CHICAGO - The state team reviewing Detroit’s finances has asked for and received a 30-day extension.
The team was facing a Monday deadline for recommending to Michigan Gov. Rick Snyder whether the city faces enough fiscal stress to warrant appointment of an emergency manager.
Friday afternoon the state approved the team’s request for an extension, according to a Treasury Department spokesman. The team now has until March 28 to complete its review of the city’s finances.
The 10-member review team, which includes state Treasurer Andy Dillon, said in early January that it hoped to complete its work within 60 days and not have to ask for an extension.
The 30-day extension gives Mayor Dave Bing more time to negotiate new labor contracts with the city’s 48 unions. The final agreement, with the firefighters’ union, was tentatively reached last Friday.
But all of the agreements remain tentative as the union membership has yet to ratify them, and a recent Detroit City Council fiscal analysis of the concessions said they did not generate sufficient savings to keep the city from running out of cash in April.
State officials have said repeatedly that Detroit could avoid a state takeover if city officials can reach a deal with unions on its own.
The review work also has been complicated by an Ingham County Circuit Court judge’s recent decision that the team violated the state’s open meetings act by holding private meetings. Since then, the team has held its meetings in public.
The team can report a range of findings. It can conclude that Detroit is not in financial stress, is in a condition of mild financial stress, or is a condition of severe financial stress but that the issues can be resolved with a consent agreement with local officials. It can also find that a financial emergency exists and that there is no satisfactory plan to resolve it.
A preliminary state review in November concluded that the city faces probable fiscal stress.
If Snyder appoints an emergency manager, the move could trigger termination payments associated with interest-rate swaps that could be as high as $400 million.
