The recommendation accompanies the review team’s report to Gov. Rick Snyder, which says a “local government financial emergency” exists in the city, and “no satisfactory plan exists to resolve the emergency.”

The review team declined to pursue the option of a “consent agreement” with local elected leaders to resolve the financial problems because “it would not afford an efficacious remedy to the financial emergency,” according to the team’s 10-page report.

Michigan Department of Treasury Spokesman Terry Stanton said Snyder concurred with the unanimous opinion by the financial review team.

The city has seven days to request a hearing in front of the governor or his designee, Stanton said.

Mark Brewer, chairman of the Michigan Democratic Party, immediately released a statement blaming Snyder and the Republican-led state legislature for deep cuts in revenue sharing that made the city’s financial situation worse:

“Today’s announcement regarding Flint’s finances on Election Day in Flint is despicable and clearly politically motivated. The so-called crisis in Flint is a creation of the Governor’s policy attacks on our urban areas and working families. Earlier this year, the Governor chose to pass on the state’s financial problems to local communities like Flint by cutting their revenue sharing by 50%. That meant a $8 million cut in revenues to the City of Flint. Was there any question that that type of cut would have a negative impact on the city’s finances? Snyder, Treasurer Dillon and the Republicans should be ashamed of themselves for creating a false emergency like this for their own political gain.”

On Friday Flint Mayor Dayne Walling announced that the Treasury Dept. has initiated an official review of the city’s finances.

Under Public Act 4 — the Emergency Manager law — financial review is the first step in a process that can confer new powers to elected officials or transfer all decision-making power to an Emergency Manager who reports only to the Treasury Dept. and the governor.

Benton Harbor, Pontiac, Ecorse and the Detroit Public Schools are now being run by Emergency Managers.

Brandon Jessup of Michigan Forward is a coordinator of the campaign to repeal the Emergency Manager law.

Jessup says that Treasurer Andy Dillon is not treating communities equally.

Flint, facing a $2 million deficit is under review when other municipalities, Allen Park and Jackson were refused preliminary reviews. In May Jackson mayor Karen Dunigan requested a preliminary review from the state’s treasury department based on the city’s accumulated pension debt of $20 million and $47 million in bonded debt. Allen Park followed suit, citing the city’s bond rating falling to BBB. Both of these cities would be granted a review under the new law, since they’ve hit a few of the laws triggers; however Michigan’s Treasurer denied both municipalities a preliminary hearing.

Board assistant secretary-treasurer Vera Perry said the lower pay rate included in the bids for custodial services – from $15 per hour to $8.25 – were too harsh.

“To me, you’re asking them to go into bankruptcy,” Perry said.

“This is ridiculous, it’s politics,” said board member David Davenport.

Ed Dollin, director of operations for both FEATS and METS [the company with the low bid for pest control services], said the companies could negotiate with the district on pay rates.

“We’re going to give every one of those people (currently on staff) an opportunity to work for us,” Dollin said. “You guys can set the salary.”

The board has agreed to continue discussion on outsourcing custodial and other services.

Officials expect a final 2011-12 budget to be prepared by June 1.

The city council is expected to consider the matter this week, AP reports.

“There’s an ongoing, severe financial crisis that can’t be swept under the rug,” Walling said. “The changes need to be made as soon as possible, either with voluntary concessions or a consent agreement.”

The city’s police unions have said they will challenge an attempt to put new contracts in place without collective bargaining.

Flint has received at least $8 million in emergency bonds from the state to cover payroll this year.

In March Walling said that double digit concessions from union workers could prevent state takeover of the town.

The current percentage of counties facing natural decline is actually down from an all-time high of nearly 32 percent back in 2002, though it’s still higher than it had been in the years following that spike. The declining birthrate since the onset of the recession is thought to be at least partly responsible for the rise in dying counties.

And yet the decline in rural- and small-industry communities, devastating though it may be to economies like that of West Virginia (the state with the highest rate of natural decrease), is nothing new given that the peak came in 2002. It’s a continuation of an inexorable trend toward urbanization that began with the industrial revolution, and it’s no surprise that such rural areas and small towns have an aging population. Perhaps even more striking, then, is a measure of population change barely touched upon in the AP story and best viewed through the lens of a separate selection of Census data.

