Treasury to Review Highland Park and Royal Oak Township Finances

Contact: Terry Stanton, (517) 335-2167

Initial Step in PA 436 Process

September 4, 2013

LANSING, MI – The Michigan Department of Treasury will begin preliminary reviews of the finances of the City of Highland Park and Royal Oak Township, on Monday, September 9. A preliminary review is the initial step in the Public Act 436 (Local Financial Stability and Choice Act) process and can be conducted based on several statutory triggers.

Treasury today, notified both municipalities of the impending preliminary reviews, which are being conducted as a result of the following conditions:

City of Highland Park

• The city has failed to timely deposit minimum pension payments;
• The city has violated requirements of the uniform budgeting and accounting act;
• The city is in breach of its obligations under an approved deficit elimination plan; and
• The city has ended a fiscal year in a deficit condition.

Royal Oak Township

• The township has failed to timely deposit minimum pension payments;
• The township has violated requirements of the uniform budgeting and accounting act;
• The township has violated requirements of the revised municipal finance act;
• The local government is in breach of its obligations under an approved deficit elimination plan; and
• The township has failed to timely file annual financial reports (audits).

Under PA 436, Treasury has 30 days to complete the preliminary reviews. An interim report will be provided to each local unit within 20 days of the start of the review. Each municipality will have 5 days to provide comment to Treasury, before the final preliminary review is submitted to the Local Emergency Financial Assistance Loan Board (ELB) for its determination of whether probable financial stress exists.

If a financial emergency is eventually determined to exist, PA 436 ensures local officials have a strong voice in how a financial crisis in their community or school is remedied by choosing one of four options: a consent agreement; an emergency manager; a neutral evaluation process; or Chapter 9 bankruptcy.

For more information, visit the Local Government Fiscal Health page on the Department of Treasury’s website at www.michigan.gov/treasury.