Lansing — Gov. Rick Snyder declared financial emergencies Thursday in Highland Park and Royal Oak Township, setting the stage for the possible appointment of emergency managers to take over municipal government in the Metro Detroit communities.
Snyder agreed with the findings of two state financial review teams that the two communities are running persistent budget deficits and not paying vendors on time.
Under Michigan’s emergency manager law, elected officials in the two communities have seven days — until Monday — to request a hearing on the governor’s determination.
Highland Park and Royal Oak Township officials could choose between getting a state-appointed emergency manager, a financial consent agreement with the state, neutral mediation with its creditors or Chapter 9 municipal bankruptcy.
But Highland Park Mayor DeAndre Windom said the city plans to appeal Snyder’s finding of a financial emergency to the state Department of Treasury.
“We’ve had three emergency managers here already,” he said. “That’s not the solution.”
The mayor said the city will announce a team next week that will be responsible for “creating a long-term, sustainable plan for the future.”
“The government officials are working together but we haven’t had the necessary resources to assist us prior to this,” Windom said.
Highland Park has been in financial emergency before, from 2001-09.
“In July 2009, control of the city’s finances was returned to locally elected officials and department heads, though the declaration of a financial emergency was not revoked,” Michigan Treasury Department spokesman Terry Stanton said Thursday in an email.
Royal Oak Township financial analyst Bill Cunningham referred a reporter to township attorney Randall Pentiuk for comment. Pentiuk did not immediately return a request for comment Thursday afternoon.
Highland Park’s review team found the city had $19.5 million in unpaid bills as of Oct. 31, with $18.2 million of that sum owed to the Detroit Water and Sewerage Department.
In Royal Oak Township, the Oakland County Sheriff’s Office terminated its policing services in November after township officials failed to pay its bills.
The Michigan State Police is now providing law enforcement for the township.
Royal Oak Township also owes the city of Ferndale for unpaid firefighting services, according to the financial review.
There are emergency managers running the cities of Allen Park, Benton Harbor, Detroit, Flint and Hamtramck and school districts in Detroit, Highland Park and Muskegon Heights. State financial oversight remains in place in Ecorse, Inkster, River Rouge and Pontiac and its school district.
The state’s Treasury Department is reviewing the finances of the city of Lincoln Park and the East Detroit and Ecorse schools districts.