Financial plan ready for city approval

Sunday Times Newspapers

LINCOLN PARK — Mayor Thomas Karnes doesn’t expect too much more will change in the city’s anticipated consent agreement for state financial oversight.

The general terms offered few surprises to Karnes, who said that what has been anticipated for months is about to become reality.

“It comes down to an economic plan,” Karnes said. “The proof will be in the pudding with the financial plan we come up with.”

Barring any last-minute changes, Karnes said that city council this week likely will approve the terms of a consent agreement under which state treasury officials provide oversight of city financial decisions.

The downside, Karnes said, is of the state having final authority over finances including employee union contracts, department expenditures and budget approvals. The decisions, including this week’s approval of the agreement and anticipated hiring of a new city manager, remain the responsibility of city officials.

“We’ll have oversight by the state, but we still have to make the decisions,” Karnes said. “On the whole it’s what I expected.”

City council last month approved the acceptance of a consent agreement after a state financial review determined a “financial emergency” exists. Gov. Rick Snyder confirmed the status, and city officials opted to enter into the five-year agreement rather than accept a state-appointed emergency manager — which remains an option should the city fail to comply with the terms oft he consent agreement.

As part of the contract, the city will have until Sept. 30 to submit for state approval a five-year plan for eliminating the municipal debt, expected to be between $1 million and $2 million at the end of the fiscal year June 30.

Karnes said the discussions and negotiations — which began last fall when city officials requested a state review of its struggling financial outlook — have all been held, and whatever the terms of the agreement city officials must now turn a plan into reality.

“This is where the rubber meets the surface,” Karnes said. “It’s what we have to do. There’s no other choice in the matter.”

(James Mitchell can be reached at