DETROIT (AP) — Michigan Gov. Rick Snyder appointed six people Tuesday to conduct a 60-day review of Detroit's municipal finances and decide if the state should put an emergency manager in charge of the city's checkbook, the state Treasury Department says.
Department spokesman Terry Stanton said the team includes Treasurer Andy Dillon, who determined last week that Detroit's budget was off track and headed toward a crash.
The city now is operating under a consent agreement between Mayor Dave Bing and the Snyder administration designed to head off the appointment of an emergency financial manager.
"My administration has worked, and will continue to work in collaboration, with Mayor Bing and city officials to ensure a revitalized and successful Detroit," the Republican governor said in a statement. "However, given the financial crisis that continues to grip the City of Detroit, we must move quickly to ensure city residents have continued access to essential services they expect and deserve."
Bing said Tuesday's announcement was "no surprise."
"The state had indicated last week that it planned to appoint a financial review team," the Democratic mayor said Tuesday night. "My administration will continue to focus on my restructuring plan, in cooperation with the City Council, to hopefully eliminate the need for an emergency financial manager."
Bing has said he will lay off 400 to 500 city employees in the new year, roughly 5 percent of the workforce.
Detroit is billions of dollars in debt and has a budget deficit topping $200 million. It's been meeting payroll and paying bills from millions of dollars in bond money from a state-controlled escrow account.
The review team will operate under a 1990 state emergency manager law and must report its findings to the governor within 60 days. The governor also can ask for a quicker report or can extend the deadline by 30 days. The team is to reach a finding on whether a serious financial problem exists and, if so, whether "a satisfactory plan exists to resolve the problem," Stanton said. A new emergency manager law that the Legislature passed last week doesn't take effect until March.
Besides Dillon, the review team includes state Auditor General Thomas McTavish; Ken Whippel, board chairman of Korn/Ferry International; Darrell Burks, a senior partner with PricewaterhouseCoopers; Ronald Goldsberry of Deloitte Consulting; and Frederick Headen, a legal adviser for the state Treasury Department.
Tuesday's appointments follow Dillon's announcement Friday that his preliminary financial review determined Detroit was not on target to fulfill promises to the state that allowed the city to avoid having an emergency manager.
Detroit has been experiencing a fiscal meltdown for years.
"We strongly feel that the review team will not find anything different in the city's financial condition from what we had previously revealed to the state," Bing said.
An estimate in August projected a cash deficit of $62 million for the city by June 30, 2013. But an October estimate placed the projected deficit at $84 million, while November's had it at $122 million.
The cities of Benton Harbor, Pontiac, Flint, Ecorse and Allen Park currently are under emergency managers, as are the Muskegon Heights, Highland Park and Detroit public school districts.
Michigan's emergency manager laws: http://1.usa.gov/12nXwwA
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