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Infowire: If you're in a financially distressed community you need to talk to these guys

Jul 23, 2015

 Infowire fills the information gap and meets the news needs of families struggling to make ends meet. Get all Infowire alerts by texting INFOWIRE to 734-954-4539 or email infowire@michiganradio.org

**Michigan Radio reporter Lindsey Smith gave Infowire permission to edit and reprint her fantastic "reporter's notebook" about her experience with Michigan's Emergency Loan Board. This board has enormous power over any city or school district in serious financial trouble. 

It's been a busy week for Michigan's Emergency Loan Board. This un-elected state body just gave Pontiac schools about 10 million dollars, about a million and a half to Benton Harbor, and they might soon have power over the future of all of Wayne County.

Those are just a few of the places in Michigan in serious financial distress. Muskegon Heights, Buena Vista, Ecorse and Highland Park have also had their future determined, at least in part, by the Emergency Loan Board.

The main worry is that community voices won't be considered in these decisions because they don't have to be. The Emergency Loan Board is not elected. Here are some steps people in financially distressed communities can take to hold the Emergency Loan Board accountable.

How does the Emergency Loan Board get involved? 

Once the state determines there is a financial emergency in a school district or a city or county, the state has a much bigger say in how and when the budget should be balanced. In many cases, much more influence than  locally elected officials. 

In these cases, parents and citizens won't necessarily know what the Emergency Loan Board’s decisions mean to them until it’s already decided. Parents may not have important information to make choices for their kids, and weigh in on whether or not schools should close, or merge, or, as in the case of Muskegon Heights and Highland Park, get turned over to a charter company without much public input beforehand.

The Emergency Loan Board often works closely with a district’s emergency manger or consent agreement consultant, and other public officials that are not as accountable to the public because he or she is not elected. All of these consultants, emergency managers and members of the Emergency Loan Board are appointed by the Governor.

Can the Emergency Loan Board keep a school or city from going bankrupt?

The short answer is yes. It has incredible power to keep schools and municipalities out of bankruptcy court. It can lend tens of millions of taxpayer dollars – repeatedly – to schools that are going broke. It even has subpoena power. Most people don't want their districts or cities to go bankrupt, but most would also like a say in the plan and the tradeoff's involved in staying out of bankruptcy.

Loans from the board also aren't always enough to keep a district alive.  The Inkster schools got more than $12 million in June 2013, a month before the district dissolved. 

How will I know what the ELB is doing in my district?

The board has no webpage. Its meetings in Lansing are open to the public, but there is no schedule. Meetings aren't predictable.

Meeting minutes also aren’t available online, which is common for other public bodies. You can’t just go somewhere to see what the board has been up to lately.

Meeting notices are sent by email. But the Treasury doesn't have a way for citizens to get notified of when the ELB is meeting. If you want to know when a meeting is you'll need to get on the list for all press announcements by sending a request to mitreasury@govsubscriptions.michigan.gov. Bottom line, if Michigan’s Department of Treasury doesn’t want you to find out ahead of time what it's going to approve, you won’t know.

There’s very little transparency with the ELB. We’re not just talking about loads of taxpayer money; we’re talking about people’s futures. In some cases, we’re talking about a school district’s survival.  

But solving these financial emergencies take time. There’s a lot of opportunity to have your voice heard. If you like or dislike something happening in your school or town that’s in financial stress, tell the state too.

Who's on the ELB and how do I let them know what I think?

The Board has three members, all of them head state departments. They are state Treasurer Nick Khouri, David Behen from the state's budget department and Mike Zimmer from Regulatory Affairs.

Here's how to get in touch by phone or email:

Nick Khouri: (517) 373-3223, khourin@michigan.gov

David Behen: (517) 373-1004, Behend@michigan.gov

Mike Zimmer: (517) 373-1820, zimmerm@michigan.gov