How much money is in Detroit's bank account? "Nobody really knows"
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.
The Financial Advisory Board and consent agreement were supposed to help Detroit get ahold of just these types of problems.
But Burks and other board members say they’re frustrated by the continued murkiness of the city’s financial picture.
“Everyone wants the answer, but one wants to go through the process of getting it,” Burks said. “And the reality is, no one can predict. You’ve got a billion dollar budget, no one is gonna be exact.”
Burks says the biggest concern is the cash flow picture seems to be worsening each month—and no one has put forth a solid plan to address that.
Detroit State Senator Bert Johnson says the situation isn’t helped by the fact that no one seems to know who’s in charge right now—the state treasurer's office, Mayor Dave Bing, the Detroit City Council, or some combination of them.
“It begs the question: who comes up with the real plan to help the city of Detroit get back on its feet, and what type of money is going to be necessary to help the city fix itself?” Johnson said.
Johnson says it’s also become increasingly clear that “no one really knows” how much money the city “does or does not have in its bank account.”
The latest city figures project a $122 million dollar cash hole when the fiscal year ends in June.
That figure has skyrocketed since just last month, when officials projected a $47 million cash deficiency.