Emergency manager lays out plan for financial recovery

Emergency Manager Cathy Square presents her financial recovery plan for Hamtramck to the public Wednesday morning. Below: A city retiree asks about pension issues.

By Charles Sercombe

          City Council Chambers is usually a place where some residents come to vent, rant and yell.

          Curiously, that was anything but the case Wednesday morning when Emergency Manager Cathy Square presented her financial recovery plan to the community.

          Packed into the Council Chambers were residents, employees and retirees – all of whom remained calm and quiet throughout Square’s talk. Those who asked questions didn’t raise their voices or berate Square – something city councilmembers don’t often experience.

          The main concern expressed was by community garden organizers who questioned Square’s plan to sell 400 city-owned lots that had been tied up in a housing discrimination lawsuit that recently was settled after 40 years.

          Over a dozen community gardens have sprouted up in scattered lots throughout the city. The biggest plot, called Hamtown Farms, is spread out over nine lots on Lumpkin St.

          The best Square could do to ease concerns is to promise to take each garden case by case.

          Square’s report had been released a week earlier so there were no surprises during her presentation. She said that by the time her employment contract as emergency manager expires next July, the city will have a $1 million surplus.

          In two years, she said, that will grow to $2-1/2 million.

          In her plan, just about everyone will be asked to take a hit.

          First and foremost will be property owners, who will have to pay an extra $150 this year to shore up the city’s pension fund.

          “That’s a way to get out,” Square said in the first step toward financially recovery.

          The city has a $3 million budget deficit. Several months ago, city councilmembers asked the state to step in after they could not come up with a remedy to fix the budget. But to be fair, the council was limited in what it could do.

          For example, the council cannot break labor contracts, which is something an emergency manager can do.

          One of the immediate changes will come from firefighters and police officers who will lose a number of financial perks that will total over $800,000.

          The police and fire departments will also lose five positions in each department, under Square’s plan. Because both departments are already down several men, there won’t be a need to layoff any of the remaining firefighters and police officers.

          That reduction will save $1 million.

          The mayor and city councilmembers are not immune from budget cuts. Their salaries and other expenses will be slashed by a total of $30,000. That means, Square said, councilmembers will be paid a stipend of $50 a meeting.

          “I’m looking at the city globally,” Square said in her plan to spread the cuts. “Everyone shares the burden of the city’s finances.”

          Square is also looking at ways to reduce the city’s cost of providing street lighting. She said DTE will be billing the city $525,000 this year for the service. She said the city has 700 street lights per square mile – way too many to justify the cost.

          “We’re the most lit city in Michigan,” she said.

          City administrative staff can expect a change-up, Square said. Just what that entails, though, was not explained. But without it, Square said, “you’ll get the same results” that lead to a financial crisis.

          But here’s a hint. Square said there are too many people employed by the city and those who remain will “need to do more.”

          Another possible sore point is the number of retired employees who have gone on to take another job, which is permissable. But the rub, said Square, is that if they have the option to take health insurance from their new employers, they are bound by contract to drop the city’s health insurance.

          And if they didn’t do that, she said, they will have to pay back the past years expense of carrying them.

          Square said she is demanding that all retirees submit IRS forms to prove they are dependent on the city’s health coverage.

          Noticeably absent from the meeting were Councilmembers Tom Jankowski, Anam Miah, Abdul Algazali and Mohammed Hassan.

          Councilmember Cathie Gordon, who will be out of office at the end of December, said a lot of what she heard from Square sounded familiar.

          “The majority of that plan came from the council,” she said about past budget discussions.

          Gordon added that she and Councilmember Robert Zwolak will present a resolution at next Tuesday’s council meeting in support of the financial recovery plan.