Attempt to resolve Detroit cash crisis hits technical snag

Nov 26, 2012

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.

But city lawyers called the meeting off after deciding the public hadn’t been properly notified. And Bing didn’t attend the meeting, citing a family emergency. He sent Deputy Mayor Kirk Lewis in his stead—a move that irked some Council members.

“Mayor Bing regrets that in the midst of a financial crisis, the City's most urgent business has once again been put on hold before the Detroit City Council,” Lewis said in a statement.

Lewis said Bing is “determined” to bring the Miller Canfield contract and “a City pension fund matter, which affects state revenue sharing” back before Council next week.

In the meantime, officials are planning unpaid furlough days for city employees starting January 1 if the state continues withholding the bond money. The city faces a project $18 million cash shortfall next month, and it’s unclear how the furlough days would help avoid that.

Council President Charles Pugh says it’s “disappointing” the situation has come down to this.

“We should not be arguing over whether money the city set aside, responsibly, earlier this year, so that we would not run out of cash at the end of the fiscal year, is being held up over one lawyer contract,” said Pugh.

“I was hoping he would be here to explain why this law firm contract is that important to him.”