Hello turmoil

With voters rejecting emergency manager law, who the heck's in charge here?

Nov 21, 2012 at 12:00 am

Voters went to the polls and there issued their decision: The state's controversial emergency manager law needed to be struck down.

It wasn't exactly what you'd describe as a close call. Some 53 percent of those casting ballots voted to repeal what was officially known as Public Act 4.

But if you thought that referendum would eliminate any confusion regarding who is calling the shots in Michigan's most financially distressed cities and school districts, we have a news flash for you:

It didn't.

In response to a lawsuit filed by Highland Park School Board member Robert Davis, a three-member panel on the state Court of Appeals ruled last week that the predecessor to PA 4 has been reinstated. Davis is a controversial activist who has challenged several aspects of the emergency manager laws.

That 1990 law, known as PA 72, is far less sweeping than the law voters just repealed. However, even the scaled-back law is opposed by a number of unions, public officials and activists. Which is why Davis went to court seeking the removal of Roy Roberts, previously the emergency manager and now the emergency financial manager for Detroit Public Schools.

In addition to Roberts, state Treasurer Andy Dillon declared that the seven other emergency managers in cities such as Flint, Pontiac and Benton Harbor would retain authority as emergency financial managers with the authority granted them by PA 72.

Davis argued before the Court of Appeals that once a law has been struck down — as PA 72 was when the Legislature, at the behest of Gov. Rick Snyder, passed PA 4 — it can't automatically be reinstated.

The Court of Appeals decided that the "anti-revival" statute Davis relied upon when making his case didn't apply because it made no reference to "statutes that have been rejected by referendum," as PA 4 was.

The appeals court is in line with an opinion issued by Michigan Attorney General Bill Schuette in August, when PA 4 was suspended after it was placed on the ballot.

But the matter is far from settled.

Davis promised to appeal last week's ruling to the Michigan Supreme Court.

In addition, there are two other lawsuits challenging the appointment of emergency financial managers following the rejection of PA 4 by voters. One of those suits, brought by the Stand Up for Democracy coalition that led the drive to have PA 4 repealed by voters, is scheduled to be heard by an Ingham County judge in early December.

There's also a similar lawsuit filed by members of the Flint City Council that is supposed to go before a Genesee County Circuit Court judge, also in December.

Several attorneys we talked with involved in suits opposing the EM law say the Court of Appeals erred when it ruled against Davis.

That position will be tested in both the Genesee and Ingham County cases.

And if the supremes decide to put the Davis appeal on an extremely fast track and hear his case before decisions are handed down in the other two cases, it is expected that lawyers representing those plaintiffs will seek to intervene so they can make arguments of their own.

In the meantime, Gov. Snyder has made it clear that he expects the Legislature to craft a new emergency manager law, perhaps during its lame-duck session. But, in talking with reporters following the election, he made it clear that caution would have to be exercised. 

It is not good politics to spit in the eye of voters who have just made their sentiments clear.

Mlive quoted the governor saying, "... what we need is a law first of all that is developed on a bipartisan basis in Lansing, not developed by one party to suit its agenda and then rammed through the Legislature — and a law that involves local folks being part in the process and not simply sending in an appointed manager who has a right to push people out of office and take control of a city or school district."

Snyder also acknowledged that, without PA 4, "the probability of municipal bankruptcies could increase, because that could really be the only option left."

"I still believe there could be a lot of negative consequences to municipal bankruptcy," he told reporters, "particularly given the track record and history of that, particularly if you look at places like California."

As if all this weren't chaotic enough, there's the issue of the consent agreement signed by the city of Detroit.

Much of that agreement was based on language contained in PA 4. Now that voters have rejected that law, is the consent agreement still valid?

Last week, the financial advisory board created as a part of that consent agreement reportedly met behind closed doors with Mayor Dave Bing, several Detroit council members and City Attorney Krystal Crittendon. 

Following that meeting, according to the Detroit News, board chairwoman Sandra Pierce said, "The Financial Stability Agreement remains intact and enforceable." 

Later in the week, Crittendon met with council in another closed-door session to discuss her opinion regarding the legality of the consent agreement. Given the fact that she previously tried, unsuccessfully, to have it nullified by the courts, we'd be more than a little surprised if she had told the council that she now thinks all aspects of it are fully enforceable.

But that's just a guess.

All we know at this point is that, when it comes to anything connected with PA 4, no one knows anything for certain.

News Hits is written by Curt Guyette. Contact the column at 313-202-8004 or [email protected].