Less than a week after being ousted from her perch at the top of Detroit’s Law Department, former Corporation Counsel Krystal Crittendon has announced her intentions to explore a mayoral run.

Crittendon gained name recognition only this year after challenging the legality of the city’s consent agreement with the state this spring with a controversial lawsuit that pitted her against current Mayor Dave Bing as well as state officials.

At the time the Bing administration painted Crittendon as a rogue lawyer who acted out of line to dampen city progress. But Crittendon asserted that the lawsuit wasn’t about her, that it was about doing her job to make sure government was acting within the city charter.

Since then Bing has opted to hire his own lawyers from the private firm Miller Canfield a move that has cost the city more than $300,000, city bond ratings have slid further into the junk bin and Crittendon has been demoted.

But her hasty post-firing announcement of a possible run raises questions that one can’t help but ask: Was Crittendon planning a run all along? Did she make a big (and ultimately unsuccessful) show of an attempt to halt the consent agreement, (a controversial compromise tied directly to the unpopular emergency manager law) to gain name recognition and position herself for a plausible run?

It’s true, politicians have to stay continually ahead of the game, in months, sometimes years of strategically planning. A telltale sign is that Crtittendon says she already has eight people in place to run her exploratory committee with less than a week of job displacement behind her. She told The Detroit News she heard about her ouster over the news media “like everybody else”.

If that was the case, it seems like she had been planning a run for some time regardless of whether she would be fired.

In a radio interview with Mildred Gaddis on Inside Detroit WCHB-AM: News Talk 1200 Monday morning, Crittendon had all of her talking points ready, and still insisted that it wasn’t about her but about the law and the voice of the people.

It almost seems as if her rise to fame or in some cases infamy was a calculated power play. Which as far as poltics goes, would be brillaint. Or maybe the events of the past year steamed her up for a run.

“The papers have portrayed me as a polarizing figure,” she told Gaddis Monday morning. “This is not true. I can work with both branches of government, as well as residents and the business and corporate community. This is not about me.”

She said her legal actions to block the consent agreement gave people hope, that the legal fight got people “believing we can reclaim this city”.

Crittendon said she has seen an outpour of support, residents approaching her asking how they can help in her mayoral bid. She also struck on a cord that resonates with many Detroiters who are worried a state receivership would mean a loss of voice for residents by declaring that the city can manage its own financial crisis.

What would be Mayor Crittendon’s first action? A thorough audit, and a beefed up collections taskforce to get back money owed to the city, she said.

Although she obviously is against recievership, she said kowtowing to State pressure in order to stave off the dangling threat of an emergency manager is not her course of action. She said the state will likely appoint an EM anyway, so fear is not the answer.

“The City Council should not be afraid to take a bold stand and listen to the people, not be afraid,” she said adding that even if an EM is appointed prior to the election, “he will not be here forever”. It seems likely that after establishing herself as a fighter for the people, she has positioned herself in the spotlight as a sort of martyr, perhaps gaining a soft spot in voter’s hearts.

The second question is, will it work?

Pitted against the likes of former DMS frontman  Mike Duggan and Wayne county sherrif Benny Napoleon, Crittendon has some big fundraising to do. And fast.

It remains to be seen: What side of history will the woman who tried to stop Detroit’s state-mandated restructuring process fall on?

For years Detroit has been on the brink of one financial crisis after another. While the threat of running out of cash is an ever-looming one, this time the State is not buckling under Detroit’s reluctance to change the status quo (or at least the division in leadership over how to change it).

Ultimately, the buzz about the escrowed state funds is a tiny spec on the surface of an enormous financial monster. Let’s be real: Detroit is in way deeper -*-  than a $30 million bond sale installment and a few unpaid furloughs can remedy. The city council could approve Miller Canfield contracts all day long and the city would still be down the well so to speak.

At this point big chunks of city operations need to be dissovled or merged. This is serious restructuring that city leaders have been able to pull off over the past decades of post industrial depression.

The consent agreement with the State put in place last spring in lieu of an EFM just isn’t cutting it. As Detroit City Councilman Andre Spivey said on Tuesday:

“…The truth of the matter is we are 8 months away from when the consent agreement [was implemented]. We could have had a baby in this time. But nothing has been done.”

That’s why an Emergency Financial Manager (EFM) now seems inevitable. Since Public Act 4 was suspended in November, the State must revert to the old emergency manager law, Public Act 72, which limits the powers of a state-appointed appointed money czar. By now it’s not a question of “if” anymore, rather “when” and “who”.

While an emergency financial manager would not have the sweeping powers that an emergency manager would have had under PA4, he or she could still take control of financial matters [hopefully] without getting too tangled in politics.

That said, perhaps the most important question for Gov. Risk Snyder when is comes to appointing an EFM to Detroit is the “who.”

It will take an individual of tremendous resolve, intelligence, and overall chutzpah to turn around the roaring southbound train that is Detroit’s finances.

The person who is appointed to head Detroit’s money matters will have to have the resolve of a Hillary Clinton and the optimistic, fiscally conservative outlook of a Rick Snyder.

If it is as Mayor Dave Bing said last week and leading Detroit is the second hardest job in the country, the EFM position could easily line up as the third most challenging.

Aside from negotiating a cease-fire in the Middle East, perhaps negotiating with city unions for hefty pay cuts and layoffs are the most difficult negotiations to make in the nation.

Snyder should appoint as Detroit’s EFM a woman with the character and intelligence of Hillary Clinton.

Conservative Stephen Hadley, former national security adviser to President George W. Bush said recently of Clinton:

“Secretary Clinton in particular stepped forward and exerted some leadership. That's very good news, because what the Middle East has been crying for is greater U.S. leadership."

Well, what Detroit has been crying for is greater leadership, too. So if an emergency financial manager is the only way out, lets make sure that manager is thoroughly vetted and can to the dang thing. 

Proposal 1 may have been smashed but in Detroit, financial reforms sparked by the emergency manager legislation will be carried out as planned.

Just because voters struck down Proposal 1 doesn’t mean Detroit’s financial crisis was wiped out along with it. In fact, some argue that it’s quite the opposite; that without the State’s legislation to mandate emergency managers in cash-poor cities, these cities have no choice but to apply for bankruptcy, thus obliterating bond ratings and shaking the statewide economy.

With the defeat of Proposal 1 comes a new shower of questions.

Will state legislature draft up a new, similar, emergency manager law? Will any cities that already have emergency managers or advisory boards fight to keep them in place? Will elected officials, in order to avoid further financial chaos, carry on the work and advice that these state-appointed officials have given so far?

In Detroit, Mayor Dave Bing said he plans to carry out the suggested reforms that State and city appointed financial advisors laid out during the brief tenure of PA4. Bing wrote in a statement on Wednesday that the City's Consent Agreement with the State is still in place.

Bing wrote:

“I am determined to continue with vital reforms now underway in the City of Detroit, despite the defeat of Proposal 1 by Michigan voters in Tuesday’s election ... In the face of the City’s enormous fiscal deficit, I chose to negotiate a Financial Stability Agreement with the State of Michigan, rather than entertain the appointment of an Emergency Manager.  The Financial Stability Agreement, approved by Detroit City Council last April, is still in place.”

That answers a couple of the immediate questions. Detroit is one of the municipalities whose leaders are electing to keep the financial advisors appointed through Public Act 4 and the reforms they have suggested.  

There are 25 major reforms on the table as part of the consent agreement that Bing met with City Council to discuss last month. At the meeting, Bing got a positive response from the council.

“We are willing participants in the reforms," City Council President Charles Pugh said at the Oct. 22 meeting.

"You have our support," Councilman Andre Spivey told Bing regarding the reforms. "I don't see the Council being an impediment."

At the time, Councilwoman Saunteel Jenkins wanted to know if these reforms could be made Prop. 1 fell through on Nov. 6.

Bing said it didn't.

