Detroit Financial Advisory Board

Consultants are working on all kinds of plans to re-shape Detroit city departments, and two such plans were previewed at a Detroit Financial Advisory Board meeting Monday.

One is to drastically downsize the Detroit City Council, and make its members part-time, with just one staff member each

Council member Saunteel Jenkins says that would completely change the Council’s role in city government.

Detroit can just barely avoid running out of cash this fiscal year--if it implements some key measures.

That’s what the city’s finance officials told its financial advisory board on Monday.

The premise to avoid insolvency involves some immediate cuts, some deferred payments—and a few big “ifs.”

Some of those measures are so-called “structural changes,” like mandatory furlough days, layoffs, and possible pension and health care changes. Others defer payments or take one-time opportunities to grab
cash.

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.

Detroit’s march toward a state-appointed emergency financial manager appeared to speed up Monday, as State Treasurer Andy Dillon announced his intention to start the review process that could end up there.

The city’s financial advisory board voted to support Dillon's move to start the process. It can last up to 30 days under Public Act 72.

Board members heard ever-more dire news about the city’s finances during the meeting

Detroit’s Financial Advisory Board is charged with ensuring the city’s financial viability--and has sweeping powers to do that under the city’s consent agreement with Lansing.

But at a board meeting Monday, some Detroit police officers pleaded with the board to consider the human cost of their actions.

Like most city employees, most police officers are about to get hit with a 10% pay cut.

They also face other cutbacks and major changes—including working twelve-hour shifts—as the department, and the city, try to re-align in the face of major budget cuts.

user cletch / flickr

Detroit mayor Dave Bing opened the first meeting of the city's newly formed financial advisory board by telling its members their task is to help return Detroit to greatness.

The problem is, the city has a massive budget deficit to wrestle with while it tries to keep the street lights on and the busses running.

Sheila Cockrel served on the city council for 16 years before retiring in 2009. She says there needs to be a major shift in the culture for the intervention to work.

"Them and us doesn't work," Cockrel said. "This is not someone taking something away. This has got to be everybody coming to the table for the common good and for the greater good. 'Cause what's good for Detroit is good for Michigan."

The nine-member board is mandated by the city's consent agreement with the state.

The Detroit City Council is moving ahead to implement the city’s consent agreement with the state.

The Council had delayed appointing its two members to a nine-member financial advisory board while the city’s corporation counsel challenged the consent deal in court.

A financial advisory board that will help guide Detroit’s budget process is expected to start meeting “soon”—but it will apparently be missing some of its members.

That Board is a key part of Detroit’s consent agreement with the state, and is supposed to have a prominent role in the city’s ongoing budget process.

Its nine members were to be appointed by state officials, Mayor Dave Bing—and the Detroit City Council.

The Detroit City Council is interviewing candidates for the city’s new financial advisory board this week.

The nine-member financial advisory board is a requirement outlined in Detroit’s consent agreement with the state.

The City Council gets to appoint two members, and approve the rest, who are appointed by the Governor, State Treasurer, and Mayor.

On Wednesday, the Council interviewed Mary Beth Kuderik, Chief Financial Officer for the UAW Retiree Benefits Trust.

Council members seemed keenly interested in Kuderik’s record managing health care costs—one of the city’s biggest long-term expenditures.

Kuderik says she thinks the city could save a lot of money in health care costs.

“My sense is that there would be opportunity for savings, even in terms of cash flow,” she said.”

Council President Pro-Tem Gary Brown cautioned it won’t be a part-time job to start.

“There is so much information that you have to be brought up to speed on, to understand how the city operates, that I really do see it being a full-time job for 30-45 days,” Brown said.

The Council has until May 10th to finalize the board.

So far, only one advisory board appointee lives in Detroit. That’s a concern to some Council members.

Several Council members have said qualified city residents they’ve approached have declined interviews, saying the issue is too contentious.

Laughlin Elkind / Flickr

The consent agreement the city of Detroit signed with the state earlier this month calls for the creation of a nine-member financial advisory board.

The board will have oversight over the city's finances.

Governor Snyder's office released the names of the three members appointed to the board today:

Former state Treasurer Robert Bowman, currently president and CEO of Major League Baseball Advanced Media LP, is the joint appointee of Snyder and Bing. Darrell Burks, currently a senior partner at PricewaterhouseCoopers, will be one of three individuals appointed by Gov. Snyder, and Ken Whipple, chairman of the board of Korn/Ferry International, is Treasurer Dillon’s appointee to the FAB.

Forbes has a profile of Robert Bowman.

Three are appointed - six more appointments are left.

Under the agreement, Gov. Snyder will select two more members of the board, Mayor Bing will select two, and Detroit City Council will select two.

Those serving on the board will receive compensation of $25,000 per year.

Detroit Deputy Mayor Kirk Lewis—who’s still serving in place of the ailing Mayor Bing—says the city is moving to comply with the consent agreement.

 “So we’re making progress," Lewis told reporters Thursday. "I’d expect over the next couple of weeks we’ll have that [advisory board] taken care of.”

Lewis says after that, city and state officials will move on to filling two more powerful positions outlined in the agreement: a Chief Financial Officer, and a Program Director.

He also says Bing is slated to return to work part-time in “a couple of weeks.”