State Approves Release of Benton Harbor from Receivership

State Approves Release of Benton Harbor from Receivership

From the Tribune Newswire

LANSING – After six years of state oversight, the Department of Treasury today released the city of Benton Harbor from receivership under Public Act 436 of 2012. The state treasurer’s approval followed a recommendation by members of the city’s receivership transition advisory board (RTAB). 

Effective immediately, city leadership will manage internal operations and finances without oversight by the RTAB.  Benton Harbor is once again governed by its city charter, which means city council resolutions and ordinances no longer need RTAB approval. 

Since the appointment of the RTAB, the city of Benton Harbor has achieved many short-term goals, increased operating efficiencies, and improved its financial stability.  The RTAB identified the following key accomplishments: 

  • At the end of fiscal year 2015, the General Fund balance increased by $759,130 from $2,321,261 in 2014 to $3,080,391.
  • The city has implemented many best practices, including adoption of a fund balance policy, development of multi-year cash projections, and adaption of annual goals and objectives.
  • The city has made payments of 110 percent of its Annual Required Contribution (ARC) to the Municipal Employees’ Retirement Systems (MERS) to reach an 80 percent funding level. 

“This is an important day for the citizens of Benton Harbor, the mayor, and city council who have all worked diligently to move the city from a financial hardship to a place of stability,” Gov. Rick Snyder said. “Benton Harbor is an example of a community where the emergency manager worked hand-in-hand with the local community to right-size the city and help stabilize finances. In the two years since the city left emergency management, local leaders have continued on the path of sound fiscal management and they are well-positioned for success going forward.”

Mayor Marcus Muhammad said: “On behalf of the city council and residents, I express my gratitude to the Receivership Transition Advisory Board for its professionalism in transitioning the city of Benton Harbor from emergency management to local control. I look forward to working with the Governor and the state Treasury Department to ensure financial solvency.” 

In August 2009, the Benton Harbor city manager requested a preliminary review of the city’s finances.  At that time the city had a general fund deficit of $2,381,293.  In 2010, a financial review team concluded that a financial emergency existed in the city. Then-Gov. Jennifer Granholm appointed Joseph Harris as Emergency Manager in April 2010.  Tony Saunders was subsequently appointed Emergency Manager by Gov. Snyder in February 2013.  On March 6, 2014, Saunders reported to Gov. Snyder that the financial emergency had been resolved and the RTAB was appointed.

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