By JAMES MITCHELL
Sunday Times Newspapers
LINCOLN PARK — The questions and specifics will be studied for another month, at least, but Fred Headen, a legal adviser with the Michigan Department of Treasury, said last week the question is straightforward.
“Lincoln Park either has a financial emergency or it does not,” Headen said. Headen is among the five members of a state-appointed team tasked with reviewing the city’s finances, and Tuesday chaired a public information meeting at city hall.
Residents who attended weren’t able to hear any answers just yet. Headen said the team had spent several days in city offices and the research and review remained in the early stages.
“No conclusions have been reached,” Headen said. The process had started in September 2013 when city officials asked for a state review. The budget deficit — expected to be about $1 million when the fiscal year ends in June — has been the single biggest challenge facing the city in recent years.
Last month a panel was appointed that included Headen and Michael Krouse from the Department of Treasury; Doug Ringler, director of the state Office of Internal Audit Services; emergency management consultant Steve Schiller; and Max Chiddister, who developed efficiency programs for Detroit public safety departments. The review team has until April 11 to complete its research and file a report with Gov. Rick Snyder.
That report will be available to the public, Headen said. The answer to the question — is Lincoln Park in a financial emergency — will determine how the city moves forward. If sufficient indicators are not confirmed to qualify as an emergency situation, the city will have to continue its efforts to cut costs and services, increase revenue or both to avoid further financial complications.
If — as many expect —the city is determined to be in an emergency situation, Headen explained the options which include: Enter into a consent agreement under which the state assumes certain decision-making authority, the appointment of an emergency manager, or declare bankruptcy.
Headen said the city council would have the option of accepting or rejecting that decision, or request a hearing on the matter.
Tuesday’s meeting welcomed public input and opinions, and five residents addressed the panel. One suggested that the state Legislature had favored business interests over resident welfare; another suggested that local revenues could be increased if police issued more traffic violations.
Mayor Thomas Karnes has said it remains uncertain if the state will take decisive action — the city had laid out a five-year debt elimination plan that has reduced the annual shortfall — although the challenge of declining revenues and increased employee costs remains.
The state review team expected to continue its research, and Headen said he expected the report will be filed by the April 11 deadline.
(James Mitchell can be reached at [email protected])