State reveals names of Detroit finances review team

Team includes familiar state, Detroit leaders

Published On: Dec 27 2011 02:16:48 PM EST   Updated On: Dec 27 2011 05:28:01 PM EST

The state of Michigan on Tuesday released the names of the people who will review Detroit's troubled finances.

A preliminary review by the state found that the city had failed to adjust annual budgets in the face of declining revenues and/or increased expenditures, has recurring fund deficits of more than $100 million and failed to file an adequate or approved Deficit Elimination Plan. The state says the city has budgetary shortfalls that could lead to a negative cash balance as early as April, 2012.

The appointment of a financial review team does not ensure that a financial emergency will be declared or that an emergency manager will be appointed.

"My administration has worked – and will continue to work – collectively and collaboratively with Mayor Bing and city officials to ensure a revitalized, strong and successful Detroit," said Gov. Rick Snyder. "The mayor, city council and stakeholders are making some important
progress in developing a viable financial recovery plan for the city, but given urgent and time-sensitive financial issues facing Detroit and the need to ensure critical services continue to be provided to city residents, the next step simply necessitates the appointment of a financial review team. This review team is the right mix of expertise and backgrounds to tackle this very challenging job and ensure a thorough, objective and fact-based review."

Detroit Mayor Dave Bing released the following statement in response to the appointment of the review team:

"We will continue to fully cooperate with the state review process and the newly appointed financial review team," Bing said in the statement. "At the same time, my staff and I have worked through the holiday break with union leadership on my plan that seeks savings of $102 million for this fiscal year and $258 million in fiscal year 2012-13. We will continue to negotiate until we reach agreement to resolve the city’s financial crisis."

Review team members are:

Under P.A. 4 of 2011, a financial review team must report its findings to the governor within 60 days, unless a 30-day extension is requested and granted or the governor requests a quicker review. The review team must reach one of the following conclusions in its report: No or mild financial stress exists in the unit of local government; severe financial stress exists in the unit of local government; or, a financial emergency exists in the unit of local government.