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Detroit Lions president Matt Millen, center, makes his past the reporters in the hallway of Oakland County Circuit Court in Pontiac Wednesday afternoon. The Lions and the city of Pontiac are disputing their lease at the Silverdome in Pontiac. Judge Fred Mester ordered both side into court today to try to resolive this matter before it goes to trial.
Three City of Pontiac trucks plow the empty parking lot on Huron at Woodward, while residental streets go untouched. The Oakland Press/TIM THOMPSON
Michael Willia address City of Pontiac Mayor Willie Payne during a election night party at the Pontiac Golf Course after considing defeat to candidate Clarence Phillips on election night Tuesday November 8, 2005. Clarence Phillips defeated mayor Willie Payne.
City of Pontiac Wasterwater Treatment Plant on Martin Luther King, Jr. Blvd in Pontiac. The Oakland Press/TIM THOMPSON
John Kissick, center, director of operations at the Pontiac Silverdome leads a group during a walking tour of the faculity on Monday. The city of Pontiac and Pontiac Silverdome officals are soliciting offers for the property, since the Detroit Lions vacated the property for their new $315 million indoor venue located in down town Detroit.
Incumbent city of Pontiac Mayor Walter Moore recieves a kiss from his wife Daisy after recieving polling results from his Auburn road campaign office.
Pontiac councilman Charlie Harrison III (left) listens as collegue Susan Shoemaker gives her reaction to the situation in the treasurers office of the City of Pontiac during a press conference at the prosecutor's office Thursday December 12, 2002. Three individuals of the treasurers office have been charged with corruption after a seven month long investigation.
Pontiac Elect Mayor Clarence Phillips addresses the crowd after he won the city of Pontiac mayoral election, Tuesday, November 8, 2005, at the UAW Local 653 Hall in Pontiac, Mich.
Garbage pilled up o Pensacola street in Pontiac. The City of Pontiac is running behind on it's trash removal.
This is Nancy O'Neal, who lives next door to this home being demolished at 46/48 Michigan Ave. in Pontiac. It's is one of several homes that are slated to be torn down in the City of Pontiac over the next few days. The Oakland Press/DOUG BAUMAN
Pontiac Emergency Manager Michael L. Stampfler wants Oakland County Executive L. Brooks Patterson to consider ?merging? the financially troubled city into the county.
A letter sent to Patterson Wednesday asks for a meeting to discuss the ?radical? option of merging Pontiac into or with Oakland County.
The letter was obtained Friday by The Oakland Press.
?I realize this is perhaps a radical concept, but I hope the positive consequences associated with such an initiative may be carefully weighed against the negatives of continuing the present situation,? Stampfler wrote.
In the letter to Patterson, Stampfler also said he?ll be making recommendations shortly to deal with the city?s massive debt problems, including municipal bankruptcy.
Patterson, however, said merging the city into the county isn?t an option, nor can the county afford to bail out the number of financially ailing cities in Oakland County.
He said it?s the state that will have to come up a process to deal with failing cities.
?We?re all creatures of state law, constitutional law, and where does that law come from?? Patterson said. ?It comes from Lansing; it comes from the Legislature.
?I suggest to you that this is going to be a state obligation to address problems like this, because this is going to happen all around the state,? he said, ?and the state better prepare a response to a city or township or school district that goes bankrupt, because this won?t be the first and it won?t be the last.
?So I think that the state has the primary responsibility to face up to this situation and begin to put some safety nets in place,? Patterson said. Continued...
Pontiac, the Oakland County seat, was first settled in 1818 and became a city in 1861.
It later became the birthplace for General Motors? Truck and Bus and Pontiac Motors divisions.
In the booming years following World War II, the city grew along with the auto industry. Its decline came in the busing controversies of the 1970s, rising taxes since to maintain services and the exodus of downtown businesses to shopping malls or surrounding communities with lower tax rates.
Once the home of the Detroit Lions and the host of World Cup soccer and the Super Bowl, today the city is mired in debt, beset with home foreclosures and trying to stay afloat with a declining tax base and cuts to state shared revenue.
Stampfler?s letter to Patterson details just how deep the city?s financial woes have become.
Stampfler projects a deficit by June 30, 2012, of $12.5 million.
