HAMTRAMCK—The city of Hamtramck moved closer to a state takeover called for by embattled Mayor Gary Zych recently after the City Council voted not to approve the mayor's proposed 1999-2000 budget.

Zych has been in a prolonged fight with city employee unions over privatization of services he says cost so much that they have drained the city's finances to the vanishing point. Money problems have meant payless paydays for the city's approximately 200 employees and a $1.5-million deficit. "The city has been digging a hole because we've been spending beyond our means," Zych said.

The mayor's budget called for layoffs, which included seven police officers, and raises for department heads. It was defeated 3-2. In February, Zych asked the state to employ Public Act 72, a law allowing the state to review the city's financial records. Councilman Michael Witkowski, who has opposed Zych on a number of issues and voted against the budget, also wants the state to intervene. "I hope this means the state will step in a lot quicker," Witkowski told the Detroit Free Press following the budget vote.

Joseph Neal, steward of Local 666 of the American Federation of State, County, and Municipal Employees said his union will ask Wayne County Circuit Judge James Rashid to order the city not to implement any of the layoffs if the budget is finally approved.

In his State of the City address in February, Zych renewed his longstanding call to privatize the city's Department of Public Works (DPW), a move he believes could save the two-square-mile city $500,000 per year by taking more employees off the public payroll. Hamtramck has a city labor force of 200, with nearly 40 of those being DPW employees. Neighboring Highland Park, also a two-square-mile city, has about 2,000 more people than Hamtramck, but a city labor force of only 150, Zych pointed out.

Zych also noted that under state receivership, the city of Ecorse's city work force was reduced from 200 to 87 while services actually improved. Bankruptcy in that Detroit suburb happened because "city officials shrank from making tough decisions," he warned.

State Treasury officials are trying to make sense of Hamtramck's books in the first step of what could turn out to be state receivership.