DALLAS -- Inkster, Mich., will earn its release from a state-mandated emergency consent agreement by the end of the month.
The Michigan State Treasury said Wednesday that the Detroit suburb, which has been operating under the consent agreement since February 2012, has met all three conditions for release and will be freed of state oversight June 30.
"Simply put, the financial emergency is over," said Inkster mayor Byron Nolen. "This release reflects the hard work and determination of the city's residents, elected officials and administration to pay off the city's debt and attain reasonable fund balance levels in just four years, one year ahead of our five-year repayment plan."
Inkster was able to demonstrate to state officials that it is no longer in financial distress. According to the State Treasury, the city's financial statements indicate that no fund maintained by the city is in a deficit condition.
The city has eliminated any structural imbalance of recurring operating expenditures in excess of recurring operating revenues. The State Treasurer has also certified to Gov. Rick Snyder that no condition exists and no action has been taken, or is being contemplated, by city officials that would initiate or cause the initiation of a preliminary review.
"The residents of Inkster should be proud of the significant progress that the city has made while operating within the best practices established by this agreement," said State Treasurer Nick Khouri. "Inkster has made great strides to return to stable financial footing."
The city of about 25,000 people, 15 miles west of downtown Detroit, entered the emergency consent agreement in 2012 based on a state review of the city's finances that found it to be in a state of severe financial stress. The city's accumulated deficit has decreased since 2012, when it was $3.5 million, to $864,000 in 2015.
Under Michigan's financial emergency program, local governments may choose among four options, including the appointment of an emergency manager. The other three are bankruptcy, mediation, or a consent agreement between the state and the city to permit local elected officials to balance their books on their own.
The consent agreement is an intermediate step that is less serious than the governor appointing an emergency manager. It sets budgetary benchmarks the city must meet, as well as a timeline.
Inkster's school district was shuttered in the summer of 2013 after Michigan lawmakers enacted legislation that allowed for the dissolution of small insolvent school districts.
During his state of the city address delivered earlier this year, Nolen said that once free from state intervention, the city would look to reestablish the school system.
"Meetings are taking place, and the foundation is being laid right now in order to create a new place of learning for our children," said Nolen. "There needs to be a paradigm shift in education and I would like it to start here in Inkster. I'm currently attempting to secure the land that used to house our schools before our district was dismantled. Unfortunately, the State has already demolished all but one of our buildings, so it is now time for us to get our land back and develop new schools for our children."
