Detroit financial crisis

Detroit
6:46 pm
Mon April 2, 2012

Detroit Consent Agreement process brought to a standstill

Spirit of Detroit
(photo by Steve Carmody/Michigan Radio)

 DETROIT (AP) — A judge has issued a temporary order to block a state-appointed team reviewing Detroit's finances from meeting Tuesday.   The panel was expected to vote on a proposed "consent agreement". 

The order was issued late Monday afternoon by Ingham County Judge Joyce Draganchuk. 

The order brings to a standstill the process that was expected to result in a "consent agreement" for the city of Detroit.

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Politics
11:06 am
Mon April 2, 2012

After offering concessions, Detroit unions won't get a vote

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Update 11:06 a.m.

In addition to threatening to strike, AFSCME officials say they will also file a federal lawsuit to try and compel Detroit City Council to take a vote on the tentative agreements the unions bargained for.

Unions are also in federal court seeking a restraining order. They're trying to prevent the Detroit City Council from signing off on a consent agreement.

10:49 a.m.

Time is running out for Detroit and state officials to reach an agreement to stave off an emergency manager.

This morning, Deputy Mayor Kirk Lewis confirmed he won’t ask the City Council to approve new labor contracts for city workers.

That infuriates union leaders, who gave up historic concessions in an effort to save money and avoid an emergency manager.

Al Garrett, President of the American Federation of State, County, and Municipal Employees in Detroit, said this is about breaking unions, not Detroit’s fiscal crisis.

"People don’t have to come to work if in fact their rights are being abridged," said Garrett. "It is not unusual for strikes in the city of Detroit, and I’m pretty sure that they may be met with some stiff opposition with regards to taking away rights that folks have had for years."

Gov. Snyder has said those concessions don’t go far enough. Under a proposed consent agreement, city officials would have broad powers to skip collective bargaining and impose union contracts.

Politics
11:10 am
Fri March 30, 2012

Top Snyder aide: More needed from Detroit unions

State and city leaders have been working to avoid an emergency manager appointment in Detroit, but so far, no deal has been reached.
user jodelli Flickr

EAST LANSING, Mich. (AP) - Gov. Rick Snyder's chief of staff says more concessions will be needed from Detroit unions before a financial oversight deal can be worked out with city leaders, but he adds "we're moving strongly forward" toward agreement.

Dennis Muchmore said during Friday's taping of public television's "Off the Record" program that he thinks five of nine city council members ultimately will approve a deal between the state and the city. At the moment only three have publicly expressed support.

If an agreement isn't reached by next Thursday, Snyder will have to decide whether to appoint an emergency manager with sweeping powers to run Detroit. Muchmore says an appeal period starts then, so the absolute deadline on a decision isn't until April 13.

Council members are expected to vote early next week.

Politics
3:38 pm
Thu March 29, 2012

With a financial crisis approaching, Detroit City Council debates new plan

Bob Jagendorf Flickr

Detroit City Council is expected to debate a draft financial stability agreement with the state today starting at 4 p.m.

Ahead of the debate, Detroit Mayor Bing released a statement saying "this draft landmark agreement...was jointly developed by the Mayor’s office, the City Council and the State of Michigan."

“Today’s special session of the Detroit City Council to consider a resolution to approve a financial stability agreement represents a significant milestone in addressing the City’s financial crisis, decades in the making,” said Mayor Dave Bing. “It won’t get fixed overnight, but our partnership with the State will drive us as we remedy our financial crisis.”

An earlier proposal by the state brought charges of an attempted "state takeover" of the city.

Council members rejected it, saying the plan stripped them of their power and was the equivalent of appointing an emergency manager to run things.

Bing said in his statement the new agreement "preserves Charter and Executive and Legislative powers, including allowing the Mayor to hire his own executive staff, and outlines specific support from the State."

The Detroit News reports it's obtained a copy of the new agreement:

[The agreement] calls for union contracts to be rewritten under new terms after they expire June 30. They would be built off a single template for all unions, including police and fire. The contracts would call for:

  • Creating a financial advisory board, advising the Mayor’s office and collaborating with the City to set yearly revenue targets; 
  • Requiring the City to adopt three-year budget; 
  • Creating a Project Implementation Office that reports to the Mayor and introduces a Project Manager to monitor and facilitate immediate project performance improvement; and
  • Providing a collaborative, performance-based process, ensuring the commitment of legislative support to improve City services such as the Public Lighting Department, the Department of Transportation and income tax collection.

