CHICAGO -- Michigan Gov. Rick Snyder July 3 appointed a turnaround consultant to take control of a distressed Detroit suburb after city officials rejected a consent agreement with the state.
Snyder tapped Brad Coulter to serve as emergency manager of Lincoln Park. Coulter is an independent contractor with O'Keefe & Associates, a turnaround consulting firm based in the Detroit area, according to the state. Before that, he was a director at Amherst Partners, where he specialized in turnarounds of middle-market companies.
"Brad Coulter's extensive experience in finance and restructuring, including his understanding of government structure and municipal services, makes him a strong choice as emergency manager for Lincoln Park," Snyder said in a statement. "I know Brad will work collaboratively with city officials to address the financial emergency and to ensure Lincoln Park residents receive the critical services they expect and deserve."
Snyder declared the city to be in a financial emergency on April 14. After the determination, Michigan law gives local officials the choice of four options: bringing in an emergency manager; entering into a consent agreement with the state; asking for permission to file for Chapter 9; and bringing in a neutral evaluator.
Lincoln Park officials reportedly chose a consent agreement, but council members later rejected the decision by a vote of 4 to 3. State Treasurer Kevin Clinton then ordered an emergency manager take over the city.
The state review team said it found a trend of overspending from the general fund, a declining general fund balance and a rising deficit. The city also took $2.5 million from its water and sewer fund to make its fiscal 2013 pension payment.
Located outside Detroit in Wayne County, Lincoln Park has suffered steep drops in property tax revenues over the past few years. The city has seen its taxable value fall 31% over the last four years, and its general fund revenue decline to $20.3 million in 2013 from $24.6 million in 2009, according to the state.
Standard & Poor's in December 2013 hit the suburb with a seven-notch downgrade, pushing its limited-tax general obligation bond rating to BB from A-plus. Ratings analysts cited the city's unwillingness to honor lease payments to a private company.
Snyder in late March declared a fiscal emergency in the Detroit suburbs of Royal Oak Township and Highland Park.
The state oversees Benton Harbor, Allen Park, Detroit, Flint, Highland Park, Lincoln Park, River Rouge, Royal Oak Township, Hamtramck, Inkster, Pontiac and Ecorse, as well as give school districts.
