State review team talks options for Detroit

Mar 21, 2012

The state review team looking at Detroit’s finances met again Wednesday, and formally declared the city to be in “severe financial distress.”

This means the review team will recommend some kind of state intervention in Detroit—whether it’s a consent agreement outlining steps the city must take to get out of financial distress (and likely giving elected officials some greater powers to take them), or appointing an emergency manager for the city.

Team members discussed what provisions they’d like to see in any potential consent agreement.

One of the biggest issues: how much authority a proposed “financial advisory board” should have in overseeing Detroit’s finances, and stepping in to intervene if city officials don’t follow through.

Team member Jack Martin, who is also emergency manager of the Highland Park Public Schools, argued for a board with powers to hold the city accountable for implementing reforms.

“It can’t be a situation where we just take the word of the city that they will do everything that’s required and we’ll have a healthy, vital, financially viable Detroit in three years,” Martin said. “You’ve gotta have an enforcement mechanism in there, or I can guarantee you it won’t work.”

State Treasurer Andy Dillon, who leads the review team, is also meeting privately with Detroit city officials. Dillon says they’ve given him their own version of a consent agreement to review.

Both Mayor Dave Bing and City Council would need to sign off on such a deal.

That’s left some review team members, including Shirley Stancato, questioning their role in the whole process.

 “The Governor, last week, has publicly committed to the consent agreement process,” Stancato said. “Now the Mayor and City Council have been working toward a response to the Governor’s draft. I know this, just as everybody else here does, because I read it in the newspapers.”

A Judge has issued an injunction forbidding a consent agreement before March 29th. The review team’s deadline to make a recommendation is March 26th.

But the state is appealing the injunction. Arguments are slated for Thursday in the Michigan Court of Appeals.