Detroit financial crisis

Politics
3:27 pm
Thu May 10, 2012

New CFO in Detroit leads to new emergency manager for Highland Park Schools

There's some job switching going on today in Michigan as Highland Park Schools emergency manager Jack Martin got the nod to become the new chief financial officer for the City of Detroit.

The CFO position was created as part of the city's consent agreement with the state. Jack Martin has been the EM at Highland Park Schools since last February.

Martin is a certified public accountant and was the CFO for the U.S. Department of Education from January 2002 through December 2005.

Martin's move to Detroit left the EM position at Highland Park Schools open which will now be filled by Joyce Parker. She's the current emergency manager for the city of Ecorse. She'll continue on in that role part-time, according to the Michigan Department of Treasury.

Read more
Politics
10:19 am
Mon May 7, 2012

In this morning's news...

Morning News Roundup, Wednesday, May 2nd
Brother O'Mara Flickr

State could be forced to pay new Detroit officials' salaries

Under the consent agreement with the state, the city of Detroit will have to appoint new officials to lead the city out of its financial crisis. Who will pay the salaries for these new officials is a new bone of contention according to Jonathan Oosting at MLive:

The [consent] agreement... requires the formation of a nine-member Financial Advisory Board to oversee city budgets and hiring of a Program Management Director to oversee implementation of key initiatives.

The deal calls for the city and state to split the salaries of advisory board members, who each will make $25,000 a year, while the city is required to cover the full salary of the PMD, expected to earn triple figures.

As MLive.com first reported this weekend, some city leaders believe the state may end up assuming full responsibility for those costs.

Some council members feel the Headlee Act prevents the state from mandating new services without compensating the city for those services.

Oosting reports Detroit City Council is expected to meet in a closed door session with the city's law department this afternoon.

U.S. Attorney General says violence in Detroit is "unacceptable"

U.S. Attorney General Eric Holder told thousands of people gathered at an NAACP fundraising dinner that violence in Detroit is "unacceptable."

He told the crowd last night in Detroit that his administration is directing "unprecedented" resources nationally in order to reduce young people's exposure to crime.

Holder said an average of two young black men get killed each week in Detroit. He called the statistic "shocking."

Higher train speeds between Detroit and Chicago

U.S. Transportation Secretary Ray LaHood says Michigan, Illinois and Indiana are each contributing $200,000 for a study looking into the creation of a high-speed rail corridor between Chicago and Detroit.

LaHood says the study will seek ways to cut Amtrak passenger train times between the cities and to more efficiently move goods.

The Department of Transportation says the study will build on the progress that Michigan has made in achieving 110 mile per hour service between Kalamazoo and Porter, Indiana.

Politics
12:26 pm
Wed May 2, 2012

Detroit unions weigh strike option as layoffs loom

wikimedia commons

DETROIT (AP) - Some Detroit municipal union leaders say striking is one of several options being discussed during ramped-up strategy sessions before new contract talks with the city begin.

American Federation of State, County & Municipal Employees Council 25 spokesman Ed McNeil says no strike vote has been taken "at this point."

McNeil said "people are looking at the system itself and are pretty disgusted with the city."

Union strategy sessions have become more agitated since Mayor Dave Bing and Gov. Rick Snyder approved a consent agreement that avoided appointment of an emergency manager in Detroit but now calls for steeper benefit cuts and more work rules concessions.

Detroit has an accumulated budget deficit of $265 million. Bing wants to cut more than 2,500 jobs and shave $250 million in annual expenses.

News Roundup
10:23 am
Mon April 30, 2012

In this morning's news...

Morning News Roundup, Thursday, April 26th, 2012
Brother O'Mara Flickr

Detroit Mayor Dave Bing returns to work today

Mr. Bing is expected back at city hall following his recovery from pulmonary embolisms in both lungs. Bing had an
operation in late March for a perforated colon, then returned to the hospital earlier this month after doctors discovered the blood clots in his lungs - a potentially life-threatening condition.

