Aside from right-to-work, perhaps the most heated debate in Michigan last year was over the controversial emergency manager legislation.
Essentially, as opponents of the legislation fervently argue, an emergency manager siphons power from locally elected leaders and an appointed one starts calling the shots on how and where money is spent (and not spent) within an affected city.
Detroit, despite threats, has been able to doge an the infamous EFM (so far anyway).
But in many ways the city has, by default, come under a different type of financial management.
The city, it its compromised financial state, has been increasingly reliant on outside donors, big-ticket foundation gifts, to help keep city projects afloat. It’s been a much less heated debate, but it still exists in the undercurrent of city politics and grassroots movements.
A prime example of this came to a head in 2011, when the Kresge Foundation cut funding to Detroit Works project after a disagreement with the Bing administration over the role of outside decision-makers planning the fate of the city.
As Rustwire.com pointed out at the time:
Investors like Rapson weren’t elected by the people of Detroit. He came to Detroit a few years ago from the McKinght Foundation in Minneapolis. He lives in some fancy suburb outside Troy. But as the Wall Street Journal points out, private individuals like Mr. Rapson are wielding a lot of power in Detroit. They are threatening to dictate the terms of a project that will nonetheless be funded 4-1 by public money.
Since 2011 Bing and Rapson have mended fances and are not on the the same page. News came yesterday taht Kresge plans to donate $150 million tot he Detroit Works projects, that is "every single dollar" that Kresge spends in Detroit over the next 5 years Rapson says.
Rapson is of the opinion that Detroit needs outside voices and ideas to get it on a new path. And he's partialy right, making the issue more complex than the stale outsider v. Detroit standoff.
Mr. Rapson counters that more outside voices are needed in Detroit to help local leaders who, he suggests, aren’t up to the challenge of remapping the city. “The idea that the folks who have been trained a certain way for the last 20 years and who have never had the opportunity to apply that training in another community could figure all that out de novo seems crazy,” he said in an interview.
But city leaders say mapping out the city’s future—including deciding which neighborhoods will survive Mr. Bing’s consolidation effort and which ones won’t—is a task for local leaders and voters. “People want to know that their interests are being represented,” says Marja Winters, the city’s deputy planning chief and co-leader of Detroit Works. “Someone who doesn’t live here can’t accurately represent their interests.”
So, in a way, the city is under a financial direction from people who have not been elected. But we have to ask ourselves: is that such a bad thing?
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.
“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?
Teach Me How To Duggan
But if Mike Duggan—or any other Detroit mayoral candidate— shares a genuine, hopeful and realistic vision to move Detroit forward through choppy economic seas, then more power to them.
It hasn’t been a week since Detroit Medical Center (DMC) head Mike Duggan threw his hat into the mayoral race and there have already been tough criticism of his status and work in Detroit.
Two-time mayoral candidate Tom Barrow charged Duggan with being an outsider and chided him for having to move into Detroit from Livonia in order to run for mayor. The Michigan Nurses Association accused him of being a “union buster” for ending an effort to unionize nurses at the DMC.
It would seem that in order to earn the title “union buster”, there have to be unions there in the first place to bust.
Duggan, like current mayor Dave Bing, is a businessman who lived outside of Detroit and moved into the city to make his mayoral run. Duggan, too, looks at running the city like running a business. He said his experience turning around the DMC when he came on board in 2003 would be similar to turning around Detroit.
As much as I don’t agree that cities should be run like businesses (a business’s bottom line is money, a city’s bottom line is people), I think Duggan deserves a fair shot.
The fact that Duggan would be the first white mayor since the 70’s should be considered a non-issue. It really doesn't matter if you’re black or white as long as you can do right by the city and do it well.
Duggan told the Detroit Free Press:
“What I’m focused on is we need to get the violence down, get the streetlights on, and get people moving into abandoned homes, not just knocking them down. That’s what I find everyone wants to talk about. And what I find is when you talk about those issues, issues like race melt away.”
While Duggan has shown successful leadership of the DMC, he still has a lot to prove. But let’s observe a bit before we start with sipping the Hater-aid.
