Michigan Readies Hamtramck for Local Control

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Rick Snyder, governor of Michigan, speaks during an event in Detroit, Michigan, U.S., on Thursday, Feb. 21, 2013. A fiscal emergency grips Detroit, according to a report ordered by Snyder, that opens a path to a state takeover of General Motors Co.’s home town, citing deficits that have stymied city officials after a $326.6 million gap last year. Photographer: Jeff Kowalsky/Bloomberg *** Local Caption *** Rick Snyder

CHICAGO — Michigan Gov. Rick Snyder has declared the financial emergency in Hamtramck resolved and put a Receivership Transition Advisory Board in place to help the city transition to independence.

Snyder said in the announcement Thursday he had accepted emergency manager Cathy Square's recommendation that the fiscal emergency had been sufficiently addressed to begin the process of independent control. Square was tapped in June 2013.

In her recommendation to the governor, Square cited as strides the city's receipt of a low-interest, $2.3 million loan with a 10-year repayment schedule to satisfy its liability to the Municipal Employees Retirement System.

Under Square, the city cut healthcare, negotiated salary reductions for union and non-union employees and department heads, and eliminated minimum staffing requirements and other changes for savings of approximately $1 million. The city sold of surplus vacant land and restored city controller and assessor positions previously outsourced.

Square enacted a two-year budget for the city.

"It has truly been an honor to serve the residents of Hamtramck," Square said in the state's statement. "The steps necessary to return the city to fiscal stability were not easy ones, but we have moved Hamtramck forward together."

Hamtramck, with 22,000 residents, is surrounded entirely by Detroit. Square, who worked with Pontiac EM Louis Schimmel before being appointed to take over Hamtramck, last year began implementing her financial plan to revive the city by firing a trio of top city employees and cutting the City Council's pay.

Gov. Rick Snyder appointed Square to take over Hamtramck a few weeks after the state declared the city to be in a state of financial emergency. The city had delayed making required monthly pension contributions in order to manage cash flow and had a general fund deficit for the previous three years.

The city also had an emergency manager from 2000 to 2007. Four years ago, local officials pressed the state to allow it to become the first Michigan government to file for bankruptcy, a request the state denied.

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