Bing, 68, was away for much of the drama surrounding the city's consent agreement vote with the state, but Deputy Mayor Kirk Lewis said Bing was continually informed and was providing his input into the process. From the Detroit News:

In a conference call with reporters 10 days ago, Bing said he was fully engaged in the process of hiring a chief financial officer as well as appointing members to the financial advisory board that will oversee the city's fiscal restructuring.

In that phone interview with reporters, Bing said he would start slowly and not work full days until his health is 100 percent.

Appointments to Detroit's financial oversight board continue

Five have been appointed to the nine-member financial advisory board - four more appointments are left.

The Detroit Free Press reports Detroit City Council will interview candidates today:

The council will interview candidates at 2:30 p.m. today and at 1 p.m. Tuesday at council chambers on the 13th floor of the Coleman A. Young Municipal Center.

"It will be a world-class board," council President Pro Tem Gary Brown, who is heading up the selection process for the council, said last week. "I've seen all the candidates, and people will be pleased with the level of competency on this board."

Council President Charles Pugh said the council could vote on its selections as early as Friday.

The financial advisory board will have oversight over the city's finances. Each member will be given $25,000 in annual compensation for their service on the board.

Number of low-birth weight babies increasing in Michigan

The Michigan League for Human Services’ Kids Count in Michigan report released today says the number of low-birth weight babies and babies born to unwed women is increasing, according to the Lansing State Journal.

The Journal reports that the authors of the report call for funding to implement changes from a state infant mortality summit.

The report says the 10 counties with the best health indicators for mothers and children are Houghton, Ottawa, Livingston, Leelanau, Midland, Grand Traverse, Oakland, Emmet, Clinton and Washtenaw.

The 10 worst are Berrien, Calhoun, Alcona, Genesee, Clare, Lake, Saginaw, Wayne, Crawford and Luce.

Politics
7:42 am
Wed April 25, 2012

The week in Michigan politics

This week we take a look at the politics behind Detroit's financial crisis
JS Fauxtaugraphy Flickr

Every Wednesday, we talk with Michigan Radio's Political Analyst Jack Lessenberry about the week in state politics. This morning we take a deeper look at the politics behind Detroit's financial crisis. Mayor Dave Bing's office presented the Detroit City Council with an austere budget this week that would cut some 2500 city jobs and slash $250 million from the city's budget. We ask: will such a drastic budget actually get passed by the July 1st deadline?

Politics
7:18 am
Tue April 24, 2012

Gov. Snyder set to hold online town hall tomorrow afternoon

Photo courtesy of the Snyder Administration

Governor Rick Snyder is scheduled to hold an online town hall meeting tomorrow afternoon at 12:15 p.m. The Associated Press reports:

The event will be streamed live at www.livestream.com/snyderlive . Questions can be submitted by calling 517-335-7858, posting a question at www.michigan.gov/townhall or sending a Twitter message to (at)onetoughnerd using the hashtag (hash)AskGovSnyder. Snyder spokeswoman Geralyn Lasher says the Republican governor will host the town hall meeting for about 45 minutes.

The Governor last held a town hall meeting in March to discuss Detroit's financial crisis. Meanwhile, in a speech to business leaders yesterday, the Governor said that he wants to see a stronger sense of urgency for action in Detroit. Rick Pluta reports:

Snyder’s vision includes Detroit being a manufacturing center that exports goods across the world; and a welcoming place for immigrants. He said the city also needs to reverse the trend of young families fleeing the city. Snyder said the two groups that left Detroit in the greatest numbers over the past decade were adults aged 25 to 29, and children between five and nine. The governor said progress is being made, but he wants to see a greater sense of urgency. The governor said municipal bankruptcy is still not out of the question for Detroit.

Politics
6:37 am
Mon April 23, 2012

Gov. Snyder set to talk about Detroit's economic future

Michigan Municipal League Flickr

Gov. Rick Snyder is coming to Detroit to discuss the economic future of Michigan's largest city. Snyder is participating in an event Monday sponsored by Crain's Detroit Business and being held at the Max Fisher music center, home of the Detroit Symphony Orchestra.

