Detroit, state reach deal to get cash to city
Detroit Mayor Dave Bing has reached a deal with the state Treasurer that will allow the city to tap the proceeds of a $137 million dollar bond sale, and avoid payless paydays.
Under the terms of the deal, Detroit has to meet certain benchmarks. They include hiring a firm to restructure the city's finances, and another firm to implement those recommendations. Outsourcing the city's payroll system and changing the way contracts are bid out are also part of the benchmarks.
Mayor Bing says the agreement will help the city make changes it needs, and avoid running out of cash as early as next month.
"We're asking for $10 million in the month of November. We meet the milestones we've agreed upon, we're asking for $20 million in December, and then we've got another $50 million that will be held in escrow at a later date," Bing said.
A state authority sold bonds over the summer. The city has gotten some of that money. But state officials refused to release more until the city made progress on some financial reforms.
In a statement, State Treasurer Andy Dillon says funds from the bond sale were never intended to fund the status quo in Detroit. He says some progress has been made since the city entered into a consent agreement with the state in June. But he says it's moving slower than anticipated.
Click here to see the agreement.