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State To Launch Preliminary Review Of Detroit's Finances

DETROIT (WWJ) - It's official. State Treasurer Andy Dillon Friday announced that the Department of Treasury will begin a preliminary review of Detroit's finances -- the next step in a possible move to an emergency manager in the city.

The preliminary review will begin Tuesday, Dec. 6, running "parallel to the city's continuing effort to address its financial problems."

"While we have long hoped the Mayor and city council would agree on a viable recovery plan, given the mayor's description of the city's financial condition and the prospect the city may run out of cash in mere months, it has become clear that a preliminary financial review is not only warranted but necessary," said State Treasurer Dillon in statement.

"We must begin the review process, in the event the city does not develop a workable plan. The longer we wait to address Detroit's financial problems, the more painful the eventual solutions become," he said.

A letter summarizing the reasons for the review was sent to Gov. Snyder. - View a copy of the letter (.pdf format) -

"It is critical that we work and move forward together in these tough and challenging times," Gov. Rick Snyder said. "Unity – not division – is the way to ensure that we can collectively and collaboratively ensure a revitalized, strong and successful Detroit and Michigan. We stand ready to be a supportive, constructive resource," he said.

The move doesn't definitively mean that an emergency manager will be appointed.  After reviewing the finances, the team would make a recommendation about what to do next.

Detroit Mayor Dave Bing has said the city needs union concessions to help eliminate a budget deficit, while others in council are urging a more comprehensive approach to battle off possible insolvency.

A state law passed in March gives emergency managers more power when fixing the finances of cities and school districts. This includes the power to dissolve union contracts and to implement cuts without any approvals from city leaders.

Mayor Bing, City Council and labor leaders say they adamantly oppose state intervention. Bing spoke out Thursday amid reports a review was coming.

"Detroit needs to be run by Detroiters," said the mayor. "We are here to send a clear message. We are opposed to an Emergency Manager. We're making progress and moving closer than ever to addressing this fiscal crisis." (More on this, here).

Dillon was asked if he thought Detroit was sliding into bankruptcy.

"I actually think, from the numbers I've seen, that the city can fix its problems and it can function going forward," said Dillon. "So, I don't see that in the future."

Dillion said the initial financial review will take 30 days.

Gov. Snyder also on Friday appointed a seven-member financial review team to examine the city of Inkster's finances, following the the layoff of 12 police officers while that city struggles with a multi-million dollar deficit. Earlier this week, Snyder appointed an emergency manager for Flint.

Related: Conyers Calls For Review Of Emergency Manager Law

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