the Detroit News within the next two weeks that addresses this issue.
“I know I’m not the most popular guy in town,” he told The Review in a recent discussion on the city’s finances and the political climate in Lansing.
Allen has often been the target of some councilmembers and public government watchdogs for being a financial drain on the city. And, in the eyes of some city public employees, a foe in the ring of union labor grievances and contract negotiations.
So, will Jim’s popularity rise or fall? Stay tuned?