?To place this number in perspective, if the city were to lay off every current employee paid from the general fund, the savings would amount to $11 million, still over $1.5 million short of the accumulated deficit,? Stampfler wrote to Patterson.
That deficit is projected to grow to $24 million in 2013.
Stampfler also says in his letter that current trends mean deficits in other city funds, such as the Downtown Development Authority, Parking Fund, Sanitation Fund and Water Fund.
But Patterson says absorbing the city into the county isn?t legally an option. However, the city could give up its status as a municipal corporation and revert to an unincorporated township. Continued...
As an unincorporated township, it would be subject to annexation by the surrounding municipal corporations of Waterford Township, Auburn Hills, Sylvan Lake and Bloomfield Township.
But the liabilities of the city?s infrastructure ? roads, water and sewers, plus the growing number of vacant houses ? would remain.
The question then becomes, ?Who would want it??
The possibility of a municipal bankruptcy by Pontiac is also uncharted territory. There haven?t been any in Michigan, and there was no indication Friday how Gov. Rick Snyder would deal with such a request.
Procedurally, the city ? meaning Stampfler, who has sole authority over the city?s affairs ? has to recommend municipal bankruptcy to the governor, says Patterson, and it's up to the governor, or his designee, to grant or deny the request.
A municipal bankruptcy would affect Oakland County. The county has long touted its AAA bond rating, the highest available, as evidence of sound financial management.
A high bond rating means lower interest rates and costs when the county sells bonds to finance capital improvement projects, primarily water and sewer projects, for municipalities and for itself.
The county bond rating is sure to be downgraded, resulting in higher borrowing costs.
From the state?s perspective, perhaps, allowing Pontiac to proceed with bankruptcy could open the floodgates for more such requests, further roiling municipal bond markets.
Also, says Patterson, while it is in far better financial shape than most governments, Oakland County has continually made its own budget cuts and adjustments as property tax revenues have declined from falling property values. Continued...
More Photos
Click thumbnails to enlarge
Detroit Lions president Matt Millen, center, makes his past the reporters in the hallway of Oakland County Circuit Court in Pontiac Wednesday afternoon. The Lions and the city of Pontiac are disputing their lease at the Silverdome in Pontiac. Judge Fred Mester ordered both side into court today to try to resolive this matter before it goes to trial.
Three City of Pontiac trucks plow the empty parking lot on Huron at Woodward, while residental streets go untouched. The Oakland Press/TIM THOMPSON
Michael Willia address City of Pontiac Mayor Willie Payne during a election night party at the Pontiac Golf Course after considing defeat to candidate Clarence Phillips on election night Tuesday November 8, 2005. Clarence Phillips defeated mayor Willie Payne.
City of Pontiac Wasterwater Treatment Plant on Martin Luther King, Jr. Blvd in Pontiac. The Oakland Press/TIM THOMPSON
John Kissick, center, director of operations at the Pontiac Silverdome leads a group during a walking tour of the faculity on Monday. The city of Pontiac and Pontiac Silverdome officals are soliciting offers for the property, since the Detroit Lions vacated the property for their new $315 million indoor venue located in down town Detroit.
Incumbent city of Pontiac Mayor Walter Moore recieves a kiss from his wife Daisy after recieving polling results from his Auburn road campaign office.
Pontiac councilman Charlie Harrison III (left) listens as collegue Susan Shoemaker gives her reaction to the situation in the treasurers office of the City of Pontiac during a press conference at the prosecutor's office Thursday December 12, 2002. Three individuals of the treasurers office have been charged with corruption after a seven month long investigation.
Pontiac Elect Mayor Clarence Phillips addresses the crowd after he won the city of Pontiac mayoral election, Tuesday, November 8, 2005, at the UAW Local 653 Hall in Pontiac, Mich.
Garbage pilled up o Pensacola street in Pontiac. The City of Pontiac is running behind on it's trash removal.
This is Nancy O'Neal, who lives next door to this home being demolished at 46/48 Michigan Ave. in Pontiac. It's is one of several homes that are slated to be torn down in the City of Pontiac over the next few days. The Oakland Press/DOUG BAUMAN
Pontiac Emergency Manager Michael L. Stampfler wants Oakland County Executive L. Brooks Patterson to consider ?merging? the financially troubled city into the county.
