Detroit consent agreement

Dave Hogg / Flickr

DETROIT (AP) - Detroit Mayor Dave Bing says he won't accept the position of emergency manager for the city even if it's offered by the state.

The mayor's remarks came Wednesday during a forum at Wayne County Community College District, one day after state officials delivered a proposed consent agreement for the city. The proposal was an ultimatum that would shift political power, consolidate public utilities and shrink city staff and salaries.

Bing says he disagrees with the proposed consent deal and had no input in the consent agreement proposed by Gov. Rick Snyder and Treasurer Andy Dillon.

Detroit is facing cash flow problems and a $197 million budget deficit. A state review team has already been digging into its troubled finances, and the governor could appoint an emergency manager.

Sadly, it appears that the state of Michigan will be taking over the city of Detroit, one way or another. There are a lot of reasons that this is a tragedy, and also a few reasons to be happy about this.

However the next few weeks play out, the city, one way or another, seems likely to get the help it needs to straighten out decades of terribly mismanaged finances. Yesterday, Governor Snyder announced details of a proposed “consent agreement” which would bring radical change and fiscal responsibility to Detroit.

user brother o'mara / Flickr

Michigan-based bank among those to fail stress test

Ally Financial, headquartered in Detroit, made the Federal Reserve's list of major banks that failed to show they have enough capital to survive another serious downturn.

From the Associated Press:

The Federal Reserve says 15 of the 19 major banks stress-tested passed. The Fed noted that all 19 banks are in a much stronger position than immediately after the 2008 financial crisis. Still, SunTrust, Ally Financial and MetLife joined Citi in failing to meet the test's minimum capital requirements.

Ally Financial released a statement saying the Fed's analysis "dramatically overstates potential contingent mortgage risk, especially with respect to newer vintages of loans."

The Fed reviewed the bank balance sheets to determine whether they could withstand a crisis that sends unemployment to 13 percent, causes stock prices to be cut in half and lowers home prices 21 percent from today's levels.

Mixed reactions to Gov. Snyder's consent agreement plan for Detroit rescue

Yesterday, Detroit City Council saw a proposed consent agreement put forward by Gov. Rick Snyder and state treasurer Andy Dillon. The agreement proposes a financial advisory board, among other things, to help right Detroit's financial problems.

The initial reaction from many on city council and Mayor Dave Bing was negative - with several saying the plan takes too much power away from the city's elected leaders.

The Detroit Free Press gathered reaction from Detroit residents, which they say, was mixed. Here's one example:

Sherina Sharpe, 31, a lifelong Detroit resident who teaches writing, said she doesn't know what the best course of action is, but she wants to see the city flourish and isn't ready to shoot down proposed solutions.

"I'm open to solutions as long as they actually benefit the people who live here," she said.

You can read the agreement and weigh-in with your thoughts here.

Broadband deal reaches across Big Mac and into the Upper Peninsula

The Mackinac Bridge won't just transport people and goods, it will also transport large packets of information under a new deal announced yesterday. From the Associated Press:

Gov. Rick Snyder on Tuesday announced a deal between the nonprofit Merit Network Inc. and the Mackinac Bridge Authority. It allows Merit Network to purchase strands of cable crossing the 5-mile-long Mackinac Bridge for use in a fiber-optic broadband project called REACH-3MC.

The project is part of an effort to expand broadband access in Michigan. Snyder says it will help "serve job creators and the Upper Peninsula."

user: Patricia Drury / flickr

Gov. Rick Snyder presented a proposed consent agreement to City of Detroit officials. Snyder wants to use a consent agreement rather than appoint an emergency manager to fix Detroit’s finances.

Stephen Henderson is the Free Press’ editorial page editor and of “American Black Journal.” He spoke with Michigan Radio’s Jennifer White.

“The whole idea of the consent agreement is about control and power, and this agreement would ask the Mayor and City Council to give up a lot of that,” Henderson says.

Gov. Snyder and state treasurer Andy Dillon delivered their plan to Detroit city council this morning to turn around Detroit's finances.

