Detroit's oversight board unanimously voted on Monday to support a move by Michigan's treasurer to begin a process that will likely lead to the state appointing an emergency financial manager for the city, Reuters reported yesterday. Frustrated by the slow pace of fiscal reform and worried about Detroit's long-term viability, the state is poised to start a 30-day preliminary review as early as today to determine the extent of the city's financial crisis, said Terry Stanton, a spokesman for the Michigan Treasury Department. A report by city officials to Detroit's financial advisory board on Monday indicated that the city's cash-flow position could erode in the fiscal year that ends June 30 to a negative $113.7 million from a negative $76.7 million that was forecast last month. The appointment of an emergency manager would bring Detroit a step closer to a possible bankruptcy filing, as would legislation that could be passed by the Michigan Legislature this month that would give fiscally struggling local governments like Detroit options including chapter 9 municipal bankruptcy, emergency managers and consent agreements. Detroit avoided getting an emergency manager earlier this year by signing a consent agreement that gave the state some oversight of Detroit's finances. However, Mayor Dave Bing and the nine-member city council have been at odds over some of the measures the mayor and state officials believe will lift Detroit out of its fiscal hole.
