Detroit to Governor: We'll Fix Detroit

Detroit Mayor Dave Bing flanked by members of the City Council, labor leaders and clergy. They are saying that the city does not need an emergency manager., a photo by Pan-African News Wire File Photos on Flickr.

City to Snyder: We'll fix Detroit

1:41 AM, Dec. 2, 2011
Detroit Free Press

Setting up a political showdown with dramatic stakes for Detroit and the rest of the state, Mayor Dave Bing and the City Council vowed Thursday to oppose what Bing said were plans by Gov. Rick Snyder to begin reviewing the city's troubled books -- a move that could lead to the appointment of an emergency manager.

"This is our city. We are Detroit," Bing said at a City Hall news conference while flanked by corner support from most of the council, prominent business owners, pastors and union leaders. "Detroit needs to be run by Detroiters. We know what needs to be done, and we are ready to do it."

As reported on freep.com Thursday morning, Bing, who spoke with the governor on Wednesday, said he was told that Snyder is expected to call for a 30-day review of Detroit's finances as early as today.

The move would assess the city's financial stability and make recommendations. Within 90 days, Bing said, the state would then decide whether there is a need for an emergency manager.

Snyder spokeswoman Sara Wurfel told the Free Press that the governor had made no decision on whether to call for a financial review, but Bing disagreed.

"I did receive that call, and I am here today with City Council, labor, our community and businesses to say that we are opposed to the governor beginning this process.

"I'm here to say, with this group of supporters, that we don't need a financial manager," he said. "We can manage the city, and we intend to do that on a collective basis."

Snyder: State can help

Well aware of the bitter political fallout from the state's intervention of the Detroit Public Schools in 1999, Snyder, in an interview with the Free Press on Thursday, said the state's presence shouldn't alarm Detroiters because the initial intention is to help the mayor and council devise a plan that would avoid the need for an emergency manager.

"We should be working together," Snyder said. "This should be a working partnership. We have resources to help the city. We need to have a dialogue."

Snyder also said he has an obligation to protect the rest of the state from any fallout in the event of a Detroit financial collapse. A Detroit bankruptcy, for example, could lead to a larger exodus from the state and more damage to the credit scores of neighboring communities, which would make it difficult for the suburbs to borrow money.

"The city is not separate from Michigan," Snyder said. "We are all in this together. Detroit is part of the state of Michigan, and the citizens of the city of Detroit are my citizens as governor of Michigan, so I have a fiduciary duty to make sure I am looking out for everyone."

Detroit officials are fearful of an emergency manager because the position wields a lot of power. An emergency manager would have the authority to end union contracts, sell assets -- such as Cobo Center, Belle Isle and the water system -- and fire the council and its staff.

But, despite the sharp rhetoric and display of unity at Thursday's news conference, neither Bing nor the council have been able to agree on a long-range plan to prevent the city from running out of money to pay its bills by the spring or eliminate its $200-million accumulated deficit.

And despite their pleas and predictions of financial ruin, the 48 unions that represent the bulk of the city's employees have so far refused to accept the deep concessions on health care and benefits that Bing and the council said are needed to avert financial ruin.

Bing said a plan to shave $102 million off this fiscal year's budget -- through at least 1,000 employee layoffs and union concessions -- would provide some financial stability. The council also bandied about a plan that would lay off 2,300 workers. The council has been unable to agree on a final proposal.

Unions not budging

Whether council members, Bing and labor unions are able to settle on negotiations that will satisfy the state remains a nagging question. Though they stood together in defiance of state intervention, many labor leaders said Thursday they've taken enough concessions.

Unions representing police and firefighters steadfastly declined to negotiate any more concessions.

"Our members sacrifice their lives every day," said Junetta Wynn, president of the Detroit Police Lieutenants and Sergeants Association, which represents about 590 employees who recently took concessions in benefits. "We've given up enough. They serve with their life."

Firefighters also were unyielding.

"Firefighters have done more than enough," Dan McNamara, president of the Detroit Fire Fighters Association, said of past concessions. "We are bare bones right now. The public will be put at risk because you will push away firefighters who need to support families with decent benefits."

But Bing said union leaders understand the dire situation Detroit is in and are ready to negotiate. The mayor is asking for an across-the-board 10% pay reduction for employees and heftier contributions to health care coverage.

Councilwoman JoAnn Watson said the state should get hold of its own budget shortfalls before worrying about Detroit's.

"It is outrageous that a state with its huge deficit has the nerve to be pointing fingers at our city that has a right to local self-determination," Watson said. "We do not accept it; we will not accept it."

Overall, Bing said, city officials are making progress and moving closer to addressing the fiscal crisis. And instead of threats of an emergency manager, he implored the state to help the city right its finances. The mayor said the city has requested assistance from Lansing to collect income taxes, approximately $155 million in additional revenue annually.

In addition, he said the state owes Detroit $220 million in revenue sharing, and failure to pay sends "a disturbing signal to our community."

In 1998, the city agreed to lower its city income tax from 3% to 2% over a 10-year period in exchange for guaranteed levels of state revenue-sharing funds.

The law allowed the city to suspend the tax decreases should unemployment go above 10%, which occurred in 2003. The city suspended the incremental tax decreases in 2004, leaving the tax at 2.5%. Bing said the city is still owed money from the state and the amount owed is enough to eliminate the city's current structural deficit.

"I am leaving no stone unturned, and before the state takes any action, they must commit to do the same," he said.

The case for a manager

Pontiac emergency manager Louis Schimmel said Detroit would benefit from an outside expert because politicians rarely make the unpopular cuts.

Schimmel said the city may be able to save money by selling the water and sewage system, outsourcing services and reducing employee benefits.

"If you want to avoid an emergency manager, you at least should put out there a really bold plan," Schimmel said. "When you have debt, you can only pay for what is essential. Everything else must go."

Al Garrett, president of the 60,000-member Michigan chapter of the American Federation of State, County and Municipal Employees, Council 2, said state leaders have done nothing to demonstrate fiscal responsibility, and any change must come from within the city.

"We will do what we can to save our city and to provide services for the citizens of the city of Detroit," Garrett said. "It requires hard work. We're resolved to do the hard work and work out the problems in the city of Detroit. EMs are not allowed -- the city is closed with regards to that."

UAW President Bob King said Detroit is capable of a financial revival similar to the auto industry, which lost billions in revenue but survived bankruptcies, leadership shake-ups and government bailouts.

"We believe that the people in Detroit should determine the destiny of the people in Detroit," King said.

Bing thanked God that so many united with him to denounce Snyder's plan.

"This is our defining moment, and we are going to take it and run with it," Bing said.

Contact Suzette Hackney: 313-222-6678 or shackney@freepress.com