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After 4 years of state oversight, Benton Harbor’s financial emergency is over

Main Street in Benton Harbor after the march.
Lindsey Smith
Michigan Radio
Benton Harbor was once called 'ground zero' in the fight over the state's emergency manager law.

The city of Benton Harbor’s financial emergency is over. That’s what the city’s emergency manager is reporting to Gov. Rick Snyder today.

Emergency manager Tony Saunders says the deficit has been eliminated, the city is making substantial contributions to its pension fund, and because of the new emergency manager law, there will be a system in place to transition the city back to the control of locally elected officials.

Benton Harbor has been under state control for nearly four years.

Saunders says the city is projecting a $1.9 million operating surplus in its two-year budget adopted this week. The city’s 2009 fiscal year deficit was nearly $2.4 million.

The city transitioned its pension fund to the Michigan Employee Retirement System. When Benton Harbor was taken over, the city owed close to $4 million to its employee pension systems. Saunders says the city paid $1.2 million to the system already this fiscal year. He says the fund is on track to be 80% funded within 10 years.

Saunders’ final executive order will require heads of all city departments to report to the newly hired city manager. The city charter currently requires department heads to report individually to the elected city commission.

He’ll also order any budget amendment the city commission approves to be approved by a transition team appointed by the governor and the state treasurer. Any money from assets the city sells will be directed to the pension system until it is 80% funded.

Gov. Snyder will have to review and agree with Saunders’ recommendation that the financial emergency is over. If he does, Snyder will then appoint a Transition Advisory Board that will help with the transition over the next year.

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