Tuesday, 27 November 2012 10:21
Think back to before Snyder, before Public Act 4 took effect. The city was broke then, too. Just as broke, in fact, as it is today. There was the threat of payless paydays, a recurring warning in the city these days. So what’s different now?
The state’s taking a firmer stance: Make big structural changes in Detroit government or no money from us, is the message coming from Lansing.
That’s why at a press conference last week, Mayor Dave Bing told reporters that, ultimately, he’s not the one calling the shots in these politically and financially stressful days. The State is. “I’m open minded but by the same token, the State is holding the cards at this point,” Bing said when asked whether he would reconsider terms of a contract that is necessary for acquiring state funds. Bing has brushed off City Council’s concerns of a conflict of interest with the controversial Miller Canfield contract.
If the state is holding the cards, a good poker face is in order.
Per the Snyder Administration’s deal with the Mayor’s Office, the City must hire and maintain private legal and turnaround firms, among other restructuring moves in order to get $30 million in bond sale funds. Now, heading into the New Year, the city is so broke it (apparently) can’t even pay attention to the simple legal requirements of holding a public meeting.
As Detroit faces a fiscal cliff of its own, the words “payless paydays” and “unpaid furloughs” have resurfaced as they have time and time before, especially over the past four years after former Mayor Kwame Kilpatrick left office and audits exposed the city’s financial nightmare. Essentially, the only difference between a payless payday and an unpaid furlough is notice not to come to work. And rhetoric. Either way, what usually would be a payday’s going to roll around and some unfortunate city workers are not getting paychecks. Either way, a check has to be missing a couple zeros or missing altogether.
We’ve heard it before, perhaps too many times: If the city doesn’t make drastic changes, it will crumble into the void. But by now Detroiters are a practically numb to the threat of running out of money. And that’s no good, especially if they city really is to run out of cash. But here’s the thing: it’s not.
The city won’t run out of cash any more than is has in the past. That’s not my opinion; it’s Detroit CFO Jack Martin’s. He spoke at a press conference last week declaring that a few unpaid furloughs will be enough to fill the cash gap. He and Bing last week promised “absolutely no payless paydays” and “no bankruptcy whatsoever.” But a slow trickle of furlough savings a $30 million lump sum is not.
But really, how do the two even compare? If a few unpaid furloughs for non-public safety or revenue generating workers is enough to stave off a financial crisis, was how critical was the crisis in the first place? It’s a question that perhaps touches on root of the issue between the legislative and executive branch of Detroit government.
Obviously, unpaid furloughs are being used as a threat to get council members to approve a controversial contract. But if it doesn’t work, then what? More lawsuits from unions? More back-and-forth?
As Bing and Martin have said, bankruptcy at this point is far from an option. The city is not close to being eligible ... yet.
Now that the State-City Milestone agreement benchmarks have not been approved by the City Council, and now that the state’s emergency manager leverage has been repealed, it’s back to the drawing board. Back to the unpaid furloughs hotly contested in 2010.
As far as bankruptcy goes, there’s a good reason we want to avoid it: “Bankruptcy costs a lot of money, ironically,” Said Eric Scorsone, extension specialist in State and Local Government at Michigan State University. He said the city of Vallejo, California spent over $10 million on bankruptcy lawsuits in 2008. “If you can get the same outcome at a cheaper price, you do that.”
Let’s do that.
Published in Minni Forman
Tuesday, 10 July 2012 07:53
Who needs a consent agreement? Detroit and the State of Michigan can sue the way to financial stability one lawsuit at a time. That's the level of ridiculousness we're headed towards, anyway.
Amid the confusion and controversy of legal tangles around the consent agreement, Detