Injunction puts Detroit consent agreement in doubt; state review team to meet Wednesday

Mar 20, 2012

Legal wrangling over Public Act 4, Michigan’s emergency manager law, has put the state’s ability to work out a consent agreement with Detroit in jeopardy.

State leaders and some Detroit officials want to work out an agreement that would prevent the city from going broke in the next couple of months—without appointing an emergency manager.

But Ingham County Circuit Court Judge William Collette has now forbidden them from doing just that until at least March 29th—three days after the scheduled deadline for the Detroit state review team to recommend a course of action to Governor Snyder.

The ruling stems from an ongoing case that accused the state review process of violating the Michigan Open Meetings Act. Judge Collette has ordered the review team to meet publicly.

But the state says it will fight the injunction, and try to get a deal with Detroit before its initial March 26th deadline.

In the meantime, both state and city officials are struggling to figure out how this affects their options for avoiding a fiscal catastrophe in Detroit.

City Council President Charles Pugh says the legal drama has left him “stumped”—but his main focus is still the city’s financial condition.

“We care more about not having a payless pay day, and then fixing some structural issues that we’re dealing with,” Pugh said.

“We’re thinking mostly about fiscal stability in the city of Detroit. This not about Public Act 4.”

City Council member Saunteel Jenkins says they need to keep their eye on the ball.

 “The city’s still running out of cash, and we still need the state’s assistance,” Jenkins said. “Whether it’s a consent agreement or not, we need to move forward with figuring out how the state and the city can work in a partnership to get us out of our financial crisis.”

Detroit Mayor Dave Bing released a statement that read: “The city respects the judicial process and will simply follow the judge’s order.”

In the meantime, the credit rating agency Moody's downgraded Detroit's debt rating, citing the city's "weak liquidity profile."

The Detroit state review team is slated to meet Wednesday to “discuss possible options.”