Sunday, September 30, 2012

Fate of emergency manager law now up to voters | City of Detroit | Detroit Free Press |

Fate of emergency manager law now up to voters | City of Detroit | Detroit Free Press |

 "Eventually, there comes a point where the city is going to go over the cliff, and something has to be done," said Fred Leeb, a financial consultant based in Oakland County who was the emergency manager of Pontiac in 2009-10 under Public Act 72. "You can't go on spending more money than you take in ... using smoke and mirrors to pretend the problem will go away."

Monday, September 24, 2012

Local governments cut costs via efficiency; steps include computers that shut themselves off - The Washington Post

Local governments cut costs via efficiency; steps include computers that shut themselves off - The Washington Post

By Associated Press, Published: September 24

"Around the country, governments big and small are embracing cooperation, consolidation and efficiency to wring a few more dollars out of the budget as the effects of the Great Recession linger....
During the worst of the downturn, many local governments resorted to layoffs and other blunt means of cutting spending. Now, with the economy still shaky, they are looking in less obvious places for ways to save money."

Tuesday, September 18, 2012

Bloomberg News: German City Needing Aid Shows Debt-Crisis Tentacles By Annette Weisbach on September 18, 2012

The house of cards is falling.  Will Greece now have to provide aid to Germany?

"Offenbach, a city of about 120,000 people neighboring Germany’s financial capital Frankfurt, is so mired in debt it had to ask the state of Hesse for a 211 million-euro ($277 million) bailout in June.  In so doing, it became one of the largest of 102 municipalities to tap 3.2 billion euros of aid Hesse is making available as the first of Germany’s 16 federal states to introduce a formal rescue fund for struggling towns and cities."

For entire article:

Commentary: Bringing cities back | Michigan Radio

Commentary: Bringing cities back | Michigan Radio

The other day I got a note from Fred Leeb, who spent a little over a year as Emergency Financial Manager in Pontiac until the middle of 2010.  He started thinking a lot about this problem when he was running Pontiac. Leeb was a natural choice for the job; he was a recognized expert in turning troubled nonprofit businesses around. While he was in Pontiac, he managed to balance the budget and lead the city to an upgraded bond rating.

Eventually, he got tired of fighting with local politicians, and returned to the private sector. But while in Pontiac, he had a dream he never got to see become reality.

He wanted to see the government turn Oakland County’s capital city into a demonstration laboratory. He had this vision of bringing a hundred of the nation’s top turnaround experts to Pontiac, and giving them a ten-year assignment to reinvent the economy.

Leeb called his concept BIG -- for Business Innovation and Growth. He never did manage to interest the government in his program. But he’s been thinking about this ever since.

He’s now concluded that it would be virtually impossible to bring enough taxpaying new businesses and residents to any troubled city, if you focus on getting them one at a time.

There will always be too many better options -- especially since cities like Detroit and Pontiac cannot provide the kind of services and retail shopping upscale residents are going to want.
The chicken-and-egg dilemma is that they can’t provide quality of life services until they get enough residents who can pay for them -- but the residents are unlikely to come unless the services are already there.

Since leaving the pressure of running Pontiac day-to-day, Fred Leeb has been doing more research and is more convinced than ever that he is on to something. He notes that Quicken Loans’ Dan Gilbert moved nearly 2,000 employees to Detroit to help build the critical mass needed to revitalize downtown.

On a smaller scale, Cornell University and Technion, an Israeli technological institute, are plunging hundreds of millions into an attempt to transform a section of New York City’s Roosevelt Island. Mayor Michael Bloomberg believes this may generate up to $23-billion in economic activity over the next thirty years.

The other day, Leeb noted approvingly, former NBC news anchor Tom Brokaw joined those saying that what’s needed is a national jobs program, one on the scale of the Marshall plan that helped rebuild Europe after World War II.

Fred Leeb hopes that if President Obama is reelected, he will turn his attention to such a plan, possibly with the money saved from winding down the wars in the Middle East.

There are those who say that given the deficit, America can’t possibly afford to do anything like a huge jobs program. Leeb is anything but a spendthrift. But when he looks at Pontiac or Detroit, he thinks that the real question may be: How can we afford not to?   

Jack Lessenberry is Michigan Radio’s political analyst. Views expressed in the essays by Lessenberry are his own and do not necessarily reflect those of Michigan Radio, its management or the station licensee, The University of Michigan.                  

Saturday, September 15, 2012

Fiscal stress continues for hundreds of Michigan jurisdictions, but conditions trend in positive direction overall (mpps-fiscal-health-2012.pdf (application/pdf Object))

mpps-fiscal-health-2012.pdf (application/pdf Object)

The Center for Local, State, and Urban Policy
Gerald R. Ford School of Public Policy, University of Michigan
Michigan Public Policy Survey September 2012

"For the first time since the MPPS began in 2009, fewer than half of local leaders expect their jurisdiction will be less able to meet its fiscal needs next year, as compared to this year. This may reflect a “new normal,” based on cuts in services and staffing that have been made by local governments over the last few years, thereby allowing them to get by with fewer resources.

Still, the overall improvement masks ongoing fiscal distress for hundreds of jurisdictions, for which the worst may be yet to come.  Further, even for those jurisdictions that may have turned the corner toward better times, other factors on the horizon could send them back on a negative path. In recent months, for instance, the U.S. economy appears to have been slowing once again, and should this continue or worsen, it could be expected that local governments would quickly experience negative effects.

In addition, state policymakers in Lansing are expected to re-start efforts to reform the Personal Property Tax, another significant source of funding for local governments. Any significant cuts in revenue from this source could also potentially threaten the nascent improvement in fiscal health for local governments statewide.

While conditions appear to be improving overall, there is no doubt this is still a challenging time for local government in Michigan."