Bing Put Horse Before Cart on Belle Isle Deal
Two weeks ago Governor Rick Snyder and Mayor Dave Bing made a big announcement: The two had come to an agreement on a plan to restore Belle Isle Park to its former beauty through a 30-year lease to the state.
The plan then went Detroit City Council members for a vote. But it didn’t take them long to realize that the lease was missing crucial documents: four legal exhibits that aimed to describe major aspects of the deal.
But it wasn’t just the council that got incomplete documents. Mayor Bing didn’t have them either. No one in the city had.
Deputy Mayor Kirk Lewis revealed at a City Council hearing on Tuesday that the administration had not received the complete lease from the State when Bing threw his full support behind the transfer of Belle Isle two weeks back.
“We received the documents the same time you did,” Lewis said when council members asked why it took nine days from the plan’s announcement to get a full copy of the lease.
Rodney Stokes, an urban advisor to Snyder, apologized to the Council for taking so long to get a complete lease document to the city. “I take full responsibly for that,” he said, adding that he was out of town.
“That just doesn’t work. That’s not how you do business,” said Council member Ken Cockrel, Jr.
Now that the council has the full lease, all nine members agreed that the document’s language is riddled with holes and vague ideas.
Acting as a unified team, the Council took turns pointing out flaws in the Belle Isle plan.
But they did not say they were against a lease to the state. The Council’s main complaint was that they wanted more specifics in the lease so they knew what to expect.
Council President Pro-Tem Gary Brown said any agreement with the state will have to take into consideration that Belle Isle can’t be operated like every other state park.
“I shudder to think what would happen if we bring park rangers to Belle Isle,” Brown told State and DNR officials at the hearing. “This would be the largest urban state park. You can’t treat it like the other 101 state parks.”
Public-Private Partnerships? There’s a Prop. For That
With all of the ballot proposals cluttering the 2012 ballot in Michigan this year—especially Detroit—we can pick just about any hot political topic and confidently say (much like iPhone applications), “there’s a proposal for that.”
One of the hot-button issues is the public-private partnership. These gray lines between private and public dollars and control have become more common in Detroit as the city struggles to fend off bankruptcy or State management amid a financial crisis.
So as the October 1 deadline to transfer Detroit’s Department of Health and Wellness Promotion to a private nonprofit approaches, let’s dig through the pile and see which proposals apply to these.
There is a couple. One of them is Proposal 2, an amendment to the state constitution that would engrave collective bargaining rights into state law. Those way, if a union-run city department gets transferred, guess who has the legal power to stop it?
The other is Proposal P, a Detroit measure that would amend the city charter to allow elected officials and employees to work for a private contractor with the city. In light of recent city hall scandals, the charter was revised to ban such movement, mandating a one-year interim period before a private company contracted by the City can hire for contract a former city employee.
Obviously, Proposal P has its issues. It blurs the line between public and private a little more than it’s already been blurred and without the proper controls could open the floodgates to more corruption, but as the city budget crunches and shifts services into private operations, it’s needed if city employee have any chance of keeping or finding a new job with the city.
Of course, this is creating kickback from unions, but it’s happening: public funds are drying up and services crumbling and private companies and organizations are there to catch them. In a lot of ways it makes sense.
Detroit is the only city in Michigan with health and wellness services on the payroll. Come October, that will change.
"The city has to increase its efficiencies in providing these services, and we've got to do a better job of making sure our citizens get the support services they need," Bing said in a statement.
As far as proposals go, Michigan's Proposal 2 would make such public-private transfers harder on a statewide level and Detroit’s Proposal P would make such city transfers a bit smoother, at least in terms of re-hiring those displaced by the public-private switch.
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.
“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.
The City of Detroit is operating like a rollercoaster. Every week is a new drama. Two weeks ago it was the state threateneing to withold revenue sharing funds if a lawsuit challenging the consent agreement wasn't dropped. Last week, a judge tossed the contoversial lawsuit and the city was able to move forward appointing the last memebers of the financial advisroy board put in place under the consent agreement. It seemed like the maybe the rollercoaster was slowing down a bit.
