Hot Topic: Emergency Financial Managers

The recent and ongoing water crisis in Flint, Michigan has resulted in the term ‘emergency manager’ being used quite often in relation to this incident – but not in a way we are used to.  Instead of speaking of a profession or position that is concerned with coordinating resources for disaster preparedness, response, and recovery; they are instead speaking of an emergency financial manager.  An emergency financial manager is someone who is, as I understand it, appointed by state government when a jurisdiction goes into receivership (i.e. they are bankrupt).  This ABC news article provides some background of the system.

Unfortunately, there are a number of documents out there that refer to these emergency financial managers as emergency managers.  To be honest, much of the public doesn’t have a good understanding of what emergency managers do, and this certainly lends to mucking that up even further.  This link has some explanation of what an emergency (financial) manager should be and the laws under which they are authorized.

Last week, the International Association of Emergency Managers (IAEM) published a press release which pointed out this difference and urged a more careful use of these terms.  The release can be found here.

While I applaud IAEM’s effort, I think they need to continue this further.  The term ‘emergency manager’ seems to be used in place of ‘emergency financial manager’ in government documents, which are the source documents used by the media and others.  I would urge IAEM to use its lobby power within the states which have these laws and regulations to ensure that the proper terminology is used, encouraging amendments to these documents as necessary.  Being soft handed doesn’t always work, and change won’t often happen unless it is more strongly encouraged.

© 2016 – Timothy Riecker, CEDP

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4 thoughts on “Hot Topic: Emergency Financial Managers

  1. The other issue is that this is a Michigan-only problem. As far as I know, it is the only state that has a system for a fiscal takeover of a local government. And then they choose a confusing title that is already in use for another profession. I still find it hard to belive that nobody in the state legislature caught this as the bill was being drafted. They actually have staff people who are supposed to make sure this kind of stuff doesn’t happen. Sigh.

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