Financial manager doing good job for city - theoaklandpress.com

Financial manager doing good job for city - theoaklandpress.com

Financial manager doing good job for city

Published: Wednesday, March 31, 2010

By Robert L. Kleine

It has been just over one year since Fred Leeb was appointed Emergency Financial Manager (EFM) for Pontiac. As chair of the Local Emergency Financial Assistance Loan Board, which appoints and oversees EFMs in communities under financial emergency, I want to provide the citizens of Pontiac with an update on what has been done to move their city forward and offer some perspective on what lies ahead.

Leeb has accomplished much in his first year as EFM. He has made many difficult decisions and Pontiac is in better financial shape today than it was one year ago.

Although the financial emergency that has plagued the city for years has not been eliminated,

Leeb has Pontiac on the right path to return the city to financial health. In fact, current estimates indicate the city will show a modest budget surplus when this budget year ends June 30. The surplus will help further trim the city’s structural deficit, which has been reduced from more than $7 million to approximately $5.6 million.

Among Leeb’s accomplishments are:

• Successful negotiations with the Pontiac firefighters union, saving $3 million annually;
• Settlement with the North Oakland Medical Centers. Received payment of $2.25 million;
• Elimination of nonessential administrative personnel, saving $2.2 million in fiscal year 2010;
• Furlough days implemented in October 2009, saving approximately $645,000 in fiscal year 2010;
• Received approval for and issued bonds to improve wastewater and drinking water facilities. Saved $7.7 million; Obtained approval for approximately $15.4 million in Neighborhood Stabilization Program II funding.
• Plante & Moran now operating as full-time CFO/Controller; Finance Director position eliminated without increase in cost, saving $100,000-plus a year; and
• Sale of the Silverdome, saving more than $1.5 million spent annually on maintenance.

The Silverdome will soon return to life as a viable entertainment venue, and will again contribute to the city’s tax base rather than be a drain on resources.

These are just a few examples. A more extensive list of accomplishments is posted on the City of Pontiac website at www.pontiac.mi.us. I encourage anyone who is interested to visit the site.

Leeb, working with the mayor and city council, is also in the process of updating the city’s written Financial Plan and developing a budget for fiscal year 2011, which begins July 1. These two documents will provide an important and necessary roadmap for the city’s financial future.

To provide residents and others with an easy way to offer their respective thoughts and suggestions on the budget and financial plan, Leeb has placed a suggestion box on the city’s web page (http://www.pontiac.mi.us/info/suggestionbox.html). Those who do not have Internet and/or e-mail access can send their suggestions to Fred Leeb, at Pontiac City Hall.

As you can well imagine, Leeb will continue to be very busy over the next several weeks. I encourage citizens and elected officials alike to remain involved and to exhibit patience with the process. Pontiac’s financial emergency did not develop overnight. Likewise, serious and lasting remedies will also take time. Everyone shares the common goal of returning Pontiac to solid financial footing as quickly as possible. With the continued support of local leaders and Pontiac residents, that goal can and will be achieved.

Robert J. Kleine is Michigan State Treasurer.

New life for Pontiac Silverdome: First up, monster trucks - CSMonitor.com

New life for Pontiac Silverdome: First up, monster trucks - CSMonitor.com

For a decade, the Silverdome has been a symbol of economic distress in southeastern Michigan, an area hit hard by mass layoffs, a shrinking population, the foreclosure crisis, and automotive plant closures. The hulking arena was sold via an auction sponsored by the city of Pontiac for about 1 percent of its $55.7 million construction cost in 1975.

City officials at Thursday’s press conference agreed. “This is a good day for the city ... to have the Silverdome on the cusp of becoming a major regional entertainment center again,” said Fred Leeb, Pontiac's emergency financial manager. “The facility is poised to again generate revenue for the city and is expected to be a key piece in Pontiac's economic rebound.”

 But after the Detroit Lions' 2001 departure for Ford Field in downtown Detroit, the venue was used only sporadically, contributing to its disrepair. Upset over the Silverdome's $1.5 million annual upkeep costs, the city had considered demolition before the 2009 auction.

Once Thriving Michigan Town Tanked By Recession : NPR

Once Thriving Michigan Town Tanked By Recession : NPR

Mr. LEEB: Well, there are really three basic things you can do in any you turnaround. One is to increase revenue, another is to decrease expense. But the third is to take assets that are being unproductive and convert them into something that can be valuable again. So, in the case of the Silverdome, there's a stadium that had been built in 1975, so that's 35 years ago. It's also been empty for eight years and has been costing a million and a half a year just to maintain an empty building. It was obvious to me that that just could not go on. So, my thinking was the way to do it was to set a final endpoint, which was an auction, and give it to a person who can operate it in a professional manner. And that's actually what's happening. A person from Toronto bought it. And he is intending to use it again.
MARTIN: Is this the thing, though, that just is seems kind of stick in people's craw? It just feels, what, like humiliating for some reason or...
Mr. LEEB: There are some people who thinks it's humiliating but those people would also feel like it's better to spend the city's hard earned tax dollars on an empty building than to have critically-needed city employees, like police. The reason I bring up police is that three, four years ago the city's police department had about 170 officers, now it has about 70. So, which would you rather have, you know, a few policemen coming back or an empty building doing nothing?
MARTIN: What's been the hardest decision that you have had to make since you have been doing this job? Is there anything that's kind of made your stomach hurt even a little?
Mr. LEEB: What makes my stomach hurt is wasting money when I see people in need. There are people that don't have enough money to repair their windows in the wintertime or don't have enough money to live in an apartment. I mentioned before you started talking here on the radio that a person died today in an abandoned building. Those are the kind of people I feel sorry about because the city doesn't have enough money to provide for those people.