The Mayor has said that the reforms in question, which involve some compensation shifts for city employees, some reshaping of city departments and the creation of a lighting authority, are necessary for the City to be eligible for up to $80 million in bond sales from the State. Bing said Detroit could receive $10 million by Nov. 15, and another $20 million by Dec. 14 with more installments made as the City meets the reform requirements to boost bond ratings and sales.

Money is the motive for these 25 suggested reforms. Without strengthening bonding capacity Bing has warned over and over that the city will not be able to pay its employees at all, a much more grim outlook than pay cuts or a switch from salary to contract work.

Even opponents of the emergency manager law have to concede: Detroit is in dire financial straights. Just because the State can’t mandate new financial leadership is no excuse for elected officials to sit in denial while the city spins further into financial insolvency. Let’s hope our city leaders do the right thing and make the tough decisions needed.

Is it safe to assume that if we have the right leadership, we won't need Emergency Manager legislation like Public Act 4?

What’s the big deal? If judges are going to dismiss legal challenges to the consent agreement so easily, why all the fuss?

Krystal Crittendon tried it. Then she tried it again—that is, filing a lawsuit deeming Detroit’s Financial Stability Agreement void according to her interpretation of the city charter due to some disputed revenue sharing dollars and unpaid bills.

Both times, an Ingham County judge tossed Crtittendon’s lawsuit without a blink.

But it was too late: at that point city’s top attorney’s legal argument had raised such a ruckus from the state and supporters of the agreement, that city bond ratings dipped along with other financial speculations, driving the city further into a financial hurricane.

With all that mess, it seemed like the Corporation Counsel’s lawsuit actually carried some water. Or, at very least, enough for a judge to consider it and not toss it out with the same knee-jerk revulsion reserved for rotten tomatoes.

Then three local AFSCME union leaders tried it. Detroiters Rose Roots, Yolanda King and Yvonne Ross filed a lawsuit making the same argument as Crittendon: the consent agreement is void per the City Charter due to debts the state owes the City.

Wayne County Circuit Judge Amy Hathaway swiftly ruled that the City had no proof that the State owed it any money, and that revenue sharing dollars that are not shared do not count as debts.

The Detroit Free Press Reports: 

"'The revenue-sharing money ... is not a debt, and we all know it's not a debt because corporation counsel issued an opinion to that effect back in 2006,' Hathaway said, referring to an opinion by a former top city attorney in the administration of former Mayor Kwame Kilpatrick."

While the city charter has been revised since the Kilpatrick days, this ruling puts forth a solid reason not to appeal, or makes the chance of any appeal unlikely to succeed.

Crittendon still has time to appeal as well as the three AFSCME musketeers. But it would be silly to let these lawsuits send the city and it’s fragile finances into another tailspin. To supporters of the consent agreement: Don’t buy the hype and everything will be fine.

Consent or Bankruptcy? No Easy Way Out

Last week, when the city council voted on the controversial, proposed union wage and benefit cuts under the consent agreement, Council Member Kwame Kenyatta suggested the city would be better off filing for bankruptcy.

That got people talking: What are the real consequences of municipal bankruptcy?

One Detroit News columnist, Daniel Howes, speculated on what could happen if the city went under the mercy of a federal bankruptcy judge versus the financial board that's now in place under the consent agreement.

 Howes writes:

“When a judge orders Belle Isle sold to repay creditors or demands the Detroit Institute of Art liquidate a portion of its holdings or abrogates collective bargaining agreements with the city or approves massive legal fees for legions of lawyers or renders judgment on a parade of horribles — that would be preferable?”

After reading that I wanted to find out exactly what the powers of a bankruptcy judge are and whether Howes was right: Could we potentially be forced to sell Belle Isle?

I decided to ask an expert on municipal bankruptcy. Eric Scorsone, specialist in State and Local Government at Michigan State University, says, "no":

“A bankruptcy judge cannot force the City of Detroit to sell Belle Isle or any city-owned property. That’s just not accurate,” he said.

 Scorsone distinguished a key difference between a bankruptcy judge and a financial manager or board:

“A bankruptcy judge is really almost more of an arbitrator or an administrator than anything else. An EM is kind of in the driver’s seat.”

