Let’s get wonky. What are the actual future steps in the Emergency Financial Manager process for Detroit?
Here’s the information straight from an expert. Steven Liedel, Senior Counsel at Dykema and government policy attorney with more than 20 years of experience relating to state and local government, laid it out on Twitter. We then talked to him. We unpacked it a little from the Twitter limits of 140 characters.
If we take yesterday’s events as a step one for purposes of this explanation, Governor Snyder took the review team’s recommendation and affirmed it. He had three choices. He could have said (a) there’s no emergency, or (b) there’s a problem, but he’ll work with a consent agreement, or (c) that there’s a financial emergency.
Governor Snyder picked option C. He has notified the city council and mayor in written form of his decision.
Step Two: Council or Mayor then have 10 days (March 11, 2013) to request a hearing by the Governor or designee (usually someone from Treasury).
Step Three: After a hearing or if no hearing, the Governor must confirm or revoke the financial emergency determination.
Step Four: The City may appeal to Wayne or Ingham Circuit Court. Their two arguments could be: was there insufficient evidence or was the decision arbitrary? (More on that here). Here’s the MCL code citing. If the appeal is denied, on to step five.
Step Five: The emergency must be assigned by Governor to the Local Emergency Financial Assistance Loan Board (LEFALB). That board includes (currently) State Treasurer Andy Dillon, Department of Technology, Management and Budget Director John Dixon, and Licensing and Regulatory Affair Director Steve Arwood.
Step Six: Technically, The Local Emergency Financial Assistance Loan Board, not the Governor, appoints emergency financial manager at an open meeting.