The deficit in Ecorse's General Fund arose because Ecorse management failed to take the necessary actions to reduce expenditures in line with a declining revenue. As property assessments declined throughout the 1960s through the mid-1980s, property tax rates were increased to compensate. The General Fund deficit, which is a form of borrowing against future revenues, would eventually have to be resolved. The higher the deficit became, the deeper the reductions in staff or higher the judgment levies would have to be in the future.

At December 3, 1986, Ecorse's operations were such that immediate action was required. No 1987 fiscal year budget had been adopted by the Mayor and Council. When the deficit was discovered to have grown for the fiscal year ended June 30, 1986 in early December 1986, and the Council approved travel expenses for three Council members to attend a conference in San Antonio, Texas, Judge Dunn took bold actions to correct the problem. He appointed Mr. Louis Schimmel as Receiver over the entire Ecorse operations on December 3, 1986. The appointment was for a three year period.