After Emergency Manager, Ecorse On Track and In the Hands of Local Officials

ECORSE — With a healthy balance sheet, a two-year budget and an improved credit rating, Ecorse is back in the hands of local leaders. 

In April, Gov. Rick Snyder announced the city no longer is in a financial emergency.

Former Gov. Jennifer Granholm put the Wayne County city under emergency management in 2009. Joyce Parker, the outgoing emergency manager, told Gov. Snyder recently that a $14.6 million cumulative deficit and a $5 million structural deficit were eliminated.

And to make sure the city stays in good standing financially, there are several safeguards in place.

The city must now work with a transition advisory board. The board was appointed by Gov. Snyder and is composed of three people: a treasury department official, a certified public accountant and Parker. The board will give advice about how the city should operate, but also will serve as a watchdog for the taxpayers. Elected officials must stick with the city's two-year budget and get approval for any long-term moves, like selling assets or negotiating contracts.   

Michigan has had a mixed history with emergency management, in part because of changes to the law. When the law was originally passed, emergency managers had no power to modify contracts. The law's current form changed that, which gave emergency managers the power to address fundamental and structural problems previously unaddressed by cities and school districts in financial distress.

Parker said the communication and open-mindedness she had from residents, staff and elected leaders helped Ecorse get through a difficult situation.

"The key is building a good foundation and team," she said. "They were open to me taking the time to explain the changes and allowing me to move forward with their support."

Parker also was able to put in place several changes to try to ensure financial success.

An administrator now manages the city. Before she arrived, elected leaders had full control of day-to-day operations, which provided a system that made the city vulnerable to mismanagement and corruption (some former city officials have been found guilty of bribery and other corruption charges). Now, elected officials and the city administrator will have specific duties and if the council wants to fire the administrator, it will need approval by the state treasurer. 

Ecorse also has made a change in the way it issues bonds. Parker worked with the Michigan Legislature to push for a law that allows a third party to collect taxes. The option is now available to cities with populations under 15,000. The tax collection agency then makes sure debt service payments can go into a separate lock box, ensuring investors will get paid. 

However, there is some risk. The city gives up financial flexibility when there are downturns in the economy, but Parker said the tradeoff was being able to improve the city's credit rating, which allowed the city to borrow money at better rates.

Another change Ecorse made was consolidating its police and fire departments.

Staff reductions saved the city $1.4 million and by combining staffs into one public safety department, the city can now get more patrols on the roads. The combined departments also will save between $300,000 and $400,000 a year.

So, how do elected officials feel about the three-and-a-half years under emergency management?

"She kept us in the loop. We brainstormed together and she worked with residents," said Mayor Darcel Brown. "I think the residents appreciated that."

Mayor Brown was elected shortly before Parker was appointed. The mayor and all city council members are up for election this year. He said there is renewed consciousness about spending.

"Under my watch, as mayor there will no longer be free will spending," he said. "That is a thing of the past."

Parker is now emergency manager of Allen Park, and thinks Ecorse can serve as a model for the state.

"Ecorse is operating well with limited resources, but certainly it is a baseline for growth for which there is quite a bit of potential now," she said.