Snyder's office says the governor will participate in a "working group session," then deliver public remarks.

Snyder and Detroit officials recently reached a deal that created a joint oversight panel to monitor the city's efforts to close its budget deficit. The panel was a compromise that froze the state's move toward appointment of an emergency financial manager.

Detroit has lost most of its population and jobs over six decades, going from 1.8 million residents in the 1950 U.S. Census to 713,000 in 2010.

Politics
9:33 am
Fri April 20, 2012

Michigan's high court says "no" to review of Detroit consent deal

The Michigan Hall of Justice, home to Michigan's Supreme Court.
michiganradio.org

Earlier this month, some opposed to the state's efforts to enter into a consent agreement with Detroit tried to stop the process from going forward - arguing in front of an Ingham County judge that the state did not comply with Michigan's Open Meetings Act.

The judge agreed and ordered a halt to the process, but in an appeal by the state the Michigan Court of Appeals put a stay on the judge's decision.

Union activist and Highland Park school board member Robert Davis appealed all the way to the Michigan Supreme Court.

Today, the Michigan Supreme Court said it won't take up Davis' appeal.

The Associated Press reports "in an order dated Friday that it wasn't persuaded that the questions presented should be reviewed."

Robert Davis is the Highland Park school board member who is currently under a federal indictment for stealing funds from Highland Park schools. He says he will fight the charges.

Politics
1:46 pm
Thu April 19, 2012

First three appointments made to Detroit's "Financial Advisory Board"

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.”

Read more
Politics
2:41 pm
Thu April 12, 2012

Detroit faces big cuts in proposed budget from mayor's office

Bob Jagendorf Flickr

The Detroit Free Press reports police and firefighters face a 10 percent wage cut, and the Department of Transportation in Detroit could be cut by $10 million under a proposed $1.2 billion budget presented to City Council by Deputy Mayor Kirk Lewis today.

Read more
Politics
2:20 pm
Tue April 10, 2012

Detroit leaders vetting names for financial review board

Laughlin Elkind Flickr

The process leading to the selection of a nine-person financial review board to help Detroit monitor its finances and set budget revenue projections has started, even as some community leaders question whether the mayor and City Council too easily gave up control of the city to Gov. Rick Snyder.

Detroit NAACP President Wendell Anthony told Deputy Mayor Kirk Lewis during a forum Tuesday that city residents want to be a partner with the state, but "don't want to surrender who we are."

The agreement is aimed at turning around Detroit's finances while preventing the appointment of an emergency manager who would have had the authority to dismiss elected leaders. The deal includes forming a financial review board.

Lewis said names are currently being vetted for possible selection to the board.

News Roundup
8:16 am
Fri April 6, 2012

In this morning's Michigan news headlines...

user brother_O'Mara Flickr

"Opening Day" for Detroit

In a media roundtable in Detroit yesterday, State Treasurer Andy Dillon compared the day after Detroit City Council approved a consent agreement with the state with the home opener for the Detroit Tigers taking place nearby, "This is opening day in more ways than one for the city of Detroit," he said.

The next order of business for the city is to fill new positions called for the in the consent agreement. From the Detroit Free Press:

Mayor Dave Bing now has six days to create the positions of the city's chief financial officer and program management director and 30 days after that to hire the people for the positions... At the same time the state and city are compiling the list for the two top positions, they'll be developing a file of candidates to fill the nine-member financial advisory board, a team of people also with financial backgrounds, who will wield significant power as the city tries to right its finances.

Mayor Bing suffering from two "acute pulmonary embolisms"

Bing returned to the hospital on Wednesday. Yesterday afternoon his office released a statement saying the Mayor was diagnosed with acute pulmonary embolisms in both lungs. A condition that could be life threatening, but his doctor at Henry Ford Hospital said he's recuperating well. Deputy Mayor Kirk Lewis has been acting on the Mayor's behalf. Michigan Radio's Sarah Cwiek reported that Lewis said Mayor Bing "is alert and very involved in the ongoing process to implement the city’s new deal with the state."

