City warned of state financial supervision


Sunday Times Newspapers

LINCOLN PARK — Elected officials were well aware of the looming financial crisis, but if a reminder was needed the city council heard last week from deputy state treasurer Roger Fraser.

The state official echoed what the city knew and warnings given by former City Manager Greg Capote: If a deficit of more than $2 million is not addressed by June 30, Lincoln Park may run out of money and into emergency management or some other state supervision.

Mayor Patricia Diaz Krause said that the council’s efforts toward debt reduction will be closely monitored by state officials.

“They’re watching us,” Diaz Krause said.  “He said to put things in place that show the state we’re working toward reducing expenses and that we have a plan in place for going forward.”

Failure to provide a plan or take productive steps out of deficit could result in one of several options. The state has the authority to order a financial review, appoint an emergency manager, be subject to a consent agreement or bankruptcy.

In recent weeks city officials began addressing the budget from the top down. Diaz Krause said that last month’s reappointment of department heads included benefit reductions and elected officials accepted a 20 percent salary reduction. No layoffs have yet been announced, and Diaz Krause said she hopes to avoid that as a solution.

“We’d rather people make less money but stay employed,” Diaz Krause said.

Given the budgetary limits Diaz Krause said city council will not rush to replace Capote, who was not offered a contract last month. Capote accepted the city manager position in June 2012 after the post lay vacant following the previous year’s resignation of Steve Duchane. Last week Diaz Krause and city council agreed to search first for an interim, possibly part-time manager before launching a broader search for a full-time replacement.

“We’re looking for an interim manager right away,” Diaz Krause said. “That will give us time to really search for and vet a permanent one. We’d like to find someone who has dealt with a crisis in another municipality or corpotation, someone with the experience to make some tough decisions.”

Tomorrow’s regular city council meeting will continue debt reduction considerations.