Since a bankruptcy judge tends to be more hands off, that’s part of the problem. If the city went bankrupt a judge wouldn’t have the power to change any policies or government structures that landed the city in this financial stew in the first place:

 A bankruptcy judge is not gong to fix try to the city’s economy,” Scorsone told me.

 But even if we weather bankruptcy, an EM, or Consent Agreement board, it looks like there’s just not easy way out of this, Detroit.

The deed is done. The consent agreement has come alive and now it’s up to the financial board and the program management director William Andrews to wield their power over the Detroit City Council, which voted Tuesday to reject their plan to slash union income and benefits for city employees.

But under the consent agreement, it really doesn’t matter how the Council votes. This is why the consent agreement was created in the first place, no? To get rid of all the red tape and elected officials who clearly don’t know what’s good for the city?

The Detroit Free Press reports: 

“[The consent agreement] gives the city's program management director -- a position created by the consent agreement and appointed by the mayor from candidates agreed to by the mayor and governor -- the ability to ignore Tuesday's vote and impose the proposed cuts, thus controlling union members' salaries, benefits and work rules. The fiscal stability agreement, or consent agreement, thus makes the council's vote on union conditions largely symbolic.”

Hey, council members could see it as a good thing: they’ve got nine financial board appointees  people to do their job. Vacation time, anyone?

Detroit City Council Member James Tate had a question yesterday for the Financial Advisory Board's Chief Jack Martin. The Board met with the Council yesterday to discuss their proposed cuts to city labor contracts.

 "PA4 we know is up in the air right now. Potentially it will be voted down if placed on the ballot. What is your contingency plan?" He asked Martin, who is in place under PA4 (the state's emergency manager law) to manage the city's finances in crisis.

Martin's Response: 

"I can’t say specifically what we may do. But no matter what happens with PA4, we’re still running out of cash.  We need the hard dollar savings to get through this year. There’s a million-dollar difference in expenses and revenue between 2012 and 2013.  My standpoint is we stay on the current path no matter what happens to PA4."

At yesterday's meeting the City Council did not approve the Financial Advisory Board's proposed cuts to city worker's wages and healthcare benefits. But Mayor Dave Bing and the Financial Advisory Board urged the council to act and not stall the labor cuts as the city can no longer operate in the status quo. Under PA4, the Financial Advisory board does not need the council's approval to make these cuts. 

Martin added: 

"We can talk about this for the next six months, but the bottom line is we’re running out of cash. If we don’t do it in an organized fashion there is going to be chaos and we’ll end up like some of these jurisdictions that filed bankruptcy."

Get to work. That’s what supporters of the consent agreement have been hoping the nine-member Financial Advisory Board (FAB) would do after the legal storm brought by Detroit's Corporation Council Krystal Crittendon cleared.

Well, it has. The FAB 9 have, in fact, been at work for some time, it seems. One of the products of their labor is a 62-page blanket contract for city unions called City Employment Terms, or CET.

The conditions of the CET have been called “union busting” by union representatives. But union busting or not, the city simply can’t afford to maintain old union agreements while facing financial straights.

Union contracts for most of the city’s unions expired June 30 and the city is set to implement new contracts today, leaving the door open to the FAB (that was appointed under the PA4 consent agreement) to make sweeping changes to unions across the city.

The CET is slated to become the one contract that governs nearly all 40 city unions that previously, each had individual contracts with the city.

And under the CET, no strikes are allowed.

The VoiceofDetroit.net reports:

“The CET bars strikes although at the same time the consent agreement says city workers will no longer be covered under the Public Employee Relations Act, which while providing some protections for workers, has been the chief mechanism to bar strikes.”

That’s a double whammy on strikes, just in case workers get mad and want to, er..., strike.

 The CET also proposes that all city workers will be subject to a 10 percent pay cut, no more furlough days or annual longevity payments or merit and step increases in pay.

Sound familiar? Well, these cuts mimic the ones Mayor Dave Bing was trying to impalement three years ago but couldn’t get unions to budge on. Apparently unions wanted to go the hard way. Since the mayor couldn't do it, the state will. The CET cuts are deeper than what Bing was proposing in 2009.

