DETROIT (WWJ/AP) – The Michigan treasurer’s office says a state-appointed emergency financial manager still is an option for Detroit in the face of its growing budget problems.

State Treasurer Andy Dillon met Detroit officials Wednesday to discuss growing concerns about the city’s near-term ability to meet its financial obligations and its long-term viability.

Revenue is lower than expected and Detroit must make up a $12 million missed payment to its pension fund.

Detroit’s budget deficit exceeds $200 million and Dillon says the city’s finances are eroding quicker than expected.

“The state is of the view we need to act and most of the council members and the … folks in the mayor’s office recognize that it’s getting too close for comfort and that we do need to see a change here,” Dillion said.

A  state-initiated financial review is expected to begin next week and, depending on the outcome, Gov. Rick Snyder could appoint an emergency financial manager.

“We wanna work with them. Just because we’re initiating the financial review doesn’t mean it’s a takeover,” Dillon said. ” … I’m here to meet with the mayor and council members to say, ‘Can we do this together.’ It doesn’t have to be confrontational. It can be a partnership.”

A consent agreement between Detroit and the state last year let the city avoid a state-appointed manager, but some say they worry that Mayor Dave Bing and the City Council aren’t moving fast enough to enact financial reforms.

Treasurer’s office spokesman Terry Stanton said the financial manager “option cannot be taken off the table” and “delaying reforms and tough decisions only promises to make eventual solutions more difficult and painful.”

Public Act 4, the state’s Emergency Manager Law, was struck down by Michigan voters in November, but a less-powerful emergency financial manager is still allowed under a previous statute.  Public Act 71, the EFM law, does not allow a state-appointed manager to void union contracts.

Mayor Bing released the following statement on the issue on Wednesday:

“My administration has had discussions with the state regarding an emergency financial manager previously.  Until the state makes a final determination, I will continue to implement my restructuring plan on behalf of the citizens of Detroit.”

(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)