10 Reasons Why Benton Harbor’s Emergency Financial Manager Should be Terminated

Michigan’s Gov. Snyder and state legislature are trying to cook up another way to continue the reign of emergency manager dictators now that the people have voted them down.

The following list details how the Benton Harbor EFM, Joseph L. Harris, has worked to take down the city.  And he’s backed by the governor 100%.

–Further details will be discussed at the November 19, 2012 Benton Harbor City Commission meeting. 

10.  Inaccurate & deceitful communications: Mr. Harris has repeatedly proclaimed in public meetings, to the media, to elected leaders and staff, and to state officials that the City of Benton Harbor had a “Balanced Budget & Cash Surplus.”  The 2011 Audit recently revealed that the city actually had a budget deficit of approximately $565,000 dollars under Mr. Harris’ leadership in 2011.  Meanwhile city contractors and/or vendors are not being paid in a timely fashion.  Mr. Harris has either (A) intentionally deceived the citizens and stake holders or (B) his ignorance regarding the true fiscal condition of the city confirms his incompetence.

9.  City sued due to non-payment: Mr. Harris negotiated and executed a very poor contract with Benton Township without input or conversation with city executive senior staff, elected leaders, or key community stake holders and/or customers.  The contract (A) forfeited in excess of three hundred thousand dollars of receivables due to the City of Benton Harbor from Benton Township while (B) agreeing to make monthly payments to the township that are not fiscally cost prohibitive based upon water revenues.  Mr. Harris signed this agreement and accepted a settlement of approximately $300,000 dollars for a debt owed of more than $700,000.  He denied the monies were owed, then agreed to a meeting with Benton Township officials to discuss the matter and at that meeting it was disclosed that Mr. Harris had settled the matter for less than fifty cents on a dollar.  It was also disclosed that he accepted and deposited a check from Benton Township that he did not remember.  All of this occurred while the he failed to increase the water rates in a timely manner as required according to the City’s State Bond Agreement.  Benton Township is now suing for the unpaid portion of this terribly suspect contract.

8.  Gross Fiduciary Negligence: Mr. Harris failed to exercise the City’s rights under the terms and conditions of the HUD 105 Business Development Loan program contract to collect the nearly $500,000 dollars in loan defaults accrued by three companies. Mr. Harris failed to take any legal remedy to collect the unpaid loans while agreeing to a settlement to pay the defaulted loan balances back to the federal government 100% plus interest and penalties.  As per the HUD contract Mr. Harris could have (A) sued the companies in default, (B) placed liens on the company’s property.  There were other legal remedies available under Michigan state law that Mr. Harris could have pursued, yet refused to.  Consequently because of Mr. Harris’ negligence these companies were able to liquidate and sale real property and other assets and keep 100% of the proceeds without repaying a single dollar to the City of Benton Harbor on what is still a pending outstanding obligation.  One of the companies sold property to Cornerstone Alliance for an amount sufficient to repay the City the outstanding 105 loan balance in full.

7.  Wasteful spending: Mr. Harris has unilaterally decided to squander limited city resources during this fiscal crisis on frivolous and unnecessary items such as (1) I love Benton Harbor souvenir cups and T-Shirts, (2) Ice Rinks, (3) Ice skates, (4) unused vehicles, (5) furniture, (6) remodeling, (7) playground equipment (8) water fountains, (9) excessive raises and salary increases, and much more.  All though Mr. Harris is required by law to provide financial reports regularly, City officials have been unable to secure any aging reports that substantiate or confirm the magnitude and/or depth of the wasteful spending and delinquent bill payment.  Mr. Harris’ refusal to comply with Public Act 4 and provide the types of period and critical financial reports is completely unacceptable and a clear abuse of power.

6.  Negligent Management of NSP Grant Funding: Prior to Mr. Harris’ arrival the City was the recipient of a NSP grant of nearly $4 million dollars.  NSP was created to (A) clean up blighted neighborhoods, (B) stimulate local & minority small business contracting and (C) housing development and (D) create jobs under the HUD Section 3 program.  Mr. Harris abdicated, relinquished and/or forfeited the City’s moral and contract obligations to Harbor Shores, Cornerstone Alliance and/or Michigan Works.  These three entities are amongst the City’s wealthiest and most privileged people and/or companies in Benton Harbor and surely were not the type of people or organizations NSP was intended to help.  Mr. Harris placed the City grant in a “use it or lose it” situation regarding the NSP funding by failing to administer, implement and obligate the grant funds in a timely manner. Consequently, at the zero hour the decision was made to grant the funds to the wealthy and to complete Harbor Town and the Fire House developments both owned and managed by Corner Stone Alliance.  Neither project is expected to produce any meaningful sustainable jobs or any significant affordable housing for the City of Benton Harbor or it’s residents.

