Disputes continue over Detroit's consent agreement, but there is good news

Jennifer White and Mercedes Mejia — Wed, 04 Jul 2012 14:15:58 +0000

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?