CORRECTED-UPDATE 1-Michigan gov. has short list of Detroit managers if needed

Mon Feb 11, 2013 5:49pm EST

(Corrects spelling of Miller Canfield law firm)

By Michael Strong

DETROIT Feb 11 (Reuters) - Michigan Governor Rick Snyder said on Monday he has not offered the job of emergency financial manager of Detroit to anyone but does have a "short list" of candidates if he decides that the state should take over management of the city.

"I have a short list," Snyder told reporters after a luncheon speech to the Detroit regional Chamber of Commerce. "I haven't made an offer to anyone. We're talking to people."

The Detroit News reported on Sunday, quoting anonymous sources, that Snyder had selected an emergency manager, offered the job and expected a response this week. The person offered the job was not identified, but the article said it was not former Washington, D.C., Mayor Anthony Williams.

Snyder declined to comment on Williams, saying if he responded about one name, he would be asked about others. But Snyder said there are not many candidates with the skills necessary to do the job.

Confirmation from the Republican governor that he has assembled a short list of names for the position came as a review team studying Detroit's financial situation is expected to recommend soon whether an emergency manager should be appointed.

The city of about 700,000 people has been struggling for years with a falling population, shrinking tax base and large payroll for city services.

The city has been operating under an agreement since April 2012 that gave the state some oversight and created an advisory board. But the slow pace of reforms led Snyder to launch a new review of Detroit's finances in December.

Municipal finance experts say an emergency manager for the city would be a key step that could ultimately lead to Detroit filing the largest-ever Chapter 9 municipal bankruptcy in the United States.

The review team appointed by Snyder on Dec. 18 has two months to complete its study of Detroit's finances and is expected to deliver its report by Feb. 16.

But Snyder said on Monday that the timetable could be flexible because he had asked the team to consider the Detroit City Council's recent actions to improve its finances.

It could take two more weeks, he said, or it could be sooner. The review team can recommend the appointment of an emergency manager, who would control the city's checkbook.

Darrell Burks, a member of the Detroit Financial Advisory Board, which met separately on Monday, said the board has all the information it needs to make short-term decisions for the report. They were awaiting some information on long-term issues facing the city but it could be incorporated in time for the Feb. 16 deadline.

The city has hired advisers to help in the process and they have been meeting several times a week, the review board said. They include:

- Miller Buckfire retained as investment bank

- Ernst & Young retained as financial restructuring adviser

- Conway MacKenzie retained as operational restructuring adviser

- Milliman retained as pension and health care adviser

- Miller Canfield retained as external legal counsel.

While Democratic Mayor Dave Bing and the city council have moved to reduce spending and initiate some reforms, including layoffs and wage and benefit cuts, to stave off state takeover of the city, the progress may not be enough to avoid an emergency manager being appointed. (Reporting by Michael Strong, additional reporting by Karen Pierog and Tiziana Barghini; Writing by Greg McCune; Editing by Carol Bishopric, Dan Grebler and Tim Dobbyn)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

How to get out of debt

Financial adviser Eric Brotman offers strategies for cutting debt from student loans and elder care -- and how to avoid money woes in the first place.  Video