Detroit manager, mayor-elect agree on naming city CFO

Thu Nov 21, 2013 5:58pm EST

Nov 21 (Reuters) - Detroit's state-appointed emergency manager and its mayor-elect announced the appointment on Thursday of a new chief financial officer for the cash-strapped city, with the joint action signaling a change from previously estranged relations between the emergency manager's office and city government.

John Hill, the former chief executive officer of a business-backed civic group for Washington, D.C., was tapped to lead Detroit's finance department and work on the city's restructuring team, according to the announcement by Emergency Manager Kevyn Orr and Mayor-elect Mike Duggan.

Hill, a certified public accountant, headed Washington's Federal City Council from 2004 to 2012. He previously served as executive director of that city's Financial Control Board, which was created by Congress in 1994 to take over the U.S. capital city's finances and budget.

"John Hill brings a wealth of municipal finance and restructuring experience to Detroit," Orr said in a statement. "John's similar service in our nation's capital will help move Detroit forward."

Detroit, which filed the biggest municipal bankruptcy in U.S. history on July 18, is currently awaiting a ruling from a U.S. judge on whether it meets eligibility requirements to remain in federal court to work out a plan to deal with more than $18 billion of debt and other obligations. Prior to the bankruptcy filing, Orr, a former corporate bankruptcy attorney, was selected by Michigan's governor to run the state's biggest city.

Orr's appointment in March left current Mayor Dave Bing and the city council with a severely limited ability to govern under state law.

Orr in his first weeks in office countermanded several efforts by Bing and the city council, including Bing's notice to unions that he would stop honoring their contracts. Bing, in an email that was later disclosed in bankruptcy court proceedings, expressed agreement with a mayoral staff member who said he found Orr "embarrassingly incompetent" when it came to city operations.

Duggan, who was elected mayor in November and who takes office in January, said he participated in interviewing Hill and encouraged him to accept the Detroit job, according to the statement. Because Duggan is not officially the mayor yet, Hill's appointment was ultimately made by Orr, according to Duggan's spokesman.

Hill replaces Jim Bonsall, an Orr appointee who resigned in October in the wake of allegations that he made racist remarks to Detroit co-workers.

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