The new agreement comes shortly after a coalition of about 30 city unions gave concessions in their contracts, including pay cuts, health care reorganization, and switching from traditional pensions to defined-contribution retirement plans.

Ed McNeil, with AFSCME, told the Detroit News this new draft agreement "is going to make all employees of the city of Detroit at-will. It would devastate the people in having representation. Basically what (Gov. Rick) Snyder is saying is, 'It's time to bust unions.'"

The News reports the Bing administration will push for a vote today from city council, but "council members, however, have said they expect a vote as early as tomorrow or Monday."

Politics
12:55 pm
Wed March 28, 2012

Michigan Governor Snyder holds Q & A session in Detroit; City Council set to consider deal Thursday

Michigan Governor Rick Snyder answering questions at a town hall meeting held at the Wayne County Community College in Detroit.
LiveStream

The Detroit City Council is expected to debate a "financial stability agreement" with the state on Thursday.

That news came just a few hours after  Gov. Rick Snyder took to a stage at Wayne County Community College to answer questions.

Snyder said the event was an effort to end the "miscommunication" about his plans for Detroit.

"I'm not here to run the city," Snyder said. "I'm here to be a supporting resource."

The questions were pointed, but the mood was calm, especially when compared to the wild public meeting held by the state's financial review team earlier this week in which one protester, Malik Shabazz,  threatened to burn the city down before allowing a "state takeover" (Charlie LeDuff of Fox News in Detroit later got Shabazz to take back that statement).

Gov. Snyder showed emotion during the town hall meeting as he tried to explain his reasons for wanting to enter into some kind of deal with city leaders rather than appointing an emergency manager.

He said the financial crisis the city is facing is casting a shadow over positive trends in Detroit, and if more citizens are thinking of leaving the city "we are in trouble!"

In one of his more animated moments, Snyder said when he talks to young people in Detroit he asks them, "do you want to be a yuppie living in Chicago, or come make a difference in Detroit?"

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Politics
11:00 am
Wed March 28, 2012

LIVESTREAM: Gov. Rick Snyder's Detroit town hall meeting

Gov. Snyder answering questions from the audience at a town hall meeting at Wayne County Community College in Detroit.
screenshot from LiveStream

Michigan Gov. Rick Snyder is holding a town hall meeting this morning on Detroit's financial crisis at 11 a.m.

You can watch a livestream of the event below: The Governor's Q and A session has ended.

Watch live streaming video from SnyderLive at livestream.com

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Politics
4:24 pm
Tue March 27, 2012

Snyder will talk about Detroit finances at a town hall Wednesday

Governor Snyder speaks to a gathering of city managers in Benton Harbor, shortly after he signed expanded powers for emergency managers. Benton Harbor residents protested his appearance outside the meeting.
Lindsey Smith Michigan Radio

Michigan Governor Rick Snyder will take part in a town hall meeting in Detroit Wednesday morning to discuss the city’s finances. Snyder says he’s trying to be transparent about the situation.

“A lot of it is getting out to talk to people and making sure that we all get the same facts, because Detroit’s in terrible financial distress in some ways. And there needs to be a long term solution because we all want Detroit to succeed,” Snyder said.

He’s expected to go over the facts at the town hall meeting. He’ll also field questions and probably some criticism from the audience.

The meeting comes as state and city leaders are trying to finalize a deal to resolve major cash flow problems. A state review team has determined Detroit is in “severe financial stress”. The city’s deficit is nearly $200 million.

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Politics
9:48 pm
Mon March 26, 2012

Detroit review team affirms financial emergency, but still no clear path forward

The state review team investigating Detroit’s finances met for what was supposed to be the last time Monday.

They reaffirmed that Detroit is in “severe financial stress” during a raucous meeting that veered into chaos at times.

Protesters, angry at what many call an unconstitutional hostile takeover of the city, mostly shouted over team members as they tried to deliberate.

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Politics
5:26 pm
Mon March 26, 2012

Crowd interrupts state financial review meeting in Detroit

JSFauxtaugraphy Flickr

Update 5:26 p.m.

The state review team looking into Detroit’s finances held what was supposed to be its last meeting today.

The meeting was chaotic.

State Treasurer Andy Dillon and other review team members were often drowned out by shouting and singing protesters in the audience.