Jack Lessenberry Essays and Interviews:

Jack Lessenberry Essays and Interviews:

Essay: Can Pontiac Be Saved? - 1.8.10

The Emergency Financial Manager of Pontiac has an interesting idea to turn around the city.

Michigan Radio’s Political Analyst Jack Lessenberry explains…

Hear Audio Story   

Pontiac is one of Michigan’s oldest cities. People were living here as far back as the 1820s, before Michigan became a state.

Today, it is the center of government for affluent Oakland County and home to Bloomfield Hills, tony Birmingham and Somerset Mall. Yet Pontiac itself is in trouble, as are many small, older industrial cities throughout not only Michigan, but the entire Midwest.

Last year, poor financial management and declining revenues led to what amounted to a state takeover of Pontiac.

Fred Leeb, a turnaround specialist with notable successes in both the public and private sectors, was appointed Emergency Financial Manager in March. That means he is essentially a one-man government, when it comes to money issues.

Pontiac has a mayor and city council, but they don’t have the authority to buy a pencil unless Fred Leeb says they can. I went to talk to Leeb yesterday, in his modest office in Pontiac’s cavernous old city hall. On his desk there was an immense pile of financial reports and invoices. He insists on seeing and approving each one.

His job is an intriguing one: How do you take a declining older industrial city and turn it around? That’s not an academic question, nor is Pontiac a special case. A number of Michigan cities have had emergency financial managers recently: Ecorse, Hamtramck, Flint, Highland Park. It is highly likely that more will follow.

Saving cities for the long-term is what Leeb has been thinking hard about. He knows the nuts and bolts of his craft; he has an MBA from Philadelphia’s prestigious Wharton School of Business, and had successful careers at Ford and Occidental Petroleum.

He knows how to balance a budget, bring spending in line with revenues, and divest a city of unproductive assets. He recently took heat for selling the long-vacant Pontiac Silverdome, former home of the Detroit Lions, for less than some thought it was worth.

In fact, getting rid of it saved the city $30,000 a week. But he also knows you can‘t cut your way to prosperity. “The fact is that our main sources of revenue, the income tax, the property tax, and revenue sharing, are going to continue to decline,” he said. What’s needed is new job-generating businesses. But how do you get there?

Fred Leeb has a fascinating idea. During World War II, the government invented the atom bomb by corralling the best minds in physics and bringing them together in Los Alamos.

Why not try that concept here? He’d like to see the government bring perhaps a hundred of the nation’s top experts to Pontiac and give them a ten-year assignment: Find a way to turn this city around. You would pay them, but these would be people who are far more interested in making something happen than in making money.

He thinks Pontiac would be the perfect laboratory.

Detroit is too big. But Pontiac, with twenty square miles and an ethnically diverse population of 65,000, could be perfect.

How much would this cost? Maybe $150 million, tops, about what the government spends every day in Iraq. If it worked, it could provide a model that could revitalize industrial America.

That’s a fascinating concept. If I were Gary Peters, the congressman from the region, or U.S. Senator Carl Levin or Debbie Stabenow, I would want to jump on this, right now.

That is, unless we are all ready for Michigan to give up and die.

Pontiac financial manager looks beyond workforce for savings | Crain's Detroit Business

Pontiac financial manager looks beyond workforce for savings | Crain's Detroit Business

There are many things we haven't done yet beside cutting people. Just by changing insurance carriers for a group of our employees we saved $300,000, for example. There are lawsuits to resolve, other program changes to make, and cutting employees is not the only knob to turn.

Agency partnerships help Pontiac Police Department - theoaklandpress.com

Agency partnerships help Pontiac Police Department - theoaklandpress.com

Old, Empty Stadiums Could Be Last-Minute Gifts - WSJ.com

Old, Empty Stadiums Could Be Last-Minute Gifts - WSJ.com

By HANNAH KARP, 12/23/2009

Associated Press

The Pontiac Silverdome is shown last month.