“I’m just standing in his shoes right now, until he recovers. But Mayor Dave Bing is clearly the mayor and will be the mayor,” Lewis told reporters Thursday.

Highland Park School Board member calls charges against him "quite suspicious"

Highland Park School Board member and union activist Robert Davis was indicted yesterday on charges of theft by federal prosecutors. They've accused Davis of stealing more than $125,000 from the ailing school district.

Davis successfully won a court battle against the state's financial review teams for violating the Open Meetings Act. At a news conference held last night in his attorney's office, Davis called the timing of the indictment "quite suspicious."

More from the Detroit News:

"It's important for people to know that for the last two years I've been dealing with this particular issue as a result of my political enemies taking this false information to the FBI and to federal authorities," Davis said...

Politics
12:01 pm
Thu April 5, 2012

Read the Detroit consent agreement, Michigan Gov. Snyder to hold media roundtable

There's a lot to talk about now that the Detroit City Council narrowly approved a consent agreement with the state.

Gov. Snyder's office says the Governor, state Treasurer Andy Dillon, and Director of Urban Initiatives Harvey Hollins will hold a media roundtable this afternoon at 2 p.m. to discuss the agreement.

You can read the Detroit consent agreement here.

News Roundup
8:37 am
Thu April 5, 2012

In this morning's Michigan news headlines...

user brother_o'mara Flickr

Detroit approves consent agreement with the state

As Michigan Radio's Sarah Cwiek reported, the 5-4 vote in favor of a consent agreement with the state "came after an emotionally-charged debate that sometimes erupted into hostility."

The agreement, which the Governor is expected to sign sometime today, sets up a nine-member financial advisory board that would have oversight over the city's financial matters. It also establishes a chief financial officer position, and a program management position, both would report to the mayor.

Cwiek reports the city's restructuring "will be painful and sweeping" with some city departments disappearing, some services cut and others privatized. And the recently negotiated contracts with a coalition of city unions will be tossed aside. New contracts must be worked out.

To help the city avoid insolvency, the state of Michigan will complete a refinancing of some outstanding debt by selling bonds.

Michigan school unions file federal lawsuit against state

The state passed a law last year barring school districts from collecting union dues through payroll deduction.  Schools unions filed a lawsuit against that law in federal court yesterday.

Michigan Radio's Steve Carmody reported "the federal lawsuit alleges the law violates the 1st and 14th Amendments of the U.S. Constitution, by discriminating against school employees’s free speech rights and treating them differently than other public employees…who can still have their union dues deducted from their paycheck."

The governor’s office issued a statement backing the law, “We believe the bill does adhere to the constitution. ”

It's Opening Day for the Tigers!

The first Major League baseball game of the season took place last night in Miami, but for the rest of the League  - today is the day.

In Detroit, the Detroit Tigers will slug it out with the Boston Red Sox at 1:05 p.m. Fans and sportswriters have high expectations for the Tigers this year with many expecting the team to take the AL Central pennant.

In today's Detroit Free Press, Tiger's owner Mike Ilitch told Mitch Albom he spent big money to field a competitive team this year:

Wait 'til next year. It's the sports fan's mantra. But for Mike Ilitch, next years are precious. At 82, he admits he gave Prince Fielder the largest contract in Tigers history at least partly due to urgency in winning a World Series title. "Time is running out," he says. "No use kidding myself."

Breaking
7:39 pm
Wed April 4, 2012

Detroit City Council approves consent agreement with state

In a 5 to 4 vote Detroit City Council approved a consent agreement between the city and state that will allow the city to avoid an emergency manager and bankruptcy. Earlier today, a state financial review team approved the agreement.

The Detroit Free Press reports:

Under the consent agreement, a financial advisory board whose members would be appointed by Gov. Rick Snyder, Mayor Dave Bing and the City Council would advise and review all fiscal matters. The governor would appoint three members, the state treasurer would appoint one, the mayor would appoint two and the City Council would appoint two.