In the end, the review reaffirmed that a "severe financial emergency" does exist in Detroit.

But there's no consent agreement between the state and city leaders yet.

Dillon said Governor Snyder is still talking with city leaders.

"If a consent agreement can be adopted, that's an alternative for the Governor, and that's what he prefers to see," said Dillon.

Dillon says if the two sides can't reach an agreement, the Governor can appoint an emergency manager for Detroit.

But by law, he'll need to act within the next ten days.

5:00 p.m.

The state financial review team meeting in Detroit today has adjourned. They did so without making recommendations to Gov. Snyder for how to resolve Detroit's financial crisis.

The meeting was open to the public and was interrupted by loud outbursts from the crowd. The Detroit Free Press estimated the crowd at around 100 people.

4:35 p.m.

A state-appointed financial review team met in Detroit today and was expected to deliver its recommendation to Gov. Snyder regarding the potential appointment of a emergency manager for the city.

Protesters attending the meeting interrupted State Treasurer Andy Dillon during his presentation shouting "No takeover." At one point, the crowd began to sing "We Shall Overcome."

More from the Detroit Free Press:

State treasurer Andy Dillon couldn’t finish his report about Detroit’s finances because the crowd was standing and shouting. Audience members were warned that they will be removed if they continue interrupting proceedings.

At one point Dillon called the audience rude, prompting more protest and causing security to move in on the meeting. The review board attempted to continue with its discussion. Police officers were present at the meeting.

Later, a skirmish between a security guard and a protester interrupted the meeting, but financial review team members tried to keep the meeting going.

Michigan Radio's Sarah Cwiek was at the meeting and will have more for us later.

Politics
3:30 pm
Mon March 26, 2012

Detroit and state officials close to a deal?

Update 3:30 p.m.

Governor Snyder says he’s still talking with Detroit officials about an agreement to keep the city financially afloat.

A state review team has already declared a “severe financial emergency” in Detroit. That means they’ll recommend some kind of state intervention to keep the city from going broke. 

The Governor says talks continue over what a “financial stability agreement” will look like.

But he says that agreement needs to contain language that could turn it into a consent agreement if the city fails to live up to its promises.

“So to take this financial stability agreement and enhance it, so that it could also qualify as a consent agreement. So it would meet the requirements for Public Act 4. But it would really be this financial stability agreement going forward about how we could work the city as partners.”

Public Act 4 is the state’s emergency manager law. Under a consent agreement, the mayor or other city officials could get broad powers similar to those of an emergency manager.

2:50 p.m.

Gov. Snyder spoke with members of the media today about a plan to avoid a financial crisis in Detroit.

Sndyer and other state officials are in Detroit today working toward a solution. Snyder said negotiations with city leaders are "fairly far along," and they are a "couple of paragraphs away" from an agreement.

Snyder and State Treasurer Andy Dillon are hoping city leaders will sign off on a consent agreement designed to avoid a looming financial crisis in Detroit.

City leaders rejected an initial proposal by the state and have been working on a plan of their own.

From the Detroit News:

Snyder told reporters Monday in Detroit that both sides are close to reaching a "financial stability agreement," which is what the deal will be called until it can be considered a consent agreement under the law. The governor reiterated he does not want to run Detroit.

City leaders argued that the initial consent agreement proposed by the Governor amounted to a state takeover. The Detroit Free Press reports the city's counterproposal retains powers for local elected leaders.

Officials have been mum on specifics of the counterproposal, but one draft -- not necessarily the final version -- showed the city asking the state to approve a $137-million financial package for immediate relief and change legislation so that the city can raise its income and corporate taxes.

The city's plan, called a financial stability agreement, also would return budget authority to the mayor and the council, and essentially leave a seven-member financial advisory board with the power to make only recommendations.

In about ten minutes, the state's financial review team is expected to make its recommendation to Gov. Snyder on whether or not a state-appointed emergency manager is needed for Detroit.

And as all this goes on, the Detroit News reports on a legal appeal to the State Supreme Court aimed at stopping the state's financial review team.

Andrew Patterson, lawyer for activist Robert Davis, said he expects to hear "shortly" from the court on whether the panel will consider the motion.

