Emergency Manager bill, budget concerns dominate Traverse City townhall

Having recently approved a law that allows the governor to appoint Emergency Managers to take over local governments and schools, and with proposals to cut school funding and tax pensions in process, state Rep. Wayne Schmidt and State Senator Howard Walker — both Republicans — seemed to score few points with the 400 people who crowded into Traverse City’s Hagerty Center for a town hall meeting this week.

The first question picked from a pile on 3×5 cards screened by legislative staff and read by AM 580 talk radio host Ron Jolly:

“If an Emergency Manager is put in charge of a school or a community, what specific protections are in place to prevent conflict of interest in the sale of a community’s assets or privatization of services?”

“The [EM], appointed by the governor could be an accountant or work somewhere else,” said Jolly.

Sale of assets worth more than $50,000 would require the approval of the Treasurer or Governor, Schmidt said.

Emergency Managers have a fiduciary duty to act in the best interests of the community where they are appointed, Walker said.

These answers did not seem to satisfy a major segment of the crowd.

“Miller Canfield was one of Governor Snyder’s largest contributors, represents Detroit and Grand Rapids against their city unions, and is on the list of people approved to become Emergency Managers,” said Gerry Alpizar of Traverse City. “Tell me how that isn’t a conflict of interest right there. … Miller Canfield would directly benefit.”

“Miller Canfield is a legal firm,” said Walker. “The point is that in the bill the Emergency Manager must be an individual.”

“Doesn’t smell good,” someone shouted amid scattered groans.

A Miller Canfield attorney “would probably, I would assume, take a leave of absence from the firm” if appointed Emergency Manager, Schmidt said.

If the company benefited from having one of its employees run a town that may not run afoul of state conflict of interest laws.

“Conflict of interest under state law means [an individual] would have to personally gain from it.” said Schmidt.

Emergency Managers would only be appointed if a city was on the brink of bankruptcy, Walker said.

“In my opinion the elected officials who got that community into that situation have corrupted the process and they are no longer representing the people or the taxpayers and they need to have these steps put in place to protect the taxpayers,” he said.

This got some applause.

“Did you support this bill?” A man shouted from the back of the room. “I think it’s socialistic and an abomination. It’s dictatorship.”

Another pointed out that under the law state intervention in a town could be triggered by a lowered credit rating, a small deficit or making a late payment.

In two hours no audience member spoke in support of the Emergency Manager law, but one woman did should out out at those who were questioning the bill, saying, “I don’t appreciate that we are in such dire straits, and what part of ‘we are broke’ don’t you understand?”

Bill Brown, who retired from the Grand Traverse County Human Resources Dept., pointed out that while a town’s elected officials must take an oath an oath of office and swear to uphold local laws and the state and federal constitution, appointed managers would not.

There were many teachers in attendance and comments challenging planned cuts to school funding and bills to promote privatization of school services drew boisterous support.

Many also questioned the governor’s proposal to cut business taxes while eliminating the Earned Income Tax Credit and taxing pensions.

Donna Klinefelter of Traverse City said that cutting education funding will harm the community.

“Poorly funded education will also hurt working families because struggling schools will not attract industry and business no matter how non-existent taxation may be,” she said. “Privatization in education means someone making a profit from our children — and paying less to those individuals who live in our communities and will spend money in our communities.”

“I truly had hoped I could listen to the lawmakers who voted for [the Emergency Manager bill] and feel foolish but relieved,” said Betsy Coffia, who led a teach-in on the bill at the public library last week. “Instead, I felt more alarmed and even had a sneaking hunch I may have read this law more carefully than they have.”

“The people will repeal this law,“ she said. “It is unacceptable and we will exercise our right as citizens to protect ourselves from it, since our legislators will not.”