Friday, December 02, 2011

Dillon Calls for State Review of Detroit's Finances

Boom, there it is.

Michigan Treasurer Andy Dillon today ordered a review of the finances of the city of Detroit, a preliminary step in what could lead to appointment of an emergency manager.

The anticipated move comes amid public opposition from Mayor Dave Bing and members of the Detroit City Council.

“While we have long hoped the mayor and city council would agree on a viable recovery plan, given the mayor’s description of the city’s financial condition and the prospect the city may run out of cash in mere months, it has become clear that a preliminary financial review is not only warranted but necessary,” Dillon said in a news release. “We must begin the review process, in the event the city does not develop a workable plan. The longer we wait to address Detroit’s financial problems, the more painful the eventual solutions become."

Per Paul Egan, here is what happens next:

• Takes up to 30 days and requires written notice

• Can be triggered in several ways. The law includes a catchall reason for ordering a financial review if the state treasurer detects "facts or circumstances ... indicative of municipal financial stress."

• Local elected and appointed officials must provide requested information.

If the financial review identifies "probable financial stress," the governor appoints a financial review team that has up to 60 days to perform a more in-depth study.

Follow the link for the rest. Here is the .pdf of the formal request, with Dillon's reasoning for ordering the review.

I'm guessing "financial stress" is a given, it's what they are going to do about it that is the real question. Long time Lansing veteran and former state Treasurer Bob Kleine doesn't think an EM could fix the problem anyway, due to lack of tax base and cuts to revenue sharing.

Good luck Detroit.

(Per Gongwer, add Inkster to the pile today too, but I'm guessing that won't get a lot of press)