5.  The Closing of 200 Paw Paw (Carl Brown Economic Development Center): It is unconscionable that during the biggest economic boom the City of Benton Harbor has seen in 50 years the city economic development center and incubator is closed.  There were more than one dozen small, local, minority businesses prepared to lease 100% of the facility.  The city is able to provide Community Development Block Grant (CDBG) funding to each small business sufficient to cover their annual budgeted rent requirements for the year, thus making the facility operationally and fiscally viable.  Therefore, the City had the ability to incubate businesses, create jobs, and sustain the operations of 200 Paw Paw 100% with city CDBG grant funding, yet Mr. Harris chose to close the facility.

4.  Failure to collaborate with elected leaders regarding the Community Benefits Package (CBP) grant funding: Not only has Mr. Harris failed to collaborate with the city commission, he has shirked in providing transparency and accountability. The entire process has become politically toxic. Mr. Harris’ unilateral attitude has caused embarrassment to Whirlpool Corporation and the City of Benton Harbor.

3.  Political liability and antagonism: Mr. Harris is condescending and confrontational in his communication style which has alienated critical elected leaders, corporate leaders, tax payers and other key stake holders in Berrien County.  Mr. Harris has fueled a new era in Benton Harbor’s fiscal and cultural isolation.  The most recent evidence of his alienating and antagonist style is his refusal to participate in the Berrien County CEO monthly meetings.  This forum is not only a critical exchange of ideas and/or resources, it is an opportunity to mend the social fiber of local municipal governments.  Mr. Harris has caused the relationships with other municipal leaders and elected officials in Berrien County to become strained, divisive, and counterproductive. 


2.  Fiscal Failures: Mr. Harris has had a multitude of fiscal failures since his arrival to Benton Harbor.  The most recent and perhaps most significant was his failure to post the city tax mileages on the November 2011 ballot for resident vote and approval.  This error of omission will likely create an opportunity lost for the City of Benton Harbor in excess of a million dollars.
Mr. Harris is now attempting to illegally impose taxes on the resident of Benton Harbor because of his gross negligence.
Does an Emergency Manager have the authority to impose taxes?
Ans: No. Neither an Emergency Financial Manager, nor the Local Emergency Financial Assistance Loan Board, have the power to impose taxes, over and above those already authorized, without approval at an election of a majority of qualified electors voting on the question.
The EFM does not have the authority to impose a Special Assessment. This is a classic case of Taxation without representation. The people already voted NO to the mileage renewal. This is another colossal mistake being executed as a result of horrific management.

1.  Failure to prepare and/or train local elected leaders to competently manage Benton Harbor:

The number one reason Mr. Harris is clearly not the professional for the Emergency Financial Manager position is based upon his well-publicized and absolute refusal to work with the City’s elected officials.  How do you profess your desire to put the city back on solid fiscal ground and simultaneously refuse to work with the people tasked with sustaining the operations after your departure?  Mr. Harris has resorted to unprofessional insulting remarks to elected leaders and staff.  Engaging, training and supporting local elected leadership should be a mandatory responsibility of an EFM.  Bringing the local leadership to competency and consensus is on the City’s critical path to recovery.

Since Mr. Harris arrived in Benton Harbor the city operating deficit, list of unpaid payable and pension(s) plan deficits have increased significantly.    Elected leaders, citizens, and stake holders are all getting less information than they ever have received from the city finance department. The information that has been received has proven to be largely false and/or inaccurate.
Several lawsuits and unpaid vendors have now surfaced. The staff morale is at an all-time low. Staff competency and training is nearly non-existent.  Relationships with neighboring municipalities and corporate leaders have been severely strained.  Public procurements and new hires processes in city government under Mr. Harris’ leadership have consistently violated state and federal regulation.  Mr. Harris has manipulated public procurements and hiring by lowering standards and qualifications to justify his personal preferences and selections.  Many qualified applicants and candidates for Senior Executive Staff positions have been ignored and/or rejected due to Mr. Harris’ personal preferences.

If the officials in Lansing truly have Benton Harbor’s best interests at heart, they must remove Joe Harris immediately for negligence, false statements, federal & state procurement violations, increasing the budget deficit, failure to act on correcting the pension deficits, and default in duty.

Benton Harbor should return to the power of democratic self-rule, just as “free” people the world over experience government.  Benton Harbor has had enough of a governor-imposed, grossly incompetent dictator.

Respectively submitted,

Marcus Muhammad
Commissioner-at-Large
mmuhammad@thecityofbentonharbormi.gov

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