Detroit consent agreement

City of Detroit

Detroit city officials are struggling to come up with a unified response to Governor Snyder’s decision to appoint an emergency financial manager.

They now have less than a week to decide if they want to challenge that. If they do, Governor Snyder has said a hearing will be held March 12.

Most members of the City Council want to at least pursue a public hearing challenging Snyder’s decision. But several say that’s difficult because Detroit mayor Dave Bing hasn’t publicly declared his position.

We should know more about Detroit’s grim financial situation on Tuesday.

That’s when Governor Snyder is expected to receive a long-awaited report on the city’s finances.

A state-appointed review team began the process in December. Governor Snyder gave the group an extension because he wanted them to take a deep dive into Detroit’s long-term debt--estimated at more than $12 billion.

Snyder's office declined comment on Monday. But speaking to reporters a couple of weeks ago, the Governor said he’ll move quickly after he gets the report.

“It will probably take a week or two for me to make a full analysis of the report, and then decisions will be made,” Snyder said. “My reputation is not one to be sitting on things rather than making decisions.”

It’s widely expected that the report will depict a city on the brink of insolvency, a mayor and City Council unable to handle it—and suggest further state intervention.

Detroit has had a “financial stability agreement” with Lansing for nearly a year, but the city’s financial picture has only worsened since then.

Snyder has acknowledged interviewing candidates to potentially serve as the city’s emergency manager.

Detroit can just barely avoid running out of cash this fiscal year--if it implements some key measures.

That’s what the city’s finance officials told its financial advisory board on Monday.

The premise to avoid insolvency involves some immediate cuts, some deferred payments—and a few big “ifs.”

Some of those measures are so-called “structural changes,” like mandatory furlough days, layoffs, and possible pension and health care changes. Others defer payments or take one-time opportunities to grab
cash.

Bing and City Council fire Detroit city attorney

Jan 8, 2013

Mayor Dave Bing, with the support of six city council members, has ousted Detroit’s top city lawyer, Krystal Crittendon.

Crittendon, a controversial figure at City Hall, had been criticized by Bing for her opposition to Detroit’s consent agreement with the state.

A preliminary state review of Detroit’s finances says “financial reporting problems” make it difficult to know where things actually stand.

The report was issued Friday, just days after state treasurer Andy Dillon initiated the process that could lead to an emergency financial manager.

It found Detroit has “significant cash flow problems.” But projections vary from month to month, “making it difficult to make informed decisions.”

Darrell Burks is a member of Detroit’s Financial Advisory Board, an appointed body mandated by Detroit’s consent agreement with Lansing.

Detroit’s march toward a state-appointed emergency financial manager appeared to speed up Monday, as State Treasurer Andy Dillon announced his intention to start the review process that could end up there.

The city’s financial advisory board voted to support Dillon's move to start the process. It can last up to 30 days under Public Act 72.

Board members heard ever-more dire news about the city’s finances during the meeting

Efforts to resolve a dispute that’s pushed Detroit to the brink of financial crisis flopped again on Monday.

Mayor Dave Bing called a special meeting with the City Council, hoping Council members would approve a contract with law firm Miller Canfield.

Lansing is sitting on $30 million in Detroit bond money because Council didn’t approve that contract, which was part of a “milestone agreement” between Bing and state officials.

Detroit mayor Dave Bing says he’ll resort to mandated employee furlough days before letting the city go broke.

The city is facing a likely $18 million cash shortfall next month. That’s despite having a consent agreement with the state that’s intended to avoid just such a crisis.

This week, the Detroit City Council voted down a contract with a law firm. That relatively small item was crucial to the city’s cash situation because it was part of a “milestone agreement” laying out conditions for releasing Detroit bond money the state is holding in escrow.

Detroit mayor Dave Bing says the Detroit City Council has pushed the city to the brink of another cash crisis.

The Council voted Tuesday to reject a contract with the law firm Miller-Canfield.

Bing maintains that approving that contract was part of a so-called “milestone agreement” with the state, which is holding $30 million Detroit bond money in escrow.

Sarah Cwiek / Michigan Radio

Without major changes, it looks like the proposal to turn Detroit’s Belle Isle into a state park doesn’t have a shot with the Detroit City Council.

City Council members blasted the proposal at a meeting Tuesday, calling it, among other things, “ridiculous” and “terrible.”

Mayor Dave Bing and Governor Snyder outlined the plan last week. It calls for the city to lease Belle Isle to the state for 30 years. In return, the Michigan Department of Natural Resources would maintain the island. The state would also make some as-yet-unspecified major upgrades.