“Natural decrease” is, in a sense, just that: a natural consequence of urbanization and an aging population. Not quite so “natural,” however, is the phenomenon of dying cities, which is hinted at in some of the county data available from the Census, but is more clearly seen in a set of data looking at metropolitan population changes. The Census Bureau’s Metropolitan and Micropolitan Statistical Area population trend statistics show changes from July 2008 to July 2009. Sixty metropolitan areas across the U.S. hemorrhaged residents or simply stagnated in population during that one-year period. Unsurprisingly, Detroit tops the list of metropolitan areas losing residents, with a drop of more than 20,000 people in the greater Detroit area. The best way, however, to get a complete picture of just how cities like Detroit are dying is by comparing the metropolitan data with the slightly more detailed county data.

For instance, Wayne County, Mich., was hit the hardest by Detroit’s — to put it euphemistically — population shifts. Wayne, which has Detroit as its county seat and carries the lion’s share of Detroit’s commuter workers among the three counties that comprise the city’s greater metropolitan area, lost a grand total of 23,176 people in just that one year between summer 2008 and summer 2009. And that sum is offset by a relatively high birth rate and a continued stream of immigration into the area. Take births, deaths and international immigration out of the equation and Wayne County ends up with a net loss of 34,794 people. Of course, the actual number of people abandoning the area altogether may be yet higher, since that net-population-loss figure includes any new residents moving from other areas within the U.S., marginal though that trend may be.

The rest of the list of metropolitan areas posting population losses or stagnation is a grim reminder of the death of industry in the U.S. Despite having less than a tenth of Detroit’s total population, Flint, Mich., comes in second in terms of total population loss. Looking instead at percentage of population lost, Flint tops the list, with more than 1 percent of the population gone between 2008 and 2009. Other than a handful of Florida retirement communities on the list largely due to “natural decrease” and immigration-related demographic shifts, the rest are a laundry list of Rust Belt cities that were all once host to manufacturing powerhouses: Battle Creek and Saginaw, Mich.; Youngstown, Cleveland and Dayton, Ohio; Pittsburgh and Johnstown, Pa. And so the list goes on.

Although not all cities and counties in the country have been hit so hard — the Sun Belt has fared particularly well, with the Dallas area gaining more than 150,000 residents and the Hinesville, Ga., area posting a population gain of 5.9 percent, both in the same one-year period — overall population trends in the U.S. reflect the reality in cities like Detroit.

The Census reports that from 2000 to 2009, the U.S. population grew by 9.1 percent. This figure is many times higher than countries like Japan and Korea facing outright population growth crises, but it is the lowest rate the U.S. has seen in any decade since the Great Depression.

Genesee County’s deputy register of deeds, Shannon Cooper, was surprised when she reviewed the numbers for Michigan Messenger. Cooper found that in May and June last year, the county, home to Flint, had 709 foreclosure filings. In May and June of this year, there were only 183.

However, it wasn’t all good news. Ingham County, home to Lansing, reported a 20 percent increase in May and June over last year.

You can read Heywood’s full report here.

The movement calls for communities to cordon off mostly vacant areas, cut them off from city services and let the land return to nature. It’s headed by Genesee County Land Bank Chairman Dan Kildee, who has drawn national attention for his efforts. As TWI noted recently, Kildee has been asked by the Obama administration and by a group of charities to explore the shrinking cities approach for other communities beyond Flint.

But urban ideas that play well on the national stage don’t always have the same reception closer to home, the Messenger says.

Businessman Dayne Walling and former state representative and current Genesee County Commissioner Brenda Clack, both Democrats, are facing off against one another in an August election. Both candidates recently expressed some doubts about the movement — and pressed for more details. Walling, for example, noted that there are thousands of houses that need to be torn down, “but we need to make sure that residents have every opportunity to weigh in on the process. Every neighborhood needs a unique solution.”

From the Messenger:

Clack called the shrinkage push a “political bullet,” adding that she is worried about residents who are low income or senior citizens living in properties that the land bank might have its eyes on being left out of a place to live.

“I don’t believe in removing people,” she said. “In some areas there are one or two abandoned homes on a block that need to be torn down, but we don’t even have the money to tear them down.”

Clack said that the shrinkage idea would “not be a top priority” for her if she was elected mayor.

“You re-pattern the city, you don’t shrink it,” she said.

Both candidates said they were concerned over the current lack of specifics regarding the shrinkage push.

“It’s partly controversial because not that much is known about it,” Walling said. “Right now it seems more like a catch phrase, not a plan.”

Former Flint Interim Mayor Michael Brown had jumpstarted the shrinking cities idea by suggesting in March that the city should cut off service to abandoned areas as a way to deal with blight.

