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untanglingwebs
El Supremo
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The April 27,2012 Detroit Free Press carried a story about a whistle-blower lawsuit against the Pontiac emergency manager louis Schimmel and the building department head Richard Marsh. Wade Trim Associates is also named because marsh works for them and his position is contracted out to Pontiac.
The lawsuit was filed by the former construction manager for the City of Pontiac Edward Wentz. Wentz alleges he was fired after he reported allegations of bid-rigging and environmental violations.
Wentz reported violations in the demolition process and asbestoes disposal to the federal office of Housing and Urban Development and the Michigan Department of Environmental Quality. The city was cited for these violations.
The allegations include claims that marsh violated the biding procedures when awarding contracts to a a contractor banned for previous poor work for the city.
when the city discovered who had made the complaints, Wentz was allegedly fired in retaliation.
Schimmel was the executive administrator in the City of Warren, a city known for political intrigues. He was the court appointed receiver for the City of Ecorse and the emergency manager for Hamtramck. |
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Fri Jun 01, 2012 9:17 pm |
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untanglingwebs
El Supremo
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| Can the absolute power of the emergency manager lead to absolute corruption and abuse of power? |
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Fri Jun 01, 2012 9:40 pm |
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untanglingwebs
El Supremo
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More on Emergency Manager Louis Schimmel’s decision to forfeit millions in HUD funds for Pontiac
By Eclectablog on January 12, 2012in Emergency Managers, Pontiac
Yesterday, I wrote about how Pontiac Emergency Manager Louis Schimmel signed an agreement with Oakland County to manage monies from a substantial HUD grant. This boneheaded decision, it turns out, would have resulted in a loss of upwards of $800,000 per year for Pontiac. Thankfully, Congressman Gary Peters stepped in to prevent this from occurring.
Federal and local politicians lined up Wednesday to announce they undid a move taken by Pontiac’s state-appointed emergency manager that would have cost Pontiac thousands in federal funds.
While they were at it, they took time to slam Emergency Manager Lou Schimmel’s method of management.
U.S. Rep. Gary Peters, D-Bloomfield Township — flanked by Oakland County Commissioner Tim Greimel, D-Auburn Hills, Pontiac City Council President Lee Jones and other city officers — said he prevented Pontiac from missing out on millions of dollars in Housing and Urban Development (HUD) Community Development Block Grant money at risk because of a mismanaged contract signed by Schimmel.
“We had a situation in Pontiac where (Schimmel) was going to shift block grant money away from city to the county,” said Peters.
Had the shift occurred, Peters said, it would have meant a “significant loss” of funds — up to $800,000 — to the city.
Peters suggests that Schimmel did this simply to make his own life easier and so that he wouldn’t have to deal with management of the grant money. This, he says, is exactly when Emergency Managers are the wrong approach for Michigan.
“Emergency managers come in and are focused on balancing budgets in the short term, and because of that they make decisions that aren’t necessarily in the best interest of the city,” he said.
“They’re interested in taking things off books to make their job a little easier. That maybe be good for them but it’s not good for the city.
“It highlights why we have to have elected officials, accountable to the people.”
Meanwhile, Lou Schimmel is defending his decision, even while he admits it would hurt Pontiac financially.
Yet Schimmel said his decision was his only option at the time, and necessary to preserve any part of a program that has been cited repeatedly for actions such as paying service providers for work that could not be verified and shoddy record-keeping.
He said HUD deadlines forced his hand — he did not want to have the city administration involved in mismanaging funds continue to be responsible for them.
“HUD made the recommendation,” Schimmel said. “It did mean we’d lose some funds to have good management.
Oakland County runs a stellar program.”
What’s odd about this statement is that Schimmel is actually the person in charge of managing the funds now. He is in complete control over the government of Pontiac.
The Huffington Post has more from Congressman Peters:
Peters, who has publicly opposed Michigan’s emergency manager law, sees Schimmel’s handling of federal funds administration as part of a larger problem with emergency managers.