Michigan Governor Snyder released this statement after the vote:

“The council has acted responsibly to put Detroit on the path to financial stability. Approval of the consent agreement is a positive opportunity for the city and our entire state. It’s a clear message that we will move forward – and win – as one Michigan. We all want Detroit to succeed. This agreement paves the way for a good-faith partnership that will restore the fiscal integrity taxpayers expect and ensure the delivery of services that families deserve.

“While the council’s action is a positive step, there’s no doubt that much work remains. The magnitude of the city’s financial challenges means that many difficult decisions lie ahead. We must build on this spirit of cooperation and be willing to act in the city’s long-term interests.

“I appreciate the countless hours that Mayor Dave Bing and his staff, the City Council, the Financial Review Team, state Treasurer Andy Dillon and the rest of my team have devoted to achieving this agreement. Because of their tireless work, Detroit is poised to move toward being a great city again with improved services for its citizens and a foundation for future growth.”

And Detroit's Deputy Mayor Kirk Lewis released this statement after council approved the consent agreement:

The Detroit City Council’s vote tonight represents a pivotal moment in Detroit’s history. It is time now to begin the monumental task of stabilizing Detroit’s financial operations, which is and has always been the mission of Mayor Bing and his administration.

The Mayor and his administration worked with the City Council and the State to develop a consent agreement that we believe puts us on track to restructure our City financially and reestablish an infrastructure to make sure Detroit never faces these financial conditions again.

This agreement also ensures that the future of Detroit is determined by Detroiters and its elected officials.

Lewis has been acting on Mayor Bing's behalf while he works to recuperate from surgery after suffering from a perforated colon.

Politics
4:17 pm
Wed April 4, 2012

State financial review team approves Detroit consent agreement

The members of Dertoit's financial review team
Michigan Department of Treasury

A Michigan state financial review team met this afternoon and approved a proposed consent agreement with the city of Detroit.

Review team member Conrad Mallett Jr. said the proposed agreement "is the best we can do at the moment we are in," according to the Detroit Free Press.

The consent deal would keep Mayor Dave Bing and the City Council in office but impose substantial state oversight of the city’s finances. The major sticking point under a consent agreement is the reopening of union contracts.

Now its up to Detroit City Council to vote on the agreement. They are scheduled to meet today at 5 p.m. Deputy Mayor Kirk Lewis said today the thinks there are enough votes on council to pass the agreement.

Politics
3:36 pm
Wed April 4, 2012

Detroit Mayor Bing returns to hospital - Deputy Mayor says votes are there to pass agreement

Mayor Bing (center) meets with Deputy Mayor Kirk Lewis (rear) and Communications Director Robert Warfield (foreground).
City of Detroit

Update 3:36 p.m.

Mayor Bing's office released a statement saying he was re-admitted to Henry Ford Hospital this afternoon as a simple precaution. The statement says he was readmitted "after experiencing some discomfort."

3:21 p.m.

Detroit Mayor Bing's press secretary, Naomi Patton released photos of Bing and Deputy Mayor Kirk Lewis meeting today at the mayoral residence in Detroit.

Bing was released from Henry Ford Hospital this past Monday after going through surgery for a perforated colon.

Here's Lewis talking about his meeting with the Mayor and about Detroit City Council's impending decision about a financial stability agreement with the state.

Lewis told reporters he thinks there are enough votes on council to pass the agreement.

Politics
11:58 am
Wed April 4, 2012

Detroit draws closer to consent agreement, as Court of Appeals tosses restraining order

Laughlin Elkind Flickr

The Michigan Court of Appeals today lifted a temporary restraining order that prevented the state financial review team for Detroit  from meeting.

The court’s move has opened the door to a major step in fixing Detroit’s city finances.

The financial review team, appointed by the governor,  was supposed to meet Tuesday to vote on a “consent agreement” that would restructure the city of Detroit’s finances.

The agreement would help the city avoid the appointment of an emergency manager, but would require painful budget cuts.

