Financial emergency declared in Benton Harbor - Fox 28: South Bend, Elkhart IN News, Weather, Sports

Financial emergency declared in Benton Harbor

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The state of Michigan tells one Michiana city, step aside and let us figure it out.  That's what Governor Jennifer Granholm told the city of Benton Harbor today as she announced a new emergency financial manager.  It culminates years of reviews and investigations into the city's finances.

Granholm released a statement today outlining the findings of a preliminary review in August 2009, which showed Benton Harbor had general fund operating deficits, failed to timely file annual financial audit reports, and failed to distribute property taxes in a timely manner.

Now the Governor says, effective immediately, all city leaders must to report to former Detroit Chief Financial Officer Joseph Harris.  Harris is a certified public accountant by trade.  He's currently a professor at Wayne State University teaching governmental accounting. 

No word yet on when Harris will officially arrive in Benton Harbor.  But when he does, he'll have power to hire and fire, renegotiate labor contracts, and sell city-owned property.   A Michigan Treasury Department spokesperson told Fox 28 today that the mayor and city council members will have their salaries cut by 50 percent. 

Thursday's announcement comes as no surprise to many of the city of Benton Harbor's leaders.

This is the 8 page letter Governor Granholm wrote to Benton Harbor Mayor Wilce Cooke last week explaining why the state will be taking over the city's financial matters.  But problems with education, unemployment, and race relations already had the city under the spotlight. 

"We are at the point to where the Governor has decided to step in," said Benton Harbor Mayor Pro Tem Marcus Muhammad.           

Michigan has declared Benton Harbor a financial emergency and appointed a financial manager, Joseph Harris, after an investigation showed the city has mismanaged pension plans, cash revenues, and a slew of other financial mishaps. 

"This is a tool the state and city can use to increase its future financial stability," said Cornerstone Alliance President Wendy Dant Chesser.           

The new manager will have power over city leaders like Mayor Pro Tem Marcus Muhammad. 

"With the financial manager coming in with a failing budget it can put people on pins and needles as it relates to our jobs," said Muhammad.           

At this point, no city leaders have been fired, but wages are expected to drop.  But Benton Harbor natives say finances are just the tip of the iceberg. 

"There's no jobs for people to work there's not a lot of activities for young children," said Benton Harbor's Dillondria Barnes.           

Job creation is the goal of Cornerstone Alliance.  President Wendy Dant Chesser says their success depends on Harris's plans. 

"The state mandate goal is to create a financial management plan for the city.  Our goal is to portray a public image of Benton Harbor as a financially stable and good place to do business," said Cornerstone Alliance President Wendy Dant Chesser.           

Residents want jobs and better schools. 

"The state needs to come in and get the parents more involved in activity with the kids," said Benton Harbor Reaner Gibbs. 

"Get the school better so when the other kids come up they'll have a better school to come through," said Benton Harbor's Geraldena Gordon. 

Muhammad says bringing in Harris is a good start to a brighter Benton Harbor future.

"If we can provide summer jobs, if we can provide recreation and activities along with fixing the finances I think that will get the city on good footing,"' said Muhammad. 

Benton Harbor is not the first city to have this dubious honor.  The latest four, Flint in 2002, Three Oaks in 2008, and most recently, Pontiac and Ecorse in 2009 were all declared to be financial emergencies. 

Benton Harbor Mayor Wilce Cooke declined to comment on the governor's decision Thursday.  His office says he'll release a statement sometime next week.

Posted by: Nadia Crow

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