If the Supreme Court agrees, it will consider whether the state Court of Appeals acted appropriately Friday by lifting an Ingham County Circuit Court injunction. The injunction prohibited a consent agreement until Judge William Collette can hold a contempt hearing Thursday to determine if Treasurer Andy Dillon and other members of the review team violated the Open Meetings Act.

Politics
10:05 am
Mon March 26, 2012

Decision day looms for the city of Detroit

State and city leaders have been working to avoid an emergency manager appointment in Detroit, but so far, no deal has been reached.
user jodelli Flickr

Today is deadline day, according to Gov. Rick Snyder. He wants the state financial review team to tell him whether they recommend an emergency manager for the city of Detroit.

After the financial review team makes its recommendation, Snyder has ten days to make his decision on whether or not to appoint an emergency manager, something he's repeatedly said he does not want to do.

He'd rather reach a consent agreement with the city, but so far, city leaders and state officials have not reached a deal.

State Treasurer Andy Dillon and city leaders have been working over the weekend to come up with an agreement. They've been meeting despite Detroit Mayor Bing's hospitalization for a perforated intestine.

The Detroit Free Press reports Kirk Lewis, Bing's chief of staff, "has been made deputy mayor and will act as mayor until Bing is able to resume his normal activities."

The mayor is in regular contact with Lewis, who is talking with Dillon and his officials, so Bing's hospital stay is not expected to prohibit an agreement from being reached, she said.

The Free Press reports Gov. Snyder will be in Detroit today to meet with council members and other officials.

Snyder is expected to talk to the media at 1:30 p.m. today about Detroit's financial crisis. We'll have an update for you then.

Much has happened on this story in the last few weeks. For a look back, you can check out all the stories we've produced here. And you can check out a quick list of recent events published this morning by MLive's Jonathan Oosting.

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Politics
5:01 pm
Thu March 22, 2012

Appeal coming as Michigan governor's office pursues consent agreement for Detroit

Spirit of Detroit
(Michigan Radio)

Aides to Governor Rick Snyder say the state will ask the Michigan Court of Appeals to lift a judge’s order that prohibits a deal between Michigan and Detroit to resolve the city’s budget crisis.

An Ingham County judge says the state cannot make any deals with Detroit until he decides late next week whether a state team reviewing Detroit’s finances broke Michigan’s open meetings law.    Monday is the deadline for the review team to give Governor Snyder its recommendations.

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Politics
10:23 pm
Wed March 21, 2012

State review team talks options for Detroit

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

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Politics
12:01 pm
Wed March 21, 2012

What's in a consent agreement? Do you really want to know?

Are you confused about the proposed “consent agreement” the state is trying to work out with Detroit?

If so, count yourself one among many, including me, and I’ve been covering the story nearly every day for the past couple of weeks. In fact, I’m fairly sure that all the parties involved are confused.

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Politics
7:16 pm
Tue March 20, 2012

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

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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.

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Detroit
2:21 pm
Tue March 20, 2012

Judge halts Detroit consent agreement

user southerfried morguefile

DETROIT (AP) — A Michigan judge has temporarily put the brakes on a potential consent agreement between the state and the city of Detroit.

A ruling delivered Tuesday by Ingham County Circuit Court Judge William Collette in Mason says a state-appointed review team and Treasurer Andy Dillon shall not execute or sign a consent agreement or its equivalent with the Detroit until Collette makes further orders.

Collette set a new hearing date of March 29. A meeting was previously scheduled for Thursday.

The new hearing date is after the March 26 deadline that Gov. Rick Snyder set for the financial review team to report to him. The review team could reach a consent agreement with Detroit or recommend an emergency manager financially-battered city that faces a nearly $200 million deficit.

Politics
8:00 pm
Mon March 19, 2012

Detroit consent agreement: City officials try to get on the same page

Detroit Mayor Dave Bing has sent City Council members proposed language for a consent agreement, as time ticks down for them to counter a state proposal that would avoid an emergency manager.

Bing says his proposal gives Detroit “The appropriate tools to address the City’s financial crisis, and preserve the rights of Detroiters to be governed by the City’s elected officials.”

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Detroit
8:46 am
Tue March 13, 2012

What a consent agreement could mean for Detroit's financial crisis

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.

Politics
6:01 pm
Mon March 12, 2012

Governor Snyder to propose consent agreement for Detroit

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.

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Politics
12:05 am
Mon March 12, 2012

Detroit financial review team avoids court, pushes on toward deadline

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.

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