Michigan Governor Declares Financial Emergency in Hamtramck

Michigan Gov. Rick Snyder declared a financial emergency Monday in Hamtramck, a step that could lead to the appointment of an emergency manager.
June 4, 2013

By Paul Egan

Gov. Rick Snyder declared a financial emergency Monday in Hamtramck, a step that could lead to the appointment of an emergency manager.

But an emergency manager isn't the only possibility for Hamtramck under the state's revamped emergency manager law, Public Act 436 of 2012.

The law, which replaced Public Act 4 of 2011 after it was repealed in a statewide vote last November, provides four options for Hamtramck leaders: They can opt for an emergency manager, a consent agreement, a neutral evaluation process, or Chapter 9 bankruptcy.

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The option chosen is subject to state approval. Hamtramck officials requested the financial review that led to the finding. They now have seven days to request a June 11 hearing if they want to challenge Snyder's assessment, which mirrors the May 23 findings of a state-appointed team.

In its report, the team cited a $3.3-million general fund deficit, which exceeds 5% of total general fund revenues of just more than $16 million. The report also cited $1.6 million in delayed pension fund contributions.

"There was ... essentially unanimous acknowledgment that despite the city's worsening financial condition, city officials did not adequately address the condition," the Treasury Department said in a news release.

Emergency managers take over the power of elected officials and have additional powers, such as the ability to break contracts.

Emergency managers are in place in Detroit, Allen Park, Benton Harbor, Flint and Pontiac, and in several school districts. Ecorse is emerging from emergency management.

Hamtramck, which has about 22,000 people, was previously under emergency management from late 2000 until 2007.

(c)2013 Detroit Free Press

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