A letter sent to Patterson Wednesday asks for a meeting to discuss the ?radical? option of merging Pontiac into or with Oakland County.
The letter was obtained Friday by The Oakland Press.
?I realize this is perhaps a radical concept, but I hope the positive consequences associated with such an initiative may be carefully weighed against the negatives of continuing the present situation,? Stampfler wrote.
In the letter to Patterson, Stampfler also said he?ll be making recommendations shortly to deal with the city?s massive debt problems, including municipal bankruptcy.
Patterson, however, said merging the city into the county isn?t an option, nor can the county afford to bail out the number of financially ailing cities in Oakland County.
He said it?s the state that will have to come up a process to deal with failing cities.
?We?re all creatures of state law, constitutional law, and where does that law come from?? Patterson said. ?It comes from Lansing; it comes from the Legislature.
?I suggest to you that this is going to be a state obligation to address problems like this, because this is going to happen all around the state,? he said, ?and the state better prepare a response to a city or township or school district that goes bankrupt, because this won?t be the first and it won?t be the last.
?So I think that the state has the primary responsibility to face up to this situation and begin to put some safety nets in place,? Patterson said.
Pontiac, the Oakland County seat, was first settled in 1818 and became a city in 1861.
It later became the birthplace for General Motors? Truck and Bus and Pontiac Motors divisions.
In the booming years following World War II, the city grew along with the auto industry. Its decline came in the busing controversies of the 1970s, rising taxes since to maintain services and the exodus of downtown businesses to shopping malls or surrounding communities with lower tax rates.
Once the home of the Detroit Lions and the host of World Cup soccer and the Super Bowl, today the city is mired in debt, beset with home foreclosures and trying to stay afloat with a declining tax base and cuts to state shared revenue.
Stampfler?s letter to Patterson details just how deep the city?s financial woes have become.
Stampfler projects a deficit by June 30, 2012, of $12.5 million.
?To place this number in perspective, if the city were to lay off every current employee paid from the general fund, the savings would amount to $11 million, still over $1.5 million short of the accumulated deficit,? Stampfler wrote to Patterson.
That deficit is projected to grow to $24 million in 2013.
Stampfler also says in his letter that current trends mean deficits in other city funds, such as the Downtown Development Authority, Parking Fund, Sanitation Fund and Water Fund.
But Patterson says absorbing the city into the county isn?t legally an option. However, the city could give up its status as a municipal corporation and revert to an unincorporated township.
As an unincorporated township, it would be subject to annexation by the surrounding municipal corporations of Waterford Township, Auburn Hills, Sylvan Lake and Bloomfield Township.
But the liabilities of the city?s infrastructure ? roads, water and sewers, plus the growing number of vacant houses ? would remain.
The question then becomes, ?Who would want it??
The possibility of a municipal bankruptcy by Pontiac is also uncharted territory. There haven?t been any in Michigan, and there was no indication Friday how Gov. Rick Snyder would deal with such a request.
Procedurally, the city ? meaning Stampfler, who has sole authority over the city?s affairs ? has to recommend municipal bankruptcy to the governor, says Patterson, and it's up to the governor, or his designee, to grant or deny the request.
A municipal bankruptcy would affect Oakland County. The county has long touted its AAA bond rating, the highest available, as evidence of sound financial management.
A high bond rating means lower interest rates and costs when the county sells bonds to finance capital improvement projects, primarily water and sewer projects, for municipalities and for itself.
The county bond rating is sure to be downgraded, resulting in higher borrowing costs.
From the state?s perspective, perhaps, allowing Pontiac to proceed with bankruptcy could open the floodgates for more such requests, further roiling municipal bond markets.
Also, says Patterson, while it is in far better financial shape than most governments, Oakland County has continually made its own budget cuts and adjustments as property tax revenues have declined from falling property values.
?I?m in no position to come in on the white horse and say, ?I can save the city, here?s the money bags to make it happen,?? Patterson says. ?These are some very serious issues confronting not only the city of Pontiac, but all of us in government.
?Who picks up the pieces when a city implodes? We?re going to have to find out in the next few months.?
Here is the city's proposed budget:
Source: http://www.theoaklandpress.com/articles/2011/06/10/news/doc4df237ec74c25918823511.txt
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