The consent agreement calls for a financial advisory board with members appointed by the Governor, Mayor Bing, and city council to oversee decisions made by city leaders

The Detroit News reports that after negotiating with Gov. Snyder, Mayor Bing did not like the proposal, so Snyder decided to go straight to city council with the plan:

The governor and Bing neared a deal after a productive meeting Friday afternoon, and Snyder hoped an announcement could be made Monday morning, when the pair were scheduled to appear jointly at the Pancakes and Politics breakfast. But the mayor wobbled Sunday night, apparently concerned about giving away too much of his power, and Snyder decided to shoot the puck. He called Bing before the breakfast, told him he was taking the deal to council, and the mayor decided to skip the breakfast program.

Gov. Snyder said this morning that the city has until March 28 to decide on the consent agreement, after that, the Governor could decide to appoint an emergency manager to run things.

"We have offered every opportunity for the city to control its own fate," he said. "There's no point in this being adversarial. … But we don't have forever as an option."

So what do you think? You can read what others are saying about the consent agreement, or you can read a draft of the plan yourself and tell us what you think.

Should the city take this deal?

We’ve known for awhile that Detroit’s finances are reaching a crisis point. It’s believed the city could run out of money within the next few months. News broke yesterday evening that the Snyder Administration will try to remedy the situation. Governor Snyder will lay out details of a proposed consent agreement to members of the Detroit City Council today. A consent agreement would give the city’s elected officials broad powers… similar to those of an emergency manager.

steveburt1947 / Flickr

Governor Snyder will lay out details of a proposed consent agreement to members of the Detroit City Council on Tuesday.

Snyder and State Treasurer Andy Dillon, who leads the state review team looking at Detroit’s finances, have suggested a consent agreement for weeks.

That measure could give the city’s elected officials broad powers similar to those of an emergency manager.

The state team reviewing Detroit’s finances has avoided a scheduled court date—and possible contempt of court--by disbanding a controversial sub-committee.

An Ingham County Circuit Court Judge had ordered the team to appear in court Monday.

user steveburt1947 / Flickr

A state-appointed review team assessing the finances of Detroit met for the first time today. Most members of the panel say they are optimistic the city can avoid being taken over by an emergency manager.

Former Michigan Supreme Court Justice Conrad Mallet is on the panel. He is optimistic the city can turn its deficit around.

“We understand the concerns of the men and women who live inside the city of Detroit about what a survey like this actually entails and what it could mean,” said Mallet. “What it is going to mean is that we are going to get to the bottom of the course of difficulty.”

The review team has about a month and a half to send a report of the city’s finances and a recommendation to Governor Rick Snyder.

Ifmuth / Flickr

The Detroit City Council has scheduled a discussion of Mayor Dave Bing's budget reduction plan. It's set for Thursday afternoon.

A review team is looking into Detroit's finances - a step in a process that could lead to Michigan taking over the city's government. Its recommendations will be forwarded to Gov. Rick Snyder.

A preliminary review determined there was "probable financial stress" in city government and that Detroit faces a general fund deficit of about $200 million. Auditors say Detroit may run out of money as early as April.

Bing, the council and city labor union leaders have been collaborating to convince the state that an emergency manager is unneeded.

Bing has said he'll cut 1,000 jobs early this year to save about $14 million.

Bernt Rostad / flickr

Republicans in the state House said “no” today to Detroit lawmakers who tried to add $220 million for the city to a budget bill. Detroit officials say the money is owed the city from an earlier deal with the state.         

Detroit could run out of money to pay its bills by April. A state review team is examining the city’s finances in a process that could wind up with Governor Rick Snyder naming an emergency manager to run Detroit. But members of Detroit's legislative delegation say there are better options.

"It’s not a good investment in the state of Michigan to have your premier city go belly up and bankrupt, which will kill Standard & Poors’ rating of the state of Michigan as a state and all of the other cities and municipalities will go down the drain with them,” said State Rep. Fred Durhal (D-Detroit).

Durhal says he’s working on a plan to get a cash infusion to the city if it develops a state-approved proposal to manage its finances.

Native Detroiter Harry Morgan died yesterday. What makes me feel old is that while the rest of the world remembers him fondly for his role in MASH, I think of him as Officer Bill Gannon from Dragnet.

That was the show made famous by the iconic line “Just the facts, ma’am.‘ Which, by the way, nobody ever actually said on the show, any more than Humphrey Bogart said “Play it Again, Sam,” in Casablanca. Those are enduring cultural myths.

There’s another, more dangerous myth out there in Detroit today, a myth apparently shared by the mayor and city council.

Pages