Columns

Neil Munro

Winning Combination
for Taxpayers

December 2, 2011

If you’ve paid any attention to news of government in Michigan during the last quarter-century or so, you probably know who Louis Schimmel is.

But if you’re a newcomer, be informed that his name has become synonymous with the successful unsnarling of local government fiscal fiascos. It all began with his rescue of the Detroit-area downriver city of Ecorse.

Schimmel’s success there led to more invitations to work similar wonders in other municipalities — most recently Pontiac, which is the seat of Oakland County. Governor Rick Snyder appointed him the city’s emergency financial manager on September 22, the community’s third since 2009 (the previous two resigned).

Locals who’ve resented his presence over the years have been quick to disparage him as an outsider, a label that won’t stick in Pontiac. Schimmel grew up there and has lived for years in adjacent Waterford Township, not far beyond Pontiac’s city limits.

This latest work, like that of his first in Ecorse, is likely to be remembered because of the relative novelty of the task. An unelected outside expert’s reworking and rescue of Ecorse was the first of its kind, and that of Pontiac will be the first to involve a neighboring community.

One of Schimmel’s early moves to ease the financial burdens on Pontiac residents was to eliminate its police department and, instead, contract with the Oakland County Sheriff’s Office for police services. A similar arrangement for fire services with adjoining Waterford Township also was in the works. Both are expected to save money; the latter, for example, an estimated annual reduction of $3 million! In both instances, Pontiac’s emergency responders have been or will be hired.

Those of you who’ve read these Dome contributions before may recall that I’ve ground that merger “axe” repeatedly over the years, after having been first appalled decades ago by the incredible clutter of local governments in Oakland County: 61 cities, villages and townships, all basically functioning as cities.

Schimmel could involve two local governments in his latest effort only because Gov. Snyder led the successful charge to persuade lawmakers to make such a move legal, through the controversial strengthening of emergency managers’ powers.

So the mutual involvement of Pontiac and Waterford could be just the first of literally thousands of such changes, from Lansing to the local courthouses, cities and town halls. Once that legal wall has been breached for their benefit, taxpayers very likely will demand more and more such money-saving collaboration.

When governments at that level find themselves unable to make ends meet, it very often involves carelessness or incompetence. But budgetary calamities also can be a result of bad luck.

For example, Pontiac prospered for years as the home both of the Pontiac Motor Division of General Motors and the corporation’s truck and bus design and manufacturing.

But about all that remains of GM there is a stamping plant, an office building and an engineering-related structure. That obviously results in the loss of tax dollars paid on property values and worker income.

It is no wonder that Pontiac’s City Fathers could be described as overwhelmed by the magnitude of the change.

That’s where Schimmel comes in, to help the city make the massive but unavoidable adjustment to spending a lot less money.

The blow was compounded by an ill-timed national economic recession. Pontiac’s property values and tax income declined by more than 20 percent. Schimmel expects the latter to shrink 14 percent more in 2012-13.

Meanwhile, the city has generated only some $216,000 in the tax income dedicated to the more than $2.5 million in payments due on loans backing such projects as the downtown Phoenix Plaza and the Centerpoint office complex, now home to the massive Raleigh Michigan movie studio.

Pontiac’s problem also is compounded by the recent loss of more than 6,800 residents — at least 10 percent.

While that city has been hit spectacularly hard, all of Michigan’s cities, villages and townships have to be struggling financially, not to mention the school districts.

And common sense says the initial money-saving collaboration between Pontiac and Waterford should be but the first of what could be hundreds of similar combinations in the state.

If that happens, taxpayers would be wasting less and less money trying to maintain geographic identities they would retain anyway. Pontiac and Waterford always will be Pontiac and Waterford, even though they share the control of their fire engines.

Gov. Snyder has done his part to set the stage for this long overdue rationalization of the basic functions of government in the state of Michigan.

Unfortunately, the status quo is, as ever, digging in its heels against progress. Citizen signatures have been collected in an effort to take away the extended powers of an emergency manager; if sufficient numbers are certified, Michigan voters will decide the law’s fate in 2012.

The obvious aim is to protect the costly jobs and fiefdoms of those who earn their living in the thicket of excessive local government, at the expense of the rest of us.

We shouldn’t let it happen.

Neil Munro is a retired editor of The Oakland Press.