Thursday, December 27, 2012

Conservative Bloc of Detroit City Council Offers Greater Concessions to the Banks

Detroit council members say plan to stave off emergency manager presented to state

1:02 PM, December 27, 2012
By Bill Laitner
Detroit Free Press Staff Writer

The Detroit City Council has sent a plan to state Treasurer Andy Dillon that calls for deeper cuts to the city’s bottom line than the mayor has proposed, including the selling of some city assets, council members said today.

Six members of the city council told the Free Press editorial board that their plan goes beyond what Mayor Dave Bing has proposed n way of layoffs and furloughs in helping fix the city’s fiscal woes and that it is doable should the mayor execute it in time to avoid having Gov. Rick Snyder appoint an emergency manager to take over the financial operation of the city.

“We’ve been working much more closely with the mayor’s office in the last month because we realize the urgency of this,” Council President Charles Pugh said.

In an unprecedented appearance, five members of the council visited the Free Press today — with a sixth member, Council Pro Tem Gary Brown, appearing via Skype from Florida.

The council member said they stand ready, as they have been for months, to work with Mayor Dave Bing and “make the necessary sacrifices” to stem the city’s unsustainable cash burn, Councilman Ken Cockrel said.

The council members said the fiscal plan that was sent to Dillon Wednesday calls for extensive layoffs of city employees, furloughs, the selling of some city assets and possible wage reductions. The would not give specific details as to how many jobs would be at stake and what assets could be sold.

Cockrel said one of his suggestions is to have the city stop performing certain services that, he said, the city shouldn’t be in the business of delivering, such as the maintenance and operation of three cemeteries.

In addition to the plan sent to Dillon, the city council’s fiscal analysis division is finalizing a more short-term plan with Bing’s office that would address the immediate crisis of the city quickly burning through its cash. The state released $10 million in bond money that the city had secured this summer but was being held in an escrow account by the state.

The city, millions of dollars in debt and struggling to function under a city-state approved consent agreement, is operating in the shadows of a potential appointment of an emergency financial manager. The state last week appointed a financial review team to assess the city’s fiscal condition to determine whether a financial emergency exists. Should the team make such declaration, the governor’s office could appoint a manager who would have sweeping powers to make financial decisions about the city’s operations.

Short of appointing an emergency financial manager, Snyder could call for a new consent agreement. The city’s current agreement, signed last April, was created based partly on Public Act 72, the current law, and Public Act 4, the law that voters repealed in November. Snyder signed a new emergency managers law today. It was passed earlier this month by a lame-duck Legislature and has been criticized by some as going against the will of the majority of voters in November. The new law goes into effect this spring.

“A consent agreement is an option, probably the best option,” said Councilwoman Saunteel Jenkins, to the agreement of other council members.

Some say Detroit’s flow of red ink could bankrupt the city in weeks or months, although Pugh said he had been assured that the city could pay its bills at least into January.

“We have been in communication with Andy Dllion and we’re not in danger of running out of cash by the end of the year.

“But the time for six-month plans is over. We need to be working toward the next two weeks, four weeks,” he said.

Jenkins said despite the council’s hard work and best intentions, it will take action by Bing to achieve most of the key changes needed that will both cut costs and improve services — such as restructuring the police department, which now has only about one-third of its officers assigned to patrol duties.

Council members said the public should be reminded that it was the council for two consecutive years that rejected the mayor’s first proposed budgets, saying they did not cut deep enough to realize any savings. Both years the council’s responded to Bing’s proposed budgets with additional cuts, that were then rejected by the mayor’s office. City budgets must be approved by the city council and Bing’s latest was approved without much prolonged debate.

“The mayor has missed an opportunity to take advantage of a council that understands a city’s finances. We should have held firm,” Cockrel said.

The council members said that they are concerned that much of the work, disagreements and cooperation within the council is not shared with the public.

“The mayor’s office (has) their spin doctors. There are nine of us and we have a different way of expressing ourselves. Often, we’ve been on the wrong end of news coverage” and wrongly painted as obstructionists, Pugh said.

Also attending the meeting were council members James Tate and Andre Spivey.

Contact Bill Laitner: 313-223-4485 or

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