“Replacing democratically elected officials with an emergency manager creates an environment where decisions are made with no accountability and no commitment to the long term benefit of the city,” Peters said. “The governor can appoint an emergency manager, but he can’t guarantee that his decisions are in the best interests of Pontiac residents.”
Schimmel, who has managed Pontiac since September, is not the first emergency manager to have his cost-cutting strategies questioned. Last week, Michigan Radio reported that an independent audit of Benton Harbor, controlled by Emergency Manager Joe Harris, showed a large deficit there: The city spent about $653,000 more than its operating budget in fiscal year 2011.
HuffPo also discovered that Schimmel could actually still reject this plan.
According to Laura Feldman, public affairs specialist for HUD’s Midwest region, Schimmel has until Friday to decide whether to go forward with a cooperative or joint agreement that will determine how the Pontiac’s HUD funds for 2012-2014 will be allocated.
“HUD, Pontiac and Oakland County are only exploring the options at this point,” Feldman wrote in an email to HuffPost. “HUD is making sure that the Emergency Manager has a clear understanding of all the options available.”
Pontiac already lost nearly a half million dollars in its grant allocation last year due to cuts in the block grant program. Louis Schimmel could potentially make that well over a million dollars per year. It’s not in his job description to ensure the future economic revival of Pontiac or to work to build up the neighborhoods and housing stock. His job is to balance the books and leave. This is exactly the point I have made repeatedly: Emergency Managers do not solve the problems that created the financial emergency in the first place. They simply put a band-aid on a gaping wound and leave. It’s also exactly the reason why all three Michigan cities that have seen Emergency Managers come and go are back in dire financial straits again.
I am often told that I should shut up about this if I don’t have the solution to offer myself. My response is this: I don’t have to have the solution to know that this solution is wrong just like if I eat food that tastes bad, I don’t have to know how to make the food taste good myself to know that it’s bad.
With Emergency Managers, all I have to do is look at the results: stripping away local democratically-elected representation, a disparate impact on minorities, and clear, obvious evidence that Emergency Managers not only don’t work but that they often make decisions that aren’t in the best interests of the municipality in their rush toward “efficiency”. Looking at this empirical evidence tells me that this solution is disqualified — it, in fact, simply is NOT a solution at all.
Follow Eclectablog |
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Fri Jun 01, 2012 9:48 pm |
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untanglingwebs
El Supremo
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HOMELAND SECURITY NEWS WIRE
Privatizing securityMichigan law enables executives to privatize security
Published 23 March 2011
Michigan’s new Emergency Manager law, in addition to allowing previously negotiated union contracts to be voided, gives appointees the authority to privatize police services and jails; some are worried that the rush to cut police labor costs will impair public safety; critics say that savings from privatization are illusory
In addition to allowing previously negotiated union contracts to be voided, Michigan’s new Emergency Manager law gives appointees the authority to privatize police services and jails.
Indeed, voiding labor contracts and outsourcing government services is a key aspect of how they are expected to balance the budgets of financially stressed towns.
“Certain functions of police work, such as jails, can easily be privatized,” said Louis Schimmel, executive administrator for the city of Warren.
Schimmel has deep experience with applying private sector solutions to economically struggling towns. In 1986 he was appointed receiver for the city of Ecorse, where his efforts to cut costs through privatization were dubbed by the Mackinac Center, “a major, although tentative victory for market forces.”
As emergency financial manager in Hamtramck from 2000-2006, Schimmel sold off the Dept. of Public Works.
Schimmel said that Warren is considering following the example of Sterling Heights, which contracted out the management of its jail last year. Sterling Heights replaced the police officers at their jail with the Danish private security company G4S— once known as Wackenhut.
Schimmel said that a lack of private sector alternatives makes it difficult to privatize whole police departments but communities can consolidate services and costs with neighboring municipalities or purchase services from the county.
This is underway in the city of Pontiac, where the police, under pressure from emergency financial manager Michael Stampfler, voted to dissolve their union in expectation that some would be hired on by the Oakland County Sheriff’s Dept.
Some are worried that the rush to cut police labor costs will impair public safety.
