State auditors say Detroit in "probable financial stress"
Update 3:29 p.m.
The Associated Press has this report on reaction from Detroit Mayor Dave Bing:
Detroit Mayor Dave Bing says the city already is working to address financial problems detailed by a new state review.
Bing says in a statement Wednesday that the city plans to "fully cooperate" with the state's financial review process. His comments came after the state announced it had found that "probable financial stress" exists in the city of Detroit...
Bing has said Detroit faces a $150 million budget deficit and a projected $45 million cash shortfall, but argues that progress is being made without state oversight. He is seeking concessions from city unions and says Wednesday the goal is to forge an agreement "soon."
"The longer it takes to address Detroit's financial problems, the more painful the potential solutions become." - State Treasurer, Andy Dillon
Michigan State Treasurer said today that their preliminary review of Detroit's finances found the city to be in "probable financial stress."
More from MPRN's Rick Pluta:
Governor Rick Snyder will order an intensive review of Detroit’s finances now that a team from the state Treasury has determined the city is in “probable financial stress.”
It is the next step in a process that could wind up with the governor naming an emergency manager to run the city.
State Treasurer Andy Dillon said the administration still hopes Mayor Dave Bing and the city council can come up with its own plan that would avert a state takeover.
“It’s our number one hope that the city, the city council and labor can make its own deal that the state is not be part of, but, so that we’re ready for the event of maybe a cash shortfall in April, we thought it necessary to have the formal review process run in tandem with the progress that the city’s making,” said Dillon.
A report highlighted last month by Detroit Mayor Dave Bing found that without changes, Michigan’s largest city could run out of money sometime in April.
The Detroit Free Press reports on what the preliminary financial review found:
Dillon said in a report the city had violated the uniform budgeting and accounting act by not adjusting its budget on a timely basis and had not filed an adequate deficit elimination plan. He also cited a mounting debt problem, trouble making payments to pension plans and the possibility the city will be short of cash by April...
Dillon said in his report that “city officials are either incapable or unwilling to manage its own finances.” Also “as we have noted on numerous occasions, the longer it takes to address Detroit’s financial problems, the more painful the potential solutions become,” he said.
After the next review, an emergency manager could be appointed to run Detroit.