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Michigan Finds Fiscal Emergency in Another City, Hamtramck

CHICAGO -- A Michigan review team said Thursday it found a financial emergency in the city of Hamtramck, setting up the troubled Detroit suburb for the appointment of an emergency manager.

If Gov. Rick Snyder agrees with the team’s findings, Hamtramck will become the ninth local government to come under state control.

Hamtramck is a long-troubled city of roughly 23,000 that was under state control from 2000 through 2007. A few years ago, city officials petitioned the state for permission to file for Chapter 9 bankruptcy, but the state refused.

After conducting a preliminary review earlier this year, Snyder in mid-April appointed the five-member review team to delve deeper into the city’s books. The team held a series of meetings with city officials, union officials, and the city’s audit firm, and others.

“The review team’s report indicates there was essentially unanimous acknowledgment from those interviewed that a financial emergency exists within the city of Hamtramck,” the state treasury department said in a press release. “There was also essentially unanimous acknowledgment that despite the city’s worsening financial condition, city officials did not adequately address the condition.”

Among the team’s findings: the city delayed making monthly required pension contributions totaling $1.6 million for six months in order to manage cash flow; the general fund deficit totals $3.3 million on general fund revenues projected to be $16 million; and that a structural operating deficit has existed in the city for the last three years.

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