LANSING, Mich., Jan 10 (Reuters) - The struggling city of
Detroit is on track to run out of money in May instead
of April after spending changes made by city officials,
Michigan Treasurer Andy Dillon said on Tuesday.
Dillon addressed the media following a two-and-a-half-hour
meeting with a team that is looking at Detroit's financial
picture and trying to assess whether the city needs an
emergency manager to take over operations.
It was the first time the 10-member team met since it was
appointed last month.
Detroit's most urgent issue is figuring out how to
arrest escalating retiree health care costs, and clean up a
balance sheet laden in debt and interest costs, Dillon said.
Detroit Mayor Dave Bing had earlier predicted it would run out
of money in April if spending wasn't curbed.
"It's my understanding that April has been pushed back to
May," Dillon said, noting that the mayor "needs concessions
from labor to avoid running short of cash."
Dillon said the team met with a "sense of urgency ... and
there was also anger," because members of the team asked "how
come we didn't know the numbers were this bad?'" he said.
He said the team -- which includes a retired Detroit police
chief and former Michigan Supreme Court justice -- used audited
financial statements and a report furnished by the business
community as a basis for their initial meeting.
Dillon expects to make a recommendation on a Detroit
emergency manager within the next 50 days. As his team digs
into Detroit finances, Detroit Mayor Dave Bing is working to
extract significant concessions from labor unions.
If Bing delivers a convincing cost-cutting plan to the
state, Dillon said he would be able to suspend the work of the
financial review team. Bing has said he expects to deliver a
plan in early February.
The team was named by Governor Rick Snyder after a
preliminary review of city finances showed "probable financial
stress" after Detroit was unable to tackle mounting deficits.
Detroit, with a population of 714,000, has faced hard times
as the contraction of the auto industry has led to a dwindling
population and lower revenues. More than 36 percent of the
Motor City's residents live below the poverty line, according
to the U.S. Census Bureau.
Dillon's team will meet with Bing administration officials,
members of the city council and labor unions in coming weeks.
Dillon said that although this is a financial review, it's also
a review of the "quality of life."
The panel wants to "make sure residents aren't waiting for
a bus to arrive, or when they call 911 public safety
arrives...to make sure people are safe in the neighborhoods and
there is lighting in the neighborhoods."
http://www.chicagotribune.com/sns-rt-detroit-michigantreasurern1e8090bm-20120110,0,5189996.story