Lincoln Park’s financial emergency over, state says

James David Dickson, and Mark Hicks

For the first time in 15 years, no Michigan city is under emergency financial management.

Emergency manager Brad Coulter has wrapped up work in the Wayne County suburb of Lincoln Park, where he was sent by Gov. Rick Snyder after the governor declared a financial emergency there in July 2014.

“This is a great day, not only for the city of Lincoln Park but for the entire state of Michigan,” Snyder said in a statement Tuesday. “Brad has provided a shining example of how the system can work; first, collaborating with local leaders to address the city’s financial emergency, then working to enhance economic development to help ensure continued financial stability for Lincoln Park.”

Michigan’s emergency manager law enables the state to send experts with authority to set faltering cities right, sometimes through drastic measures. By far, Detroit was the largest city to be reformed under an emergency manager.

Since 2000, emergency managers also were sent in to run Allen Park, Benton Harbor, Ecorse, Flint, Hamtramck and Pontiac.

While no municipalities remain under state oversight, three school districts do: Detroit, Muskegon Heights and Highland Park.

In Lincoln Park, Coulter renegotiated city employee contracts, eliminated their ability to buy years of service — a pension sweetener — and terminated retiree health care and Medicare Part B reimbursements.

In addition, employees will not receive cash for unused sick days when they leave city government.

Coulter also handed down a two-year budget. Today, Lincoln Park has a surplus of nearly $187,000, compared to a general fund deficit of more than $1 million in 2014.

“Regardless if I was with him 100 percent of the time or not, I do think he did what was best for the city, what his job was asked for,” City Councilman Elliott Zelenak said Tuesday. “He had a tough job and I think he did his job really well.”

At Coulter’s request, Snyder appointed a receivership transition advisory board “to ensure a smooth transition to local control,” the governor’s office said. Transition boards aren’t required by law, but have become customary for cities moving away from emergency management.

Lincoln Park officials will run the city, but have to go through the transition board for major contracts “to make sure things don’t go off the rails,” Coulter said.

Mayor Thomas Karnes said city officials worked closely with Coulter to ensure Lincoln Park regained its financial footing. Now that the city “is in better shape now than it was when he came in,” the lifelong resident said, the goal is to continue that course while moving forward with more direct oversight.

“The people of Lincoln Park elected us to represent them and to lead their government, so I’d like to get back to doing that,” he said Tuesday. “I want everybody to know we’re ready to take the helm again and are looking forward to it.”

Despite its improved financial condition, Lincoln Park still faces challenges: between health care and pensions, retiree costs still account for about 40 percent of the city’s general fund budget. That number is “sustainable,” Coulter said, only if property values in Lincoln Park don’t fall any further.

At the height of the economic downturn, Lincoln Park lost one-third of its property tax revenue. It could take “a good 10 years” before property values return to what it once was, Coulter said.