DALLAS -- Allen Park, Michigan took its final step toward financial independence on Tuesday, regaining full local control its operations and finances after nearly four years of state oversight.
Michigan Treasurer Nick Khouri said on Tuesday that the city had been released from receivership following improvements in its financial situation.
"The cooperation of state and city officials to problem-solve complex debt issues now provides the community an opportunity to succeed independently," Khouri said in a press release.
Allen Park in 2012 requested a preliminary review of the city's finances as it faced a budget deficit, falling property values and the consequences of a failed movie studio development project. An emergency manager was put in place from March 2013 to September 2014.
The Receivership Transition Advisory Board was appointed in September 2014 when the financial emergency was resolved to oversee the city's transition back to local control.
Since the appointment of the RTAB, Khouri said that Allen Park accomplished an increase in the amount of the city's general fund balance. The city successfully passed a 10-year public safety millage and a 10-year road millage in November 2015.
The city has also made all required contributions into the pension and retiree healthcare systems, including an additional $500,000 annual payment toward other post-employment benefit liabilities.
Allen Park completed a successful tendering of 62% of the outstanding bonds used to fund the failed movie studio project for a savings of $1.1 million in 2015. An additional remarketing of the remaining amount was finalized in 2016, saving the city another $900,000. The bonds were issued through the Michigan Finance Authority.
The bonds were initially sold in 2009 and 2010 to finance the film studio at a time when the state had had country's most generous film tax-credit program.
Plans for the eight-stage studio soon fizzled after the state government reined in the credits. With no one leasing the vast facility, the city was forced to dip repeatedly into its general fund to cover the $2.6 million annual debt service on the project.
By 2012, the state declared the city to be in a financial emergency. In November 2014, the Securities and Exchange Commission charged the city and two former leaders with fraud related to the debt, taking the rare move of charging the public officials as "control persons."
In March 2016, S&P revised the outlook to positive on the city's general obligation bonds, though they remain deep in junk territory with limited tax GOs at CCC-plus and unlimited-tax GOs at B-minus.