State treasury visits AP

By ANDREA POTEET
Sunday Times Newspapers

ALLEN PARK – The first of a three-step financial review process by the state, which could lead to an emergency financial manager, has begun here.

Mayor William Matakas confirmed Thursday that Michigan State Treasury staff visited the city Wednesday and Thursday to conduct a preliminary review of the city’s finances, the first step toward an emergency financial manager.

The group then has 30 days to report to the governor whether financial stress exists in the city, State Treasury Director of Communications Terry Stanton said. If present, a financial review team, consisting of state officials, a designee of the state speaker of the house, a designee of the majority leader and others appointed by the governor, then has 60 days to conduct a financial review of the city’s finances, which could lead them to recommend an emergency financial manager. That period can be extended up to 90 days.

“A review team could find that there is little or no financial stress,” Stanton said. “Or it could reach a consent agreement, or it could recommend the appointment of a financial manager.”

In a letter dated May 24 and sent to Matakas, State Treasurer Andy Dillon cited several reasons for the preliminary review, including a March 21 letter from then-City Administrator John Zech requesting the review, per a city council vote. It also cited the city’s cash flow issues, including a general fund that shrank from $3.7 million to $505,023 during the 2011 fiscal year.

Matakas said the team has met with the finance department, but as of Thursday morning had not yet met with him.

“We haven’t been told the process,” Matakas said. “They showed up and we were asked to cooperate and that’s what we’re doing.”

Tags: