FLINT, Michigan — Calling it a "new day" for the long-troubled city, Gov. Rick Snyder declared an end to Flint's financial emergency Wednesday after the state approved a $7 million loan to eliminate a budget deficit.
Flint has been run by a succession of emergency managers appointed by Snyder since 2011. The city is returning to local control, although a five-member transition board will have a significant role in reviewing major contracts and budgets.
"This is a new day for Flint, and the city is ready to move toward a brighter future," Snyder said.
A $51 million budget that starts July 1 will have no deficit, The Flint Journal reported.
Mayor Dayne Walling said the challenges "have been massive."
"I believe with all my heart that Flint is ready for this change. ... We can't go back to fighting old battles or settling old scores. We have another chance," said Walling, who was re-elected in 2011 on the day a financial emergency was declared.
Flint, the birthplace of General Motors, once had 200,000 residents but its population has fallen below 100,000. It has been compared to Detroit on a smaller scale, with lost jobs, blocks of blight and significant crime.
In 2011, a review team found the city's finances were a mess. Money from the water department was used to patch the budget, although the water department had its own deficit. Cash earmarked for streets, sewage and other priorities was also being used.
Long-term liabilities now have been reduced to $240 million, from $850 million, according to the state. New employees are being placed in a different pension plan.
The interest rate on the state loan won't exceed 3 percent. The annual cost of the loan is expected to be less than $600,000.
"It's another step towards ensuring our long-term financial stability, and I appreciate the state granting the loan," said Josh Freeman, city council president.
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