Snyder unveils special message to the Legislature on local government reform

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Contact: Sara Wurfelwurfels@michigan.gov 

Snyder announced in his State of the State address that he will share with lawmakers a series of special messages that offer bold solutions to challenges confronting Michigan. Today’s message focuses on community development and local government reforms.

“Local officials deserve credit for continually finding ways to make effective use of their limited resources,” Snyder said. “However, antiquated laws often discourage them from taking broader steps such as consolidating or sharing services with neighboring communities. It is time that we view both challenges and solutions in a regional context rather than confining them to township, city and county borders. This special message outlines ways that we can provide communities with options they may wish to pursue in partnership with their employees. It also emphasizes the accountability and transparency that taxpayers expect and deserve. The best practices being put forth are a starting point for discussions in which Michigan must engage. Addressing these issues will strengthen our communities and lead to the reinvention of our state.”

Snyder is asking the Legislature to address specific policy areas that emphasize consolidation and service sharing, accountability and transparency, and controlling compensation costs.  Highlights include:

• Establishing an Economic Vitality Incentive Program to replace the statutory revenue sharing system that was eliminated in the governor’s proposed budget. The incentive program gives municipalities greater encouragement to pursue best practices and serious cost-control measures. Funding in the program’s first year will be available to communities that are expected to receive more than $6,000 annually under the existing revenue sharing system.

  To qualify, eligible municipalities must meet best practices in the categories of accountability and transparency, service consolidation and employee compensation cost controls. These include producing a citizens’ guide to the community’s finances by Oct. 1, 2011, as well as a “dashboard” to measure performance; and addressing employee compensation issues as any new, modified or extended contracts are negotiated.  Municipalities will receive one-third of their funding for each category of best practices that they meet.

• Amending the Public Employment Relations Act so that the consideration of an intergovernmental cooperation agreement by local governments is not considered an unfair labor practice. 

• Adjusting the timing of collective bargaining. Michigan has laws that enable consolidation and cooperation between units of government. However, they include clauses that prevent the immediate negotiation of new contracts. This stands in the way of even the consideration of mergers by local units. The laws should be amended so that upon a merger of services, management and employees immediately begin the collective bargaining process for the new entity, and complete it within an appropriate time.

• Reforming binding arbitration for public safety workers so that a community’s ability to pay is a fundamental factor in an arbitrator’s decision.  Also, internal salary and benefit comparisons should be considered by an arbitrator. Both sides should be required to submit a last best offer before entering into binding arbitration. The process should take no longer than 90 days.

• Prohibiting any new city, village or county charters from containing minimum employee staffing requirements. The prohibition would apply to new amendments to existing charters as well. Staffing levels should be part of the collective bargaining process.

• Implementing best practices for local pension boards by making them subject to transparency rules and accountability reforms. Pension boards also should have to meet certain requirements that are modeled after Securities and Exchange Commission rules.  There should be a prohibition against the practice known as “pay to play” so that anyone contributing to government officials in a position to influence a pension board’s decision will be prohibited from conducting any business with the board for two years. Also, a financial adviser or anyone acting on their behalf should be prohibited from making or soliciting political contributions to a local or state political party where they wish to conduct business. SEC regulations that apply to the largest organizations should be applied at all levels – including third-party advisers. 

• Amending Public Act 101, which implemented the “Headlee Amendment,” to require that if the state enacts legislation imposing new, costly requirements on local governments without complying with a fiscal note process, such legislation will have no force or effect until compliance with the fiscal note process is achieved.

• Tasking a work group headed by Michigan Economic Development Corp. Director Mike Finney to assess and align the research, planning and development efforts that currently are scattered across the state so there is better coordination.

Snyder said Michigan must become a place where our children can live, work, play and prosper.  State government can enable and encourage, but communities themselves must lead the way.

The entire Special Message on Community Development and Local Government reforms is available at www.michigan.gov/snyder.

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