According to Michigan Association of Police Chiefs executive director Tom Hendrickson, there is no requirement for minimum level of police services in Michigan communities. “There could be literally no police,” he said.
Privately run jails and prisons have created controversy around the country as they have become more common. A report from the Sentencing Project says that cost savings from privatization are illusory:
Research to date has concluded that there is little evidence that privatization of prisons results in significant public savings. In a 1996 General Accounting Office (GAO) review of several comparative studies on private versus public prisons, researchers acknowledged, “because the studies reported little difference and/or mixed results in comparing private and public facilities, we could not conclude whether privatization saved money.”
A study by the Bureau of Justice Assistance (BJA) released in 2001 had similar conclusions, stating that “rather than the projected 20-percent savings, the average saving from privatization was only 1 percent” and that “the promises of 20-percent savings in operational costs have simply not materialized.”
Critics also argue that private jails and prisons have significantly more safety problems, including escape attempts, and assaults on guards and other inmates.
More problematic is the BJA study’s further assertion that “the rate of major incidents is higher at private facilities than at public facilities.” A survey of the prison industry conducted by analyst James Austin also found 49 percent more inmate on staff assaults and 65 percent more inmate on inmate assaults occurred in private minimum and medium security facilities than in comparable publicly run facilities.
Michigan Association of Police executive director Fred Timpner said he feels it is important to maintain public control of policing.
Regardless of the practicalities, however, Hendrickson argues that privatizing police work will put a crucial public function under the control of corporations and take us back to a time few would like to revisit.
“[E]arly police or sheriff’s (sic) in England were the feudal lords army,” he said via e-mail. “As a result they were controlled by the local nobility. Abuse was rampant. To this day in Europe there is fear of a private police force … they are mercenaries.”
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Fri Jun 01, 2012 9:56 pm |
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untanglingwebs
El Supremo
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This is an example of just how wrong the EM law is.
When Kurtz was the EFM under the old law, he too violated federal HUD rules when he gave money to Flint West Village and GECA just before he left.
Flint West Village had one foot in bankruptcy and the other on a banana peel. They had just lost 65 houses for unpaid taxes and had the rest of their houses on the verge of tax foreclosure.
GECA had lost three houses to taxes and owed money on more. Their own auditor (Dupuis & Ryden, now Plante Moran) stated they could not ensure their ability to remain a viable entity. MSHDA sent the organization a letter saying they would no longer finance the agency for new homes and restructured the grants to avoid a HUD finding and even gave GECA money.
I often wondered if this was the Kildee's help here.
MSHDA had to pull back on other projects because of unpaid taxes. They were notified by the city and failed to do their own due diligence. When they finally gave her money to rehab three houses, she could not repay the money as the houses did not sell. The Shelter of Flint bought all three houses, again with MSHA money.
The Land bank sold GECA a condemned house although they violated their own policies because once again GECA owed taxes. But what is new for the land Bank! |
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Sat Jun 02, 2012 7:00 am |
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untanglingwebs
El Supremo
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"When Kurtz was the EFM under the old law, he too violated federal HUD rules when he gave money to Flint West Village and GECA just before he left."
When Williamson refused to honor the EFM orders for GECA and Flint West, the council made demands and held an unjust hearing that was nothing more than a bully pulpit. They tried to take the HUD funding to the ccounty. The county was discussing borrowing Flint money for projects, to be repaid at a later date. HUD thwarted this effort when they stated the Chief Executive (the mayor) had to sign such an agreement.
Because council refused to approve the reallocation of the monies, HOME dollars were lost for over a year. |
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Sat Jun 02, 2012 7:25 am |
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Dave Starr
F L I N T O I D
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quote:
untanglingwebs schreef:
Can the absolute power of the emergency manager lead to absolute corruption and abuse of power?
Absolutely. |
_________________
I used to care, but I take a pill for that now.
Pushing buttons sure can be fun.
When a lion wants to go somewhere, he doesn’t worry about how many hyenas are in the way.
Paddle faster, I hear banjos. |
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Sat Jun 02, 2012 9:15 am |
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