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Pontiac financial emergency resolved; Governor appoints Transition Advisory Board
August 19, 2013
3LANSING, Mich. – Gov. Rick Snyder today announced that the financial emergency in the city of Pontiac has been resolved and appointed a Transition Advisory Board (TAB) to help ensure a smooth transition and guide the city to continued financial stability.
“I’m pleased to see Pontiac emerge as a financially stable city and return to local control. The Transition Advisory Board will be working cooperatively with local leaders to ensure continued stability and growth on the path ahead as well as improved services to the city’s residents,” Snyder said.
Pontiac Emergency Manager Lou Schimmel notified the governor on Friday of his determination that the city’s financial emergency had been sufficiently addressed. Schimmel cited several factors and accomplishments, including:
- Implementing health care and benefit reforms by consolidating 87 benefit plans into one to ensure quality, affordable but sustainable coverage for employees.
- Selling excess capacity in the city’s sewage treatment plant to Oakland County for $55 million, allowing the city to significantly reduce its debt ($87 million) and eliminate its structural deficit ($9.2 million).
- Creating a regional fire department (merger with Waterford Township) that reduced the cost of fire services by $3.6 million annually while strengthening services.
- Contracting with the Oakland County Sheriff for police services, which saved the city $2.2 million annually while also boosting public safety and ensuring more officers on patrol.
- Reducing general fund expenditures by nearly $30 million in six years by closing defined benefit pension systems, eliminating money-losing enterprise activities, consolidating or streamlining departments, and modifying the city’s hiring process.
Schimmel, who has enacted a two-year budget and issued his final orders as Emergency Manager this week, will continue to be involved in Pontiac as a member of the TAB appointed by the governor, effective today.
“Lou did a commendable job shepherding the city through a difficult process and addressing its fiscal crisis while improving services for Pontiac residents,” Snyder said. “Lou has my thanks for his service and expertise, and I appreciate his willingness to continue his public service by being a member of the Transition Advisory Board.”
“I believe city officials and Pontiac residents alike will benefit from the appointment of this board,” Schimmel said. “We can help facilitate a smooth transition to local control while providing appropriate guidance and oversight.”
Other members of the TAB include Ed Koryzno, administrator of the Department of Treasury’s Office of Financial Responsibility (state treasurer designee), Robert Daddow, Deputy Oakland County Executive (Department of Technology, Management and Budget director designee), and Keith Sawdon, Finance Director for the City of Rochester Hills, representing a member with relevant professional experience.
“The members of this board are well equipped to play an important role in assisting and advising elected and appointed officials going forward,” Snyder said. “The goal of a TAB is to help ensure a responsible financial course is maintained in the months and years ahead.”
Schimmel, city officials, Daddow, and Sawdon will hold a media availability with credentialed members of the media, at 3:30 p.m. today at Pontiac City Hall.
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.