State of Michigan releases Benton Harbor from its receivership

By Tony Wittkowski | Business Reporter | The Herald-Palladium

BENTON HARBOR — The Michigan Department of Treasury officially released the city of Benton Harbor from receivership Friday.

The state treasurer’s approval followed a recommendation made Thursday by members of the Benton Harbor Receivership Transition Advisory Board.

City officials will now manage internal operations and finances without oversight or approval from the R-TAB.

Gov. Rick Snyder released a statement with the news the treasury department – acting on the governor’s behalf – accepted the recommendation to end receivership,

“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,” Snyder stated. “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.”

Snyder added: “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.”

The state first got involved in Benton Harbor’s finances in August 2009, when the city manager requested a preliminary review of the city’s finances. At that time, the city had a general fund deficit of more than $2.3 million.

Then-Gov. Jennifer Granholm appointed Joseph Harris as emergency manager in April 2010, after a financial review team concluded a financial emergency existed in the city.

The R-TAB was among the last layers of the state government’s control over the city. The four-membered board was appointed by Snyder after former Emergency Manager Tony Saunders II vacated the position in March 2014.

Since the appointment of the R-TAB, Benton Harbor has improved its financial stability and posted its first operating surplus in more than a decade.

The R-TAB identified the following key accomplishments as a reason to lift the receivership:

• At the end of fiscal year 2015, the general fund balance increased by nearly $760,000.

• The city implemented several best practices, including the adoption of a fund balance policy, development of multi-year cash projections and adaption of annual objectives.

• Benton Harbor made payments of 110 percent of its annual required contribution to its pension fund to reach an 80 percent funding level.

Contact Tony Wittkowski at twittkowski@TheHP.com or (269) 932-0358. Follow him on Twitter: @tonywittkowski.

(Author’s Note: This article was originally published on July 2, 2016)

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