State officials launching preliminary review of Detroit's finances
State Treasurer Andy Dillon announced today the state's intention to launch a preliminary review of Detroit's finances. The review will commence next Tuesday, according to Dillon's office. This post is being updated with information as it comes in.
Update 5:06 p.m.
MPRN's Laura Weber reports that State Treasurer Andy Dillon said he does not see bankruptcy as an option for Detroit.
“I don’t see that in the near-term, no, because if you look at the revenues coming into the general fund, it’s a fixable issue for the city,” said Dillon. “Now the longer-term debt may present an issue that we’ll have to figure out how to tackle down the road.”
Dillon said this is the first step in a review of Detroit’s finances and does not guarantee the city will be taken over by the state, but he said because Detroit is running out of money quickly, a review is time sensitive.
Mayor Dave Bing released this statement on the state's preliminary financial review a few moments ago:
"While unfortunate, this decision by Governor Snyder is not unexpected. We believe we have the right plan to address the City's fiscal crisis and we will continue to work with City Council, our unions and other stakeholders to achieve the necessary cuts and concessions, including pension, healthcare and work rule reform. I'm confident with yesterday's demonstration of solidarity and shared commitment that we will continue to make progress. We are committed to full cooperation with the Governor's fiscal team, who has had full access to the City's financial information and plan for months."
Update 2:49 p.m.
You can see a list of reasons why Michigan State Treasurer Andy Dillon feels a preliminary review of Detroit's finances is in order. Dillon released a "Detroit Informational Memorandum."
In it, Dillion cites that Detroit has run deficits exceeding $100 million dating back to 2005.
Annual debt service requirements in Detroit for 2010 exceeded $539 million, according to the memo.
A day after Detroit Mayor Bing stood with other city leaders to try to head off an impending state review of the city's finances, the Governor's office announces the review:
From MPRN's Rick Pluta:
State Treasurer Andy Dillon says the state will send in teams to review the finances of Detroit and Inkster. It is the first step in the process to name emergency managers to run the cities. But Dillon says his hope is that early intervention will help avoid that. Detroit city leaders including Mayor Dave Bing have spoken out against a state review.
In a letter to Mayor Bing and City Council President Charles Pugh, State Treasurer Andy Dillon cited the mayor and city council's ongoing inability to work cooperatively to financially manage the city; Detroit's recurring operating deficits; and the likelihood that the city will run out of cash in the spring.