The CET also says workers will still contribute five percent of their annual pay to a retirement plan, but the workers’ contributions will be considered the city’s contributions, eliminating the city’s obligation to pay separately into the fund, according to VoiceofDetroit.net.

Under the CET there is no guaranteed lunch hour, just two 15-minute breaks.

That’s not all, folks.

The Detroit News reports:

“In addition to the pay cut, the new contract calls for about $52 million in savings by changing the city's health care plan. The plan will eliminate dental and vision coverage for retirees, and increases co-pays on insurance. The contribution from employees on prescription drugs also increases.”

 

How will union workers react? They can’t strike, but there is bound to be some sort of outrage. The City Council will be meeting at 1:30pm today to discuss the CET. Stay tuned as the coverage around this unfolds.

Just when there was some hope that the legal drama over the consent agreement was over, a new round of lawsuits stirred up the political pot late last week.

Crittendon is at it again, asking the Ingham County Circuit Court Judge William Collette, who dismissed her challenge to the consent agreement, to reconsider his decision. It’s unlikely that the case will go far with the same judge who was very clear that he did not believe Crittendon had a legitimate case last time.

Meanwhile, the state also filed a lawsuit in Wayne County last week to stop a city hearing over water bills the state allegedly owes the city. The threats to withhold millions in revenue sharing are back on the table, just like they were last month.

When will leaders be able to compromise? Leadership in Detroit definitely leaves something to be desired, but state officials are not exactly the best diplomats, either. All of the “danger” Bing warns that the city is in stems from threats from the state’s threat to withhold finances due to Crittendon’s the lawsuit, not the lawsuit itself.

City Council member Kenneth Cockrel Jr. has the right idea. He told The Detroit News:

"I do think continued legal filings not only on her part but on the part of the state — they are now suing us — are ultimately destructive to the process," Cockrel said. "They are certainly not in the city's short term or long term interests, for that matter."

 

Yeah, what he said.

 If anyone should be concerned about the consent agreement between the City of Detroit and the State of Michigan, it’s AFSCME local workers. The agreement that is geared to restore financial stability to the floundering Motor City, has cleared a path to bust unions in the name of cutting corners.

After a lawsuit filed by the city’s Corporation Counsel aiming to halt the consent agreement was tossed by a judge last month, a new, similar, lawsuit has emerged.

This time, it’s not coming from Krystal Crittendon or any city official. It’s coming from three AFSCME local union leaders who have been working and living in the city for decades.

The three plaintiffs, Rose Roots, Yolanda King and Yvonne Ross, are all representatives of AFSCME local divisions. Although they say their decision to sue the Mayor and City Council for violating the city charter has not been influenced by anything but the community need to oppose the agreement.

The Detroit Free Press Reports:

"Ross, 60, is a legal secretary for the city of Detroit and is president of Local 2799. Yolanda King, 52, is president of Local 2394 and is a civilian employee with the Detroit Police Department. Roots, who is in her 70s, is president of Chapter 98, which represents city of Detroit Retirees."

 This can’t be a coincidence. Outside of union affiliates and a few heated activists, the general population of Detroiters seem apathetic to the consent agreement: A few sparsely attended protests do not a revolution make. 

But on a state level this may not be the case. Two weeks ago another group of residents sued the state to challenge the legality of the Emergency Manager Law, or PA4.

“We could have had a thousand plaintiffs, or we could have had more than tens of thousands,” John Philo, legal director of the Maurice & Jane Sugar Law Center for Economic and Social Justice (which will provide legal representation in the lawsuit) told Democracy Now last month.

“There’s a tremendous amount of concern throughout every community in this state,” he said, adding:

“The concern is not localized to just the communities that have an emergency manager now, and it’s not just urban areas. We’re getting support from the UP and from the northern Michigan, which isn’t known for progressive politics.” 

The lawsuit King, Ross and Roots filed this week will be heard on July 13 by Wayne County Circuit Court Judge Amy Hathaway.