By Charles Sercombe
At least one councilmember is not concerned about having to pay back a $2 million emergency state loan if the city fails to employ a full-time city manager.
Recently, the state-appointed Receivership Transition Advisory Board warned city officials that unless a full-time, profession city manager is in place after June 30, the state could impose a higher interest on the loan, or even call in the loan early.
City Manager Katrina Powell’s contract expires June 30. The state loan is scheduled to be paid back in 2024. The interest rate on the loan is 2 percent.
Councilmember Anam Miah has led the charge to replace Powell, and apparently has the backing of Councilmembers Abu Musa, Saad Almasmari and Mohammed Hassan.
They constitute a bare majority on council, and they previously rejected a resolution to have the city attorney negotiate a contract extension with Powell.
Miah said he has no problem with paying back the state loan earlier than usual, and stressed that he has been advocating to do that for the past few months.
“Why would you want to extend the payment for another 20 years?” said Miah. “When you have money they find ways to spend it.”
The city has a $2-3 million budget surplus, but it will be paying an extra $200,000 to $300,000 per year on rising pension payments.
Miah further blasted Powell, calling her “incompetent.”
See article below for Powell’s response.
Miah said that Powell has failed to solve the city’s pension financial obligation despite being on the job for over two years. He said she has also allowed employment contracts for police officers and firefighters to remain expired for almost one year, and has not kept the council informed about the hiring of department heads and others.
He also lashed out at Powell for taking more than a week to seek bids for a company to conduct a search for a city manager – which was a council resolution directing her to do so and was approved by the RTAB last week.
“She’s hindering the city from moving forward,” Miah said. “And you want to keep this administration around? No sir.”
City Manager responds to Councilmember Anam Miah
The following is City Manager Katrina Powell’s response to Councilmember Anam Miah’s criticisms of her management skills (see front page story):
“It is unfortunate that Councilman Miah does not understand the ramifications of financially reckless decisions, such as suggesting the City should pay off an over $2 million loan with a 2% interest rate that isn’t due to mature until 2024.
“While Councilman Miah may not understand the consequences of the State Treasurer’s statement, the Department of Treasury completely understands that if the loan is called for early, it could send the city right back into an emergency status and allow use of all of the laws afforded the state in dealing with such an issue, i.e. PA 436.
“The city’s pension problems were incurred through years of mismanagement and ‘giveaways’ to the employees through multiple Bargaining Unit Contracts, and cannot be solved at this point.
“The State of Michigan hired a consultant to assist the City with its CLOSED group pension issues, and the report was issued about a year ago, which states: ‘The largest City contributions to MERS are due on behalf of divisions that have no options to cut costs. The Divisions where changes can be made are well funded and require modest contributions. In addition, recent changes were made to move new hires in Police, Fire and AFSCME to lower cost arrangements within MERS.’
“The rest are either fully funded or partially funded (ACTIVE EMPLOYEES). If it were a simple fix, every community in Michigan with pension underfunding and unpaid debts to MERS would have figured it out and we would not be working on writing legislation to address it. The majority of the cities in Michigan have the same issues Hamtramck has, and are trying to find ways to fix them. Does Miah have a suggestion on how it can be fixed?
“The four (4) Bargaining Union Contracts, which were negotiated by the Emergency Manager prior to her exit, expired at different times; one of which, the AFSCME contract was from March 19,2015 to November 12, 2015, and was signed by me on March 19, 2015, just three (3) months after I started with the city.
“As such, I would not have negotiated that contract or any contracts until I had a handle on the city’s expenses moving forward. The Fire Department and I have been meeting since before the expiration of their contract, which expired in June 2016, however, we needed to wait to see if we received the SAFER grant and to see if the city could afford to provide additional benefits than it currently provides to the employees, all of which are just now coming to fruition.
“The Police contract negotiations also needed to be put on hold because of the mandatory Police Study that had to be completed and implemented per the EM’s Final Orders. Since the previous Police Chief nor the EM sent over a contract to the company that was ‘selected’ to provide the study, per the EM’s final order, and as such that company was booked out for more than a year, the State required us to go out to bid for a company.
“The report was just finalized late last month. It is a very complicated report which will require us to completely revamp the entire Police Department and its operations, all of which will need to be addressed in the Bargaining Contract.
“Unlike private company union contracts, Public Union Contracts have clauses which state the following: ‘In the event negotiations extend beyond the expiration date of this agreement, terms and provisions of this agreement shall remain in full force and effect pending agreement on a new contract.’
“The RTAB just approved the Executive Search Resolution last Tuesday afternoon; Wednesday morning I asked the City’s Purchasing Agent to prepare an RFP to post on MITN. As has been the law for the past two years, nothing moves forward until all Resolutions, Contracts, Personnel actions, etc., are either approved or denied by the RTAB. Therefore, I would not have used valuable staff time to prepare something that hadn’t been approved yet.
“Per EM’s S-17 6.(E) and S-20 4. (b) 6. The City Manager is not required to get approval from or involve the City Council in interviewing or in the selection of a Department Director. The EM’s final order S-20 4. (a) 17 States that the Mayor and City Council shall confer with the City Manager on the City Manager’s selection of Department Directors.
“As such, after the appointment of the Chief of Police, in which I did not ‘confer’ with the Council, I conferred with them on every appointment except the Fire Chief, as the majority was late for the work session before the Council Meeting and all walked out of the Council Meeting before the City Manager comments, therefore I was unable to confer with them on that appointment.
“My team and I work daily to ensure every decision we make is well thought out and calculated, so that we don’t create future issues for those who come after us. It is disheartening for everyone employed with the city to know that our hard work and dedication are not appreciated by some of those who are elected to represent this community.
“However, we will continue to work hard in cleaning up the mess we inherited and make honest, impartial and the best decisions we know how to make, until we are no longer here to make them.”