Report: Detroit facing appointment of an emergency financial manager

Dec 5, 2012

Update 2:30 p.m.

Darren Nichols and Leonard Fleming of the Detroit News also report state officials are warning city leaders about the potential appointment of an emergency financial manager.

Dillon, a top administration source said, has spoken to Mayor Dave Bing personally about the movement toward an emergency financial manager. Other city leaders have been approached and will continue to be contacted throughout the day, the source said.

The News reports a spokesman has confirmed the meetings took place this morning: 

"The Treasurer has heard growing concerns, from his discussions with members of the Financial Advisory Board and others in the city, about the city's near-term ability to meet its financial obligations and its long-term viability," his spokesman Terry Stanton said in a released statement.

"While we continue to work collaboratively with the city to move it forward, the EFM option cannot be taken off the table. As the Treasurer has noted many times, delaying reforms and tough decisions only promises to make eventual solutions more difficult and painful."

1:58 p.m.

Matt Helms of the Detroit Free Press quotes anonymous sources reporting that State Treasurer Andy Dillon is apparently issuing an ultimatum to Detroit's Mayor and City Council - "implement reforms immediately or risk appointment of a manager."

Helms reports his sources say Dillon has been discussing who would be named to the position and the roles of Mayor Bing and the City Council under such an arrangement:

A ranking city official who spoke only on condition of anonymity said he spoke with Dillon by phone this morning and was told that the Bing administration’s inability to fix Detroit’s immediate cash crisis and enact major financial reform gave the state no choice but to bring in an outside manager.

The conversations appeared to give the city only one way out: through approving a series of reforms Bing’s administration said it will negotiate with the council ahead of its next meeting Dec. 11.

Bing has promised more negotiations to fix the city's troubled finances.

Neither Bing nor state officials would comment for Helms' report.

Michigan Radio is working to confirm these reports and will have more later.