Years of financial mismanagement and the fact that the city needed emergency assistance to make payroll last week convinced the governor to appoint an emergency manager to take over control of the finances of Benton Harbor, the Herald-Palladium reports.
Granholm’s move comes despite an appeal by the Benton Harbor City Commission which hoped to develop a financial recovery plan without state intervention. A financial manager is expected to be in place by mid April.
According to the Herald-Palladium Benton Harbor commissioners have many explanations for the city’s poor financial situation.
The deindustrialization of America, greedy nonprofit groups, negative coverage by The Herald-Palladium and ousted former City Manager Richard Marsh Jr. — who invited in the fiscal review team that found the city’s money management incompetent — were all blamed for the city’s financial problems. But decades of corrosive poverty and sky-high unemployment were blamed the most for diminishing tax revenue.
In a letter to Benton Harbor Mayor Wilce Cook Granholm outlined the reasons for her decision as:
– A 13.1 percent increase in the city’s general fund deficit for the 2008-2009 fiscal year.
– Eight years of tardy audit reports to the state Department of Treasury.
– A steep decline in the city’s money on hand from $1.7 million in 2006 to $315,000 last year.
– An inability to make minimum contributions to city worker pension funds.
– Annual bank overdraft charges of $80,000 to $100,000.