Gov. Rick Snyder has appointed a review team to look at the finances of Lincoln Park.
The review is part of the process under state law that could lead to the appointment of an emergency manager. The review team was announced Monday.
A loan board determined last month that "probable financial stress" exists in Lincoln Park, southwest of Detroit.
Lincoln Park borrowed $2.5 million from its water and sewer fund for a pension payment in fiscal year 2013, and 46 percent of its general fund revenues in fiscal 2012 went to debt payments and retirement obligations.
The review team has 60 days to report back to Snyder.
Emergency managers now are in charge of municipal operations in Detroit, Allen Park, Benton Harbor, Flint, Hamtramck, Pontiac and several school districts.