Despite opposition from Governor Snyder, the Detroit City Council voted to put four proposed charter amendments on the November ballot.

Detroit and Lansing went through a long, contentious process before the two sides reached a consent agreement to keep the city from going broke.

But that agreement has faced resistance from some Council members.

Detroit police officers have won a day in court—and the temporary suspension of new contract terms that were set to go into effect in the coming week.

The case’s legal outcome could have major implications for Detroit’s consent agreement with the state.

Mayor Dave Bing imposed new contract terms on most city employees, including police, last month.

Those changes included a 10% pay cut, and throwing out old work rules—which led the department to implement new 12-hour shifts for officers.

Detroit’s Financial Advisory Board is charged with ensuring the city’s financial viability--and has sweeping powers to do that under the city’s consent agreement with Lansing.

But at a board meeting Monday, some Detroit police officers pleaded with the board to consider the human cost of their actions.

Like most city employees, most police officers are about to get hit with a 10% pay cut.

They also face other cutbacks and major changes—including working twelve-hour shifts—as the department, and the city, try to re-align in the face of major budget cuts.

Some Detroiters have expressed their displeasure with the Belle Isle plan.
Sarah Cwiek / Michigan Radio

Three Detroit City Council members led a rally opposing what they call a “state takeover” of Belle Isle Wednesday, saying plans to lease the park to the state amount to stealing a Detroit “jewel.”

State and city officials are in talks to lease the island park to the state, which would integrate it into the state parks system. The plan’s advocates say the state would make much-needed improvements to Belle Isle, while freeing up Detroit dollars for other uses.

Sarah Cwiek / Michigan Radio

Signs of a widening rift between Detroit and state officials cropped up Tuesday, as rhetoric heated up over what’s going to happen to Detroit’s Belle Isle.

According to news reports, Detroit Mayor Dave Bing said he’s rejected the state’s proposed offer to lease Belle Isle for 99 years.

A provision in Detroit’s consent agreement with Lansing provides for creating park funding for Belle Isle, while ensuring continued City ownership by designating  Belle Isle as part of a cooperative state relationship with Milliken State Park” on Detroit’s riverfront.

wikimedia commons

Rumors are running rampant in the Detroit Police Department after the city imposed a pay cut and changes to work rules on most officers.

That’s according to officers who spoke privately about what those changes will do to the city’s long-troubled police force.

Just before Mayor Dave Bing imposed the new contract terms, including a 10 percent pay cut, Detroit Police Chief Ralph Godbee Jr. praised his officers for their dedication.

“They could do other things," Godbee said. "Nobody has checked it in, nobody has hung up their badge and gun at the door.”

Detroit Mayor Dave Bing has imposed new contract terms on nearly all city workers.

The move comes a day after the Detroit City Council rejected those terms. But the city’s consent agreement with the state lets city officials impose them anyway.

Bing said it was a tough decision, but a necessary one.

“It’s not easy," he told reporters Wednesday morning. "I know it’s going to be difficult for a lot of people. But I’ve got to worry about 700,000 people in the city of Detroit, not just the workers.”

Dave Bing
Mayor Dave Bing / Facebook.com

Today, Detroit Mayor Dave Bing decided to go ahead and impose new contract terms that will cut wages by 10 percent and drastically change their work rules for many of Detroit's city union workers.

This decision comes after the Detroit City Council voted down the proposed plan yesterday, 5-4.

The race is on to impose new contracts on Detroit’s city unions, and city officials made the case for doing that before the Detroit City Council on Monday.

Detroit’s consent agreement with the state essentially allows it to get around the collective bargaining process.

Mayor Dave Bing has proposed new contract terms that will cut wages by 10 percent and drastically change work rules for most city workers.

But that’s not all. City officials also want the power to alter contract terms at almost any point.

Sarah Cwiek / Michigan Radio

Governor Snyder is ready to send bulldozers, cops and social welfare workers into Detroit.

Detroit Mayor Dave Bing confirmed reports Friday that the state is sending money and resources Detroit’s way.

The goal is to focus intensely on stabilizing several city neighborhoods, with an emphasis on demolishing vacant homes.

Bing says state and city officials chose the target neighborhoods jointly.

A court has once again rebuffed a Detroit city lawyer's attempts to have the city’s consent agreement with the state overturned.

Detroit’s corporation counsel, Krystal Crittendon, has pushed forward with a legal action that could un-do the consent agreement.

