Emergency Manager Appointed to Take Control of Finances in Flint, Michigan

Michigan Governor Rick Snyder named Michael Brown, Flint’s former interim mayor, as the city’s emergency manager and charged him with reining in a $25.7 million deficit.

Brown will take control Dec. 1, according to a state Treasury Department news release. The city of 102,000 is unable to climb out of its financial hole, a state review found in October.

“This is my hometown, so this is a personal task,” Brown, 63, said in today’s release. “With the available tools, I am optimistic we can work cooperatively to restore fiscal stability.”

A state law approved in March gives emergency managers sweeping authority over cities and school districts, such as power to fire employees, nullify union contracts and call for elections to raise taxes.

Brown will be paid $170,000 a year by the city, under an agreement with the state. He is president of the Prima Civitas Foundation, a nonprofit that promotes new businesses and entrepreneurship, and is director of the Flint Area Reinvestment Office. Brown will form a five-member advisory committee, including one elected official and one representative of business, according to the release.

Local Guy

He is a good choice to restore Flint’s fiscal health, City Council President Scott Kincaid said.

“He’s a local person,” Kincaid said. “He understands the ins and outs of the city. He’s got a tough job, but I’ve known Mike Brown for a long time and he’s the type of person who’s up to the challenge.”

Kincaid, 59, who said he’s been a council member for 27 years, said Flint has experienced declining tax revenue, reduced state aid and borrowed from its water and sewer fund to pay for general operations.

Kincaid said Brown’s biggest challenge will be negotiating contracts with police and firefighter unions.

The review team’s report said the pension system is less than 60 percent funded, and that the city hadn’t made all the staff reductions promised in a deficit elimination plan, although it did reduce the workforce to 767 from 1,526 since 2001.

Snyder, in the release, said with Brown’s experience in public, private and non-profit sectors, “I am confident he is well-equipped to take on this critical post.”

Flint becomes the fourth Michigan city under an emergency manager, along with Benton Harbor, Pontiac and Ecorse. Detroit’s public schools also have an emergency manager, and Mayor Dave Bing has said the city itself may face a state takeover.

To contact the reporter on this story: Chris Christoff in Lansing at cchristoff@bloomberg.net

To contact the editors responsible for this story: Pete Young at pyoung13@bloomberg.net; Mark Tannenbaum at mtannen@bloomberg.net

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