DETROIT, Jan 28 (Reuters) - Michigan Gov. Rick Snyder indicated on Monday that a team assessing Detroit’s finances would deliver its report in February, which could lead to the appointment of an emergency financial manager for the city.
An emergency manager could recommend that the city file for bankruptcy, which would be the largest municipal bankruptcy in U.S. history.
Naming an emergency financial manager for financially strapped Detroit could lead to greater state oversight of Michigan’s largest city.
Detroit has been operating under a consent agreement since last April that gives the state some oversight.
Detroit Mayor Dave Bing said on Jan. 10 that the review team could have its work done within days. But Snyder then tacked on two more tasks for the board to consider after the Detroit City Council passed some key reform measures.
After saying he has no specifics on the board’s work, Snyder said that the group’s report could be completed in February.
The city of about 700,000 has been battered by a steep decline in population, years of severe budget deficits and escalating employee costs.
Snyder asked the review team to consider recent reforms by the Detroit City Council after the team was put in place on Dec. 18.
Also, the governor asked the review team to consider long-term liabilities such as pensions and health care.
“That’s a fairly extensive undertaking so that may take two or three weeks to get that through,” Snyder said on Monday.
The governor said he hopes the team’s work is done soon. Under state law, the team has 60 days to complete its review, although it could request a 30-day extension.
“This is a fairly urgent situation,” said Snyder. “This is a crisis in terms of financial affairs. So I encourage them to get it done quickly, but quality is the first issue. (The review team has) done a great job in the past. I hope they continue on that path and I‘m sure they will.”
Last Friday, Detroit was on track to get $20 million from the state of Michigan after it met some goals to restructure the city’s sagging finances.
Earlier this month, the city council approved a one-year pension freeze and a higher share of health care costs from non-union city workers.