Crittendon maintains that legally, the city can’t enter into any contracts with the state because the state owes the city money.

Detroit’s top lawyer has apparently decided to fight on in her effort to challenge the city’s consent agreement with the state.

State officials warn the ongoing court battle threatens Detroit’s ability to “get back on track and move forward.”

Detroit corporation counsel Krystal Crittendon maintains the consent agreement is illegal because the state owes Detroit money, and the city can’t have a valid contract with a debtor.

But Ingham County Circuit Court Judge William Collette threw the case out, saying Crittendon had no authority to bring it.

Patricia Drury / flickr

It’s been a few months since the city of Detroit and the state entered into a consent agreement aimed at stabilizing the city’s finances. Since then, the financial advisory board has been formed, but there have been a few hiccups in the city’s progress, including a lawsuit brought by the city’s corporation counsel challenging the validity of the consent agreement.

Stephen Henderson is editorial page editor for the Free Press and the host of "American Black Journal.” He joined us to talk about developments around the consent agreement.

Jennifer White: Do you have a sense of whether progress in being made towards stabilizing the city?

Stephen Henderson: Well a little bit of progress has been made. We got some of the money the state promised to extend to us to keep the city from going bankrupt, and they sold about $80 million worth of bonds in the spring to do that. The second part of that funding though has been held up by this dispute about the city’s corporation counsel, and whether she can sue to stop the consent agreement from taking place. So that’s at least a little bit on hold right now. But of course we got some good news recently because the fiscal year changed over here in Detroit over the weekend. July 1 was the beginning of our fiscal year and so the city is a little bit cash rich right now, even though we still have a structural deficit. So, I think the emergency part of this might be subsiding but we still have big questions about how we’ll manage going forward.

JW:You mentioned the lawsuit brought forward by Krystal Crittendon, the city’s corporation counsel, challenging the consent agreement’s validity, and there was considerable push back from Mayor Bing and the Snyder administration. That included the threat that $28 million in revenue would be withheld from the city. When will there be resolution on that?

SH:I don’t know. That’s a big problem because she asserts that she can, on her own without the support of the mayor, challenge this agreement. Most lawyers and most judges in fact that I’ve talked to say that there’s no way she should be able to do that, but we have a city charter that does not make that terribly clear. So really to solve that problem we have to get back in to the charter and amend it. Of course it would all go away if she would just relent and say it’s not worth holding up the city’s entire existence over this question. But she’s been unable, or unwilling to do that so far.

JW:Does she have the support of city council members?

Detroit Mayor Dave Bing and city union representatives appear to be headed for a showdown over contract negotiations.

The heart of this disagreement is Detroit’s consent agreement with the state.

There’s language in there that allows the mayor to impose union contracts after previous contracts expire. Most city workers’ contracts expired June 1.

But in a scathing letter to Bing, union officials say it doesn’t exempt the city from bargaining with unions—something they haven’t done since the two sides reached tentative agreements in February.

Detroit Mayor Dave Bing took questions from Detroiters during a “community conversation” at city hall Wednesday night.

Bing answered a wide range of questions from citizens, ranging from concerns about blight and crime, to leaking pipes and building permits.

But he also deflected some questions to his top officials, nearly a dozen of whom flanked him in a city auditorium.

Detroit Mayor Dave Bing went to the Detroit City Council Friday to formally tell them he wants to get rid of the city’s top lawyer.

Instead, he walked out of an abruptly-recessed meeting he later called a “sideshow.”

Bing has been at odds with Detroit’s corporation counsel, Krystal Crittendon, for weeks now.

City of Detroit

Detroit Mayor Dave Bing has asked the city’s top lawyer, Krystal Crittendon, to resign—and she’s refused.

Now, Bing says he’ll make a case for removing her to the Detroit City Council.

Crittendon recently went against Bing’s wishes by pressing a legal challenge to the city’s consent agreement with the state.

Crittendon said she was obligated to do that because she believed the consent agreement violated the city charter. And she insisted the charter allowed her to act independently of Bing.

The Detroit City Council is moving ahead to implement the city’s consent agreement with the state.

The Council had delayed appointing its two members to a nine-member financial advisory board while the city’s corporation counsel challenged the consent deal in court.

Brother O'Mara / Flickr

Detroit pulls back from the brink... again

In another down-to-the-wire showdown, an Ingham County Judge ruled yesterday that Detroit's top lawyer had no standing to halt a consent agreement between the state and the city. If she had been successful, there were warnings the city would go bankrupt in a matter of days.