Most sports fans assume that once a stadium or arena is replaced by a newer model, the old house is immediately blown to smithereens in a pyrotechnics show that would make James Cameron proud. But many more than you think are still around. Some have historical value, while others are still bringing in funds to cash-strapped municipalities. Who knows, some may even be available to well-heeled holiday shoppers looking for a last-minute gift. Here are a few:

Pontiac Silverdome, Pontiac, Mich.
Thirty-five years after taxpayers spent $56 million to build it, this domed stadium, once home to the NFL's Detroit Lions and NBA's Pistons, was auctioned off last month for $583,000 to the highest bidder—a developer from Toronto. After several lawsuits, the deal is expected to go through this month because the city can no longer afford to maintain it. The developer, Andreas Apostolopoulos, spent last week in Pontiac and says he is in discussions with Major League Soccer to bring a team to the Detroit area. He says the stadium might not be quite the bargain it appears, given the amount he'll have to invest to bring the facility up to speed. "There's a lot of work to do first," he says.
Reliant Astrodome, Houston
The world's first domed sports stadium, the Astrodome was nicknamed the "Eighth Wonder of the World" when it opened in 1965 to house baseball's Astros and football's Oilers. But since the Astros moved into Minute Maid Park (née Enron Field) for the 2000 season, after the Oilers had already decamped for Tennessee for the 1997 season, the city has spent millions over the years on basic upkeep even though the dome has no major tenants. After plans fell through to convert the facility into a hotel and convention center, there are groups lobbying to turn it into everything from a movie studio to a planetarium.
Pyramid Arena, Memphis, Tenn.

Enlarge Image

Associated Press

The Pyramid in Memphis shown in early 2008.

Opened in 1991, this 20,000-seat arena on the banks of the Mississippi—one of the world's 10 largest pyramids—housed the NBA's Memphis Grizzlies and the University of Memphis men's basketball team until both moved to the FedEx Forum in 2004. Shelby County, which sold its half share in the arena to the City of Memphis this year, has considered refashioning the pyramid as a casino or an aquarium. A local congressman suggested opening a new branch of the Smithsonian Institution. Sporting-goods outfitter Bass Pro Shops is renting the pyramid for $35,000 a month with plans to convert it into a megastore, but a spokesman says the company won't purchase the building.
Robert F. Kennedy Memorial Stadium, Washington
Former home of both the Redskins and baseball's second Senators franchise, which moved to Texas to become the Rangers after the 1971 season, the 48-year-old RFK hasn't been able to hook a new team for long despite $18.5 million in renovations for baseball's Nationals, which played there from 2005 through 2007. Critics pronounced it one of baseball's worst stadiums on account of its cramped quarters and awkward layout. The resident DC United soccer team hopes to have a new home by 2012.
Balboa Stadium, San Diego
Built in 1914, this facility housed the Chargers during some of their winningest years from 1961 to 1966 and hosted three American Football League championship games during that period. Now owned by the city of San Diego and leased to the local school district, the stadium has fallen into such disrepair that many soccer players and runners fear injury on the worn-down track and torn-up turf. The city and district have said they can't afford renovation.
Olympic Stadium, Montreal

Associated Press

Montreal's Olympic Stadium in 2001.

Designed for the 1976 Olympic Games by ambitious French architect Roger Taillibert, this structure—which was part of a $1.5 billion project that was just paid off a few years ago—has been plagued by problems since its inception, thanks to labor strikes, fires and a host of structural snafus. The inclined tower—now the highest in the world—wasn't finished in time for the Olympics, nor was the retractable roof, which proved unstable in high winds even when it was completed a decade later. Part of the roof collapsed before the Montreal auto show in 1999. Once home to baseball's Expos, a soccer team and the Canadian Football League's Montreal Alouettes, the stadium was used this month for a swine-flu-vaccination clinic.
Beijing National Stadium, Beijing
This stadium, built for about a half billion dollars before the 2008 Olympic Games and better known as the "Bird's Nest," was transformed into a snow park this month, much to the chagrin of environmentalists who say creating the artificial snow is a waste of water, especially given the continuing drought in the area. The snow festival is one of only a handful of events the stadium has hosted since the Olympics. With annual operating costs of roughly $10 million, the facility was placed under government management in August to curb financial losses.
Alamodome, San Antonio
Opened in 1993, the nearly $200 million arena was forsaken seven years ago by the NBA's Spurs, fans of which complained of poor views from many seats in the designed-for-football stadium. (The Spurs now play in the AT&T Center). In 2005 the San Antonio City Council voted to spend close to $6.5 million to renovate the arena to lure a Major League Soccer franchise to the city, but it soon abandoned that plan, and the city hopes to someday draw an NFL team. One of Texas' least-utilized stadiums, it hosted the New Orleans Saints for a few games in 2005 when they were displaced by Hurricane Katrina. The stadium's bread and butter is playing host each year to college football's Alamo Bowl, which this season will feature Texas Tech against Michigan State.
The Forum, Inglewood, Calif.
Home of the Los Angeles Lakers and NHL's Kings until both moved to the Staples Center in 1999, this circular, $16 million arena was purchased by the Faithful Central Bible Church in 2000, though the church stopped holding regular services in the arena earlier this year. The church's Web site states "WE ARE AVAILABLE" for film shoots and rehearsal space; earlier this year the Lakers played a preseason game in the Forum to celebrate the team's 50th season in Los Angeles. The arena also has hosted big health clinics for low-income families.
Write to Hannah Karp at hannah.karp@dowjones.com