A possible state-ordered takeover of Flint advanced last week when Michigan Gov. Rick Snyder appointed a financial review team to examine the troubled city’s finances.
The move comes a month after the state launched a preliminary financial review of Flint, making it the first city to undergo such a review since Michigan passed a new, broader emergency management law.
The preliminary review resulted in a finding of “probable financial stress,” the state Treasury Department said last week. The finding was due to several problems, including recurring deficits and cash shortfalls, and a failure to follow approved deficit elimination plans, according to the the state.
“Our overarching goal is to work collaboratively with local officials and hopefully avoid the need for an emergency manager,” Snyder said in a statement. “This group of eight has the necessary skills, background, and expertise to ensure a detailed, thorough, and fair review as quickly as possible.”
The appointed members of the financial review team consist of: deputy state treasurer Roger Fraser; Doug Ringler, director of the Office of Internal Audit Services in the Department of Technology, Management and Budget; former state budget director Robert Emerson, who is now an associate with McAlvey, Merchant and Associates; Brom Stibitz, senior policy advisor in the Treasury; Frederick Headen, director of the treasurer’s Local Government Services Bureau; Laura Argyle, vice president of finance and chief financial officer for the Midland Center for the Arts; Gene Dennis, former president and chief executive of Universal Systems, an electrical construction services company headquartered in Flint; and Saginaw city manager Darnell Earley.
The financial review could lead to a number of outcomes, including appointment of an emergency manager or a consent decree between Michigan and Flint that would allow locally elected officials to remain in power and give them additional authority, such as the ability to terminate or unilaterally modify labor contracts.
An August article in the Flint Journal quoted Snyder’s spokesman as saying that the city was a “prime example” of how the new law will help the city avoid a takeover by the state. Flint is the only city under review from Michigan officials.
The state has emergency managers in the Detroit Public Schools, and the cities of Benton Harbor, Ecorse and Pontiac.
The Highland Park School District is also under review.