CHICAGO -- Michigan Gov. Rick Snyder on March 19 affirmed an earlier decision that the Detroit suburb of Royal Oak Township is in a state of financial emergency.
Local officials now have seven days to select one of four options to address the problem: signing a consent agreement with the state, asking for an emergency manager, asking for a neutral evaluation, or seeking to file for Chapter 9 bankruptcy.
The options are part of the state's relatively new law for distressed local governments.
The town's officials have until March 26 to pass a resolution selecting one of the four options.
Snyder first declared an emergency in Royal Oak on Jan. 30, after reviewing a report from a state-appointed review team.
Royal Oak, population 2,400, is located in triple-A rated Oakland County, which borders Detroit.
The Royal Oak team found that, among other things, audit reports for the last three years showed variances between revenues and expenditures, with actual general fund revenues coming in short for two of the three years. Township officials also failed to adopt a budget for the current fiscal year that began on Jan. 1, 2014, according to the treasury department.
The review team was appointed Dec. 3, after a preliminary analysis showed that "probable financial stress" existed in the township.
The state controls Detroit, Allen Park, Flint, Hamtramck and Pontiac -- all located in the Detroit metro area -- as well as several school districts, including Detroit Public Schools. It recently lifted the fiscal emergency declaration from Benton Harbor.
Snyder has also declared a financial emergency in Highland Park, though that Detroit suburb has not yet entered the stage of selecting one of the four options.
The state is in the midst of reviewing the finances of Lincoln Park, located just outside Detroit in Wayne County.
