City Councilwoman JoAnn Watson speaking at the Moratorium NOW! Coalition day-long conference in Detroit on how the banks destroyed the city. Watson put forward a proposal for marshall plan for Detroit. (Photo: Abayomi Azikiwe), a photo by Pan-African News Wire File Photos on Flickr.
Mayor Bing to Detroit City Council: Lawsuit must be dropped or 'we're dead'
9:31 AM, June 11, 2012
Mayor Dave Bing bluntly told the City Council this morning that city leaders are playing a dangerous game if they do not get the city’s top lawyer pull back on a lawsuit that could lead the state to withhold millions in revenue sharing.
By Matt Helms
Detroit Free Press Staff Writer
Mayor Dave Bing bluntly told the City Council this morning that city leaders are playing a dangerous game if they do not get the city’s top lawyer pull back on a lawsuit that could lead the state to withhold millions in revenue sharing, pushing the city to go broke by Friday.
Bing told the council he spoke with Gov. Rick Snyder and Treasurer Andy Dillon over the weekend, and they’re not going to back down on their demand that a legal challenge by the city’s top lawyer, Krystal Crittendon, be dropped or the state will begin withholding $80 million in revenue sharing. That would lead Detroit to run out of cash by Friday.
“Without that, we’re dead,” Bing said. “I don’t want to play this game of roulette and keep our citizens at risk.” Snyder and Dillon “have the hammer right now. They’ve got the money.”
Detroit’s Chief Operating Officer, Chris Brown, said the city risks being unable to pay vendors and or city workers if Crittendon’s legal challenge isn’t stopped.
Bing asked the council to vote to ask Crittendon to withdraw her lawsuit, but several council members said they couldn’t do anything to force her to change her mind, short of removing her from office. Neither Bing nor the council said they wanted to do that.
The council took no action, and Bing and his top aides left the meeting without speaking to the media afterward. Asked what happens next, Bing’s chief financial officer declined comment before getting on an elevator.
Councilwoman Saunteel Jenkins had told Bing that even if the council voted to ask Crittendon to pull back, it would be at best a symbolic gesture. Even those who disagree with her opinion don’t want her fired, Jenkins and several other council members indicated.
“You called this meeting to ask us to do something we can’t do,” which is to force Crittendon, the city’s law department chief, to drop her legal challenge, Jenkins said.
Crittendon filed suit last week saying the city’s financial stability agreement, approved April 4, violates the city charter. She says the state owes Detroit $224 million in revenue sharing and millions more in other unpaid bills, and by law Detroit can’t enter into contracts with entities in default to the city.
The state sent a letter to the city’s new chief financial officer, Jack Martin, saying that Crittendon’s opinion undermines the consent agreement, and the state will withhold revenue sharing payments to make sure bonds issued to pay the city’s debts will be repaid.
Martin said a $34 million bond payment is due this week, and the city planned to use a $35 million revenue sharing payment from the state to pay it. Without the money, Detroit will be out of cash.
Council President Pro Tem Gary Brown called Friday a D-Day and said he doubts the state is bluffing.
“I wouldn’t want to risk that,” Brown said.
Brown made a motion to have the council vote to ask Crittendon to drop her challenge, but city staff said the council couldn’t take such an action today because Bing hadn’t asked the council to do so in advance.
Councilwoman JoAnn Watson said the state “has no right to declare it’s not going to be held to the bond agreement” that would pay the city $137 million in bonds to help it stay afloat.
“We should stand together and demand that they honor their agreement,” she said. “The demand should be on the state of Michigan.”
Contact Matt Helms: firstname.lastname@example.org, @matthelms or 313-222-1450.