Official: Gov. to begin review of Detroit finances

December 1, 2011 - 5:10 PM

DETROIT (AP) — Detroit officials say Gov. Rick Snyder's office plans to begin a review of the city's troubled finances, a move that typically is the first step toward the state appointing an unelected emergency financial manager for a city.

The governor "signaled his intention that a financial review could begin as early as Friday," said Dan Lijana, spokesman for Detroit Mayor Dave Bing, who has said he does not want the state appointing someone to manage the city's finances.

Snyder spokeswoman Sara Wurfel told The Associated Press on Thursday that "the governor still has every hope of avoiding an emergency manager for the city of Detroit," but added that "the timing is becoming tougher, and the governor does have a responsibility to act if that can't happen."

Snyder had hoped Detroit officials would request a preliminary review so state officials could look more deeply into the city's finances and identify potential solutions that would avoid the need for a financial manager, she said. But asking for a review doesn't mean a financial manager will be appointed.

"We're still hoping that the mayor and the council can come together on a shared, viable solution" to Detroit's serious financial problems, Wurfel said.

She added that the review is "about people working together," not about going after Detroit.

Bing has been discussing the city's fiscal plight with community and union leaders and the City Council. He says Detroit is facing a $150 million budget deficit. A $45 million cash shortfall is projected by next June, and Bing has been seeking deeper pay and benefits concessions from unions to thwart a state takeover of city finances.

Bing plans to cut 1,000 jobs early next year to save about $14 million this fiscal year. Bing has said the layoffs will be strategic and the positions will be eliminated by Feb. 25. Some Council members have said they think more layoffs are needed.

Bing has submitted a $102 million savings plan for the current fiscal year to Snyder's office, but has yet to receive feedback on it from the governor, Lijana said.

A state law passed in March gives state-appointed financial managers more power when fixing the finances of municipalities and school districts. Michigan already has emergency managers in place in the Detroit public school system and four other cities.

Detroit's elected leaders — not Snyder — "need to make the tough decisions that will right our city," Democratic State Rep. Shanelle Jackson said Thursday in a statement.

"Democratically-elected government officials, workers, and stakeholders have the obligation to come to the table and make the necessary concessions to put Detroit on the right track and to keep control of our city," Jackson said.

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Associated Press writer Kathy Barks Hoffman in University Center contributed to this report.