Hamtramck 1 step closer to possible state takeover

Governor Snyder agrees financial emergency exist in Hamtramck

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HAMTRAMCK., Mich. - Gov. Snyder agreed with the state's assessment on the city of Hamtramck's financial situation. The declaration moves the city one step closer to a possible state takeover of operations in the Detroit enclave.

Snyder asked for a review of Hamtramck's finances in April after a request from city officials. In May a financial review team found Hamtramck to be in a state of financial emergency; Monday Snyder concurred with the team's findings.

View: Financial review team's report on Hamtramck finances

The five-member team said the projected deficit for the city of 22,000 is $3.3 million. In addition, the city has delayed making required monthly pension contributions to the municipal employee fund in order to manage a dwindling cash flow.

Read: Payless payday for Hamtramck city workers

The projected deficit exceeds 5 percent of the $16 million general fund budget to June 30.

What's next:

Hamtramck officials now have seven days to request a hearing on the governor's determination. A hearing has tentatively been set for June 11, in Lansing.

Following that hearing, or if no hearing is requested, the governor will either confirm or revoke the determination of a financial emergency.

If a financial emergency is confirmed, the state's newest emergency manager law then kicks in and the struggling city will have one of four options to choose from: a consent agreement; an emergency manager; a neutral evaluation process; or Chapter 9 bankruptcy.

Emergency managers now run Detroit, Flint, Pontiac and three other Michigan cities, plus three public school districts. Michigan took over Hamtramck in 2000 because of debt. State control ended in 2007.

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