Sarah Cwiek follows the Detroit drama for Michigan Radio and she caught up with Mayor Dave Bing after the judge's ruling:

“We need to get on with running the city," Bing said. "The city is still in a crisis. And we can’t have all of these distractions and think we’re going to bring the city back.”

The first steps: convening the city’s nine-member financial advisory board. That’s a key provision of the consent agreement. Bing says they’ll meet for the first time Friday.

Signs of improving housing situation in Michigan

Bank repossessions of homes in Michigan have dropped more than 40 percent over the last year.

Michigan Radio's Steve Carmody reports the Metro Detroit area's home foreclosure rate fell faster last month than any other of the nation’s 20 largest cities.

Carmody spoke with Daren Bloomquist, a Realty Trac vice president:

“We’re seeing about the same number of properties start the foreclosure process in Michigan as we saw a year ago,” says Bloomquist,  “But, we’re seeing fewer...much fewer of those actually make it to a completed foreclosure where the property is repossessed by the bank.”

Michigan's unemployment rate ticks upward

Michigan’s unemployment rate for May increased by two-tenths of a percentage point to 8.5 percent.

What does it all mean?

The Michigan Department of Technology, Management & Budget says it means more people are actively looking for work, which means they get counted as "unemployed" (you only get counted as unemployed if you've been searching for a job in the last month):

“Michigan’s labor market in May and throughout early 2012 has been stable,” said Rick Waclawek, director of the Bureau of Labor Market Information and Strategic Initiatives. “The minor upturn in the state’s jobless rate in May was partially due to individuals entering or reentering the workforce looking for jobs.”

Judge William Collette of Ingham County Circuit Court dismissed a lawsuit by Detroit's top lawyer, Krystal Crittendon, this morning. She was challenging the city's consent agreement with the state. The judge ruled she didn't have standing to bring the case. We've been updating this post today.

Update 5:05 p.m.

Governor Rick Snyder said he’s also happy the judge threw out a legal challenge to the consent agreement the state made with the City of Detroit. The agreement was made to avoid the appointment of an emergency manager and to prevent the city from running out of money.  

"We’ve been continuing to work forward on our projects from the state perceptive while all this has gone on because we want to make sure we’re fulfilling our part of this," said Snyder. "It was a Detroit internal issue. I hope they continue to work hard to resolve their issue so they can continue to work hard to resolve their issues so they can work better between the mayor city council and corporate counsel."

Detroit's top lawyer argued the consent agreement was null and void because the state owes Detroit money. The state treasury denies that.

3:04 p.m.

Detroit Mayor Dave Bing says he’s happy a “distracting” court case brought by his own city attorney was dismissed Wednesday and the city can now follow through on its consent agreement with the state.

Bing said he was “not happy with” his corporation counsel’s decision to push the legal challenge—but insists that’s all in the past now.

“We need to get on with running the city," Bing said. "The city is still in a crisis. And we can’t have all of these distractions and think we’re going to bring the city back.”

The first steps: convening the city’s nine-member financial advisory board. That’s a key provision of the consent agreement. Bing says they’ll meet for the first time Friday.

11:59 a.m.

MPRN's Rick Pluta spoke with Michael Hodge, the lawyer who argued the case on Mayor Bing's behalf. Hodge said if the case went forward, it could have forced the city into bankruptcy this week.

From Pluta's report:

“The judge understood that financially, the stabilization agreement between the city and the state was an essential agreement to go forward and to continue to address the financial issues involving the city,” said Hodge.

Detroit Corporate Counsel Krystal Crittendon argued the agreement is not valid because the state owes the city millions of dollars. The judge’s decision does not address the question. The state Treasury says Detroit is not owed any money.

10:40 a.m.

Judge William Collette of Ingham County Circuit Court dismissed the lawsuit by Detroit's top lawyer Krystal Crittendon challenging the city's consent agreement with the state of Michigan this morning.

MPRN's Rick Pluta reports Judge William Collette said it was obvious Crittendon could not go forward with her lawsuit without the support of Mayor Bing or city council. He said Crittendon did not have the authority to file the lawsuit on her own.

Collette also said Detroit's consent agreement with the state of Michigan is in place and people will just have to live with it.

Mayor Dave Bing is holding a press conference at 11:15 a.m. Michigan Radio's Sarah Cwiek will be there.

And Gov. Risk Snyder will meet with members of the media at noon today. Michigan Radio's Lindsey Smith will bring us reaction from Mr. Snyder

Pages