Gov. Rick Snyder: Local control returning after financial emergency resolved in Lincoln Park

Coulter Head Shot

For the first time in 15 years, state has no municipal emergency managers

Tuesday, December 22, 2015     

LANSING, Mich. – Gov. Rick Snyder today accepted emergency manager Brad Coulter’s recommendation that the financial emergency in Lincoln Park has been resolved. For the first time in 15 years, no Michigan city is being overseen by an emergency manager.

Snyder also appointed a Receivership Transition Advisory Board to ensure a smooth transition to local control and continued financial stability for the city. A solid financial foundation will help the city provide residents with better services and improved quality of life.

“This is a great day, not only for the city of Lincoln Park but for the entire State of Michigan,” Snyder said. “Brad has provided a shining example of how the system can work; first, collaborating with local leaders to address the city’s financial emergency, then working to enhance economic development to help ensure continued financial stability for Lincoln Park.”

Three Michigan cities – Benton Harbor, Ecorse, and Pontiac – and the Detroit Public Schools were overseen by emergency managers when Snyder took office in 2011. As of today, there are no municipalities and three school districts -- Detroit, Muskegon Heights and Highland Park – operating under state oversight.

Coulter on Monday notified the governor of his determination that the city’s financial emergency had been sufficiently addressed. In his letter, Coulter outlined critical changes in Lincoln Park since a financial emergency was declared in July 2014.

  • The city’s General Fund deficit, which stood at more than $1 million in June 2014, has been eliminated. The unassigned General Fund balance now stands at a positive $186,901.
  • Retiree health care costs have been reduced from $4.3 million to $600,000 annually. A large portion of the savings -- $3 million -- is helping to fund the city’s pension system.
  • Through negotiations with its health care provider, the city realized annual savings of more than $200,000, starting in this fiscal year. In addition, the city is receiving a one-time rebate of $221,000.
  • A renegotiated firefighter contract has reduced overtime costs from $600,000 annually to a budgeted $50,000.

Coulter has set in place a two-year budget and issued his final order as emergency manager this morning. The order includes full salary restoration for the mayor and city council and outlines roles and responsibilities of elected officials, including their collaboration and cooperation with the Receivership Transition Advisory Board appointed today by Snyder.

RTAB members include; Kevin Bonds, assistant director of the State Finance Division within the Department of Treasury (state treasurer designee); John Zech, former Wayne city manager (Department of Technology, Management and budget director designee); Genelle Allen, assistant Wayne County executive (representing persons with relevant professional experience), Jessica Thomas, independent consultant for distressed local governments (representing people with relevant professional experience); and, Brendan Dunleavy, former Wayne County auditor general (representing people with relevant professional experience).

“I am pleased to appoint such a distinguished group of individuals to this board,” Snyder said. “Each brings extensive experience in local government and municipal finance and will work closely with city officials to ensure continued fiscal health in Lincoln Park.”

Mr. Coulter and representatives from the Department of Treasury will hold a media conference call with reporters at 2:00 p.m. today. To participate in the conference call, credentialed members of the media should call the Department of Treasury Communications Office at 517-335-2167 for call-in information or contact Terry Stanton or Jeremy Sampson via e-mail (stantont@michigan.gov or sampsonj@michigan.gov).

For more information about Public Act 436 of 2012, the Local Financial Stability and Choice Act, visit the Local Government Fiscal Health page on the Department of Treasury’s web site at www.michigan.gov/treasury.

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Related Documents
FinancialEmergenciesGraph PDF icon
LincolnParkLetter PDF icon