January 23, 2012 / 10:05 PM / in 6 years

Michigan Governor prefers no Detroit emergency manager

(Reuters) - Michigan Governor Rick Snyder said Monday he prefers to avoid using an emergency manager to fix Detroit’s financial woes and instead would like to rely on a so-called consent agreement to implement deep changes.

Snyder also downplayed the likelihood of a Detroit bankruptcy.

“The best answer is a consent agreement,” Snyder said during an interview with Reuters in Detroit. “That’s where I’ve been for a long time.”

Snyder’s comments follow weeks of protests in Detroit by civil rights activists who have called Michigan’s use of emergency financial mangers racist.

It also indicates the Michigan’s business-minded governor may be taking a softer approach to the state’s biggest and highest-profile city despite the fact many of his supporters strongly advocate swift action to fix a Detroit financial mess that has been decades in the making.

Detroit’s financial situation has come under intense scrutiny after it became apparent late last year the city was on the brink of running out of money. Snyder came to office in 2010 and has used emergency managers to work on finances in some of the state’s bigger cities.

Detroit, however, is seen as an especially urgent situation given its prominence in the auto industry, the amount of municipal debt on its books, and its role in international commerce. General Motors Co and Fiat SpA’s Chrysler continue to have massive operations in the city limits.

With a population of 714,000, the city would also be one of the largest to have an emergency manager.

Unlike an emergency manager, who would have broad and immediate power to force quick cost and operating changes, a consent agreement would rely on Detroit’s mayor and city council to execute a state-mandated plan.

Michigan Treasurer Andy Dillon is leading a team reviewing Detroit’s finances and will likely make a recommendation on a plan of action to Snyder by the end of next month. That team could recommend an emergency manager, a consent agreement, or no action at all.

Snyder’s support of a consent agreement echoes comments Detroit City Council President Charles Pugh made in an interview with Reuters last week. He said he had met with Dillon’s review team and that the team is leaning toward a consent agreement.

Snyder said he has been hands off with the Michigan Treasury team working on the Detroit recommendation. “I don’t want to impose my view on it.”

Reporting by John Stoll; Editing by James Dalgleish

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