Hamtramck Avoids State Receivership

HAMTRAMCK — Embattled Mayor Gary Zych of Hamtramck, who wants to solve his city's financial problems by privatizing many city services, narrowly averted a state takeover of his city's finances in October after a five-member state review panel decided to give Hamtramck more time to clean up its financial difficulties.

The panel decided Oct. 5 to take no immediate action to remedy the city's budget troubles, said Fred Headen, chief of the Bureau of Local Government for the state Department of Treasury. Headen also heads the review team, which could have recommended that Hamtramck be put into receivership and that Gov. John Engler name a financial manager for the 17,000-resident city that is $2 million in debt. The Hamtramck City Council still must cut city spending by $630,000 during the fiscal year ending June 30, 2001.

So far, Mayor Zych has been unable to persuade the council to brave the objections of local public employee unions and vote in favor of plans that involve privatization. The city currently owes money to Detroit Edison, Michigan Consolidated Gas Co., and Ameritech, as well as Waste Management, which hauled rubbish to the city dump, and the Detroit Department of Water and Sewerage for water service.