As expected, Governor Snyder has confirmed that Hamtramck faces a financial emergency.
Now, the question is what to do about it.
Hamtramck’s financial problems are nothing new. The city was in state receivership from 2000-2007. And in 2010, city officials asked to file for bankruptcy.
And they asked for this state review, too—which found the city is still running continuous deficits, and can’t make pension payments on time.
“There was essentially unanimous acknowledgement from those interviewed that a financial emergency exists and despite the worsening financial condition, city officials did not adequately address the condition,” according to a statement from the Governor’s office.
That might lead some to question whether the 2.1 square mile city is financially viable. Mayor Karen Majewski insists it is.
“The problems that Hamtramck is facing are not that different in type—maybe just in degree—from the kinds of problems that cities all over the state are facing,” Majewski says.
Majewski says those issues include personnel costs, legacy costs, and balancing city service delivery with an eroding tax base.
Hamtramck officials have 7 days to appeal the finding. Majewski says they’ll vote on that this week.
If they don’t challenge--or if the challenge is unsuccessful--the city could get an emergency manager.
But under Michigan’s new emergency manger law, city officials potentially have other options: including a consent agreement, mediation, or a Chapter 9 bankruptcy filing.