Now that the shrinking cities idea is a movement, it could be something that sounds like a great idea — unless it happens to be your neighborhood that’s on the chopping block.

But it also may be an idea that’s going to pick up steam elsewhere. The Obama administration is seriously considering supporting the shrinking cities movement as a way to address economic decline,  reports the British newspaper, The Telegraph.

The Telegraph dubbed the idea a “shrink to survive” approach, and said it is being headed by a familiar name to TWI readers: Dan Kildee, founder and chairman of the Genesee County Land Bank in Flint. TWI profiled Kildee and his land bank last year. Land banks allow cities to acquire and reuse vacant and abandoned properties.

Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country.

Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes.

Most are former industrial cities in the “rust belt” of America’s Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis.

The Telegraph has few other details on how this all is going to work. It’s also not clear how aggressively the Obama administration will embrace the idea. It’s true that in many ways, the shrinking cities movement is a “radical experiment,” as The Telegraph puts it. We are long accustomed in this country to the idea that only growth is good.

But the shrinking cities movement could quickly gain traction, despite its controversial nature. For all the towns and communities like Flint that have been smacked hard by the foreclosure crisis and are facing a deluge of abandoned and vacant properties, shrinking to survive soon may seem more like a smart move than a radical proposal.

As The Wall Street Journal reports today, other towns also in financial peril are considering another approach – “disincorporation.” It means dissolving a town — literally. That could allow residents to avoid paying local taxes, escape the costs of local services and pensions, and get other services more cheaply by sharing the costs with the surrounding county.

Disincorporations are rare, usually resulting from population declines that leave too few residents to support the government. The most recent in California occurred in 1972, when stalled growth and political instability led Cabazon to dissolve itself, according to the California Association of Local Agency Formation Commissions. In Washington state, the last one occurred in 1965, when Elberton gave up its autonomy after 70 years, according to the nonprofit Municipal Research and Services Center in Seattle.

Today, some small municipalities are exploring the step to escape some financial burdens that have been exacerbated by the recession.

Several small  towns in Washington state, Colorado, and California are considering disincorporation seriously, but it’s not clear whether they’ll have the legal authority to go through with it. Disincorporation wasn’t intended to be used by towns to escape financial burdens, according to The Journal. And besides, many counties and surrounding towns aren’t in much better financial shape, and are likely be reluctant to take on more costs.

Dissolving a town also means giving up a local government, with its ability to raise money through bond issues or taxes, and its control over development and zoning issues. The Journal described the move as a “once unthinkable” option for most communities. But as the shrinking cities movement and disincorporation attempts tell you, nothing’s off the table during a financial crisis.

Here’s Hungry Hungry Hippos:

While the story that Flint, Michigan, is considering bulldozing entire neighborhoods, blocking them off, and withdrawing city services from them is a sad and stark indicator of what’s happening in cities where the combination of the declining auto industry and the mortgage crisis are causing large population shifts, I’m not sure why Mary Kane thinks federal dollars would help avert it, or even why she thinks averting it is a good idea.

What interest does the federal government have in the city limits of Flint, Michigan?  What interest do we, as a society, have in keeping the residents of Flint, Michigan, living in Flint, Michigan, when their reason for being there is gone?

None, as far as I can tell.

Actually, I’m not talking about averting anything, and I’m sorry to have given that impression. Flint and other cities facing blight and looking to shrink their cities as a result may be going down exactly the right road. And, frankly, they may have little choice. But here’s the hard part: Reclaiming properties, tearing down blighted neighborhoods, reusing land on a large scale, and planning  for reconfiguring a city will take the kind of money many of these hard-hit places don’t have. They’ll need land banks, which are public authorities that can do these sorts of things. And those land banks need major resources and money from the government to reach the kind of capacity that will allow them to handle all this responsibility.

Flint is a leader in the shrinking-city movement because it has the Genesee County Land Bank, which is a model for the rest of the country. But as we’ve written, other communities are only now beginning to plan for land banks, and it can be a lengthy and expensive process to get one up and going. It took almost two years in Cleveland, where the foreclosure and abandonment crisis has been particularly severe. Unless the government gets behind these efforts, it’s like fighting a million-acre forest fire with a pick and a shovel, as housing expert Alan Mallach told us.

Mallach thinks the crisis requires a federal land bank. That may be a long time in coming, if it ever comes at all. Like Flint, other communities may be ready to join the shrinking city movement. But being ready – and having the money to actually make it work – are still two different things.