U.S. News

Michigan governor approves state takeover of Flint

(Reuters) - Michigan Governor Rick Snyder approved a state takeover of the city of Flint on Tuesday, following a review team’s assessment earlier in the month that the city, a former manufacturing hub for the auto industry, is in a financial emergency.

Traffic goes by in downtown Flint as seen from the historic Durant Hotel that is currently being restored after closing in 1973, in Michigan July 8, 2009. REUTERS/Rebecca Cook

Snyder named Michael K. Brown, a former mayor of Flint, as the emergency financial manager for the city.

Flint is now the fifth municipality in Michigan to come under a state-appointed manager. The move comes as Detroit, the state’s biggest city, struggles with fiscal problems that have already threatened to take it down the same road.

Brown is also president of the Prima Civitas Foundation, and director of the Flint Area Reinvestment Office.

“Given his experience in public, private and nonprofit settings, I’m confident he is well equipped to take on this critical post,” Snyder, a Republican, said in a statement.

Flint Mayor Dayne Walling was not immediately available for comment.

The state’s review team concluded earlier this month that a financial emergency exists in Flint, which is about 60 miles northwest of Detroit, and that no satisfactory plan was in place to address its fiscal problems.

It is not the first time that Flint has been run by an emergency financial manager. The city had an emergency financial manager from June 2002 through July 2004; its financial emergency declaration was lifted in January 2006.

Officials in Detroit, meanwhile, have been scrambling to get the city’s finances in order amid projections that Detroit will run out of cash in April, which has heightened expectations the city could be the subject of a state financial review that could lead to an emergency manager.

Sara Wurfel, Snyder’s spokeswoman, said the governor continues to view an emergency manager for Detroit as a last resort, but wants to see progress on structural reforms.

“We do believe the situation is severe and urgent,” Wurfel said. She added that there was no set timetable for the state to launch a preliminary financial review with or without a request from the city’s elected officials.

Other municipalities in Michigan with emergency managers currently in place are the cities of Pontiac, Ecorse and Benton Harbor and the Detroit Public Schools. The finances of the Highland Park School District are under review.

A state law enacted in March increased the power of emergency managers, allowing them to modify or end collective bargaining agreements with public sector workers.

Reporting by Karen Pierog; Editing by Leslie Adler