Read more
News Roundup
8:29 am
Wed April 4, 2012

In this morning's Michigan news headlines...

user brother_o'mara Flickr

With EM decision fast approaching, Detroit City Council will meet again tonight

Instead of voting on a proposed financial stability agreement with the state, Detroit City Council members spent much of Tuesday discussing several court challenges that could derail any agreement. They eventually adjourned without a vote on the agreement despite warnings that tabling a vote could lead to an emergency manager appointment by Gov. Snyder. Snyder's deadline to decide on an EM appointment is tomorrow. Michigan Radio's Sarah Cwiek was at the meeting and reports council plans to meet again tonight.

Last night, Deputy Mayor Kirk Lewis, who has been filling in for Mayor Bing while out on medical leave, issued this statement regarding council's discussions:

We appreciate the seriousness with which the Detroit City Council is deliberating. This is one of the most critical decisions in this City’s history. However, Mayor Bing and the administration believe Gov. Snyder will act on Thursday, April 5, according to law, regardless of any related, current legal challenges to the process.

Auto sales on pace for a strong year

It's early yet, but auto sales figures in the U.S. show automakers are on pace to make 2012 the best sales year since 2007. More from the Detroit Free Press:

New-vehicle sales ran at a 14.4 million annual rate in March, down from a four-year-high of 15.1 million in February. Still, at the pace so far, Americans would buy 14.5 million vehicles this year, up from 12.8 million in 2011. The increase equals more than six assembly plants running two shifts each.

Chrysler led all automakers in sales gains for the month of March at 34.2 percent.

Michigan's unemployment rate drops across areas of state 

Michigan's unemployment rate dropped to 8.8% last month with a slight uptick in overall employment as well.

Michigan Radio's Steve Carmody reported new data shows the decline occurred throughout the state:

Fifteen of 17 regions of Michigan recorded declines in unemployment in February, with Detroit and Monroe reporting the largest rate decreases from January to February. Flint, Holland and Jackson recorded the largest declines during the past year.

News Roundup
8:34 am
Tue April 3, 2012

In this morning's Michigan news headlines...

user brother_o'mara Flickr

No clear path forward in Detroit

Detroit City Council met yesterday afternoon and did not vote on a proposed financial stability agreement with the state. Instead, as Michigan Radio's Sarah Cwiek reports, the meeting "started out with a contentious public hearing about union contracts, and ended in a confusing mess of court challenges—with no clear answer about how the whole process will go forward."

Council is expected to meet again today starting at 10 a.m.

Gov. Snyder has said his deadline for deciding whether or not to appoint an emergency manager is this Thursday (April 5).

And today at 2 p.m., according to the Detroit Free Press, a federal court will hear arguments about whether Gov. Snyder's "pressure on the city to scrap ratified [union] contracts violates federal due-process rights and contract clauses in the federal and state constitutions."

A separate court hearing on potential violations of the state's open meetings act is set to take place next week (April 11). As Sarah Cwiek reports:

Ingham County Circuit Court Judge Joyce Draganchuck has ordered the review team not to approve or even discuss a consent agreement before an April 11 hearing.

The court order was called “disturbing” by officials in Gov. Snyder's office. They say they will appeal.

Judge blocks legislative maneuvers by State House Republicans

Republicans in the State House have passed 500 bills with "immediate effect" provisions. With this provision, laws go into effect immediately after the Governor signs them, rather than waiting 90 days after the legislative session ends.

To pass an "immediate effect" bill, the legislative body needs a super-majority, which it does not have. 

Democrats in the State House sued, saying the Republican majority in the State House refuses to hold recorded votes on "immediate effect" bills.

As Michigan Radio's Steve Carmody reported, Ingham County Circuit Court Judge Clinton Canady granted a temporary injunction against the legislative maneuver. Her order blocks the implementation of three bills already signed into law.

An emergency manager for Muskegon Heights schools?

With a projected deficit of more than $9 million, a state financial review team is recommending that Gov. Snyder appoint an emergency manager for the school system.

Unlike Detroit, an EM appointment here is not likely to be controversial. The school board took the unusual step of asking for an emergency manager appointment last December.

Gov. Snyder has ten days to act on the review team's recommendation. If one is appointed, the Muskegon Heights schools emergency manager would be the seventh emergency manager operating in the state.

Pages