Then, last Friday, Bing stormed out of a meeting with city council and blasted them for holding back the city by not agreeming to remove the lawyer who brought the lawsut against the consent agreement. City Council President Charles Pugh blasted back saying the mayor needed to show better leadership. This week, Bing wants to hire is own lawyer and not use the city's top lawyer, Krystal Crittendon because of the negative effects the lawsuit she brought had on the city.
It seems that this week all niceties are out the window and now the familiar rift between the Detroit Mayor’s Office and the City Council is clearer than ever.
But was Detroit Mayor Dave Bing himself who said the city needed to move forward without distractions. So why is he causing more?
There seems to be reason beyond sinking bond ratings that Bing wants Crittendon out so bad. Is he afraid she will appeal the court’s decision to throw out her case that called the consent agreement void? Is the state privately threatening him with more cuts unless he removes the lawyer who could stand in the way? There has to be an better explaination for this one.
It doesn’t take a genius to figure that out: He’d already asked the Council remove Crittendon two week before when the state threatened to hold back $80 million in funding if she didn’t drop the lawsuit and they flatly refused. In addition, less than the 2/3-majority vote needed to remove Crittendon voted in support of the consent agreement in the first place.
This can be avoided. Crittendon hasn’t said she will appeal the decision to toss the lawsuit she brought, so, for now, this dramatic showdown should be over.
If the city of Detroit was a business, and Mayor Dave Bing was the President/CEO, and Corporation Council Krystal Crittendon was said businesses’ top lawyer, Crittendon would have been fired months ago.
But the city isn’t a business, and the mayor isn’t a President or CEO and able to call all the shots. There are many reasons one could argue that municipalities aren’t like a business, and alternately, many reasons why one could argue that they are.
Bing has said many times that the city aught to be run like a business. And in his letter to Crittendon yesterday, he cited how she had hurt her client, the City of Detroit, in her lawsuit challenging the consent agreement. As a direct result of her actions, bond ratings dropped, along with the already low public opinion of the city.
As much as Bing would like to run the city like a business, there are instances, like this one, where the two are distinguished. The city council has to vote on this one and six of them have to agree with Bing in order to remove Crittendon from her post as the city’s leading lawyer. And the council doesn't work for Bing.
It is unlikely that the City Council will vote out Crittendon for two reasons: First of all, there are not six city council members who agreed with allowing the consent agreement in the first place. That vote rattled through at 5-4. Secondly, Bing has already asked the city council members to remove Crittendon: just last week. They said “no” and no major external shifts have taken place since then, unless they are under some more, less public pressure from the state to get rid of her, the vote isn’t likely to change.
The question of weather a city should be run like business has intrigued me for some time.
But now is not the time for more philosophical debates and back and forth within city government. Could Crittendon’s removal turn into another city circus?
That’s what Bing is trying to avoid, and yet it almost seems inevitable.
One of the definitions the Merriam-Webster Dictionary gives for the word “business” is:
“Serious activity requiring time and effort and usually the avoidance of distractions "
Under that definition, Detroit is definitely a business and needs to avoid as many distractions as possible in order to stabilize not only the city’s reputation, but its finances.
Just when the legal showdown over the Detroit consent agreement was escalating to a special kind of crazy, the show is over: But not before Mayor Dave Bing hired a private lawyer to fight his own city's law department. Really, you can't make this stuff up.
Ingham County Circuit Judge William Collette ended what could have been a long and nasty battle between the city and, well, itself. On Wednesday afternoon Collette immediately tossed the lawsuit brought by Detroit’s top lawyer Krystal Crittendon without hesitation.
“This lawsuit will not go forward. I saw it from the very first moment."
Now the City Council can appoint the final members of the financial advisory board that will ultimately take over financial decisions for the city.
But will Krystal Crittendon and the protestors of the consent agreement fade off into the sunset? Not likely. If it wasn't such a serious issue that affected my city, I'd grab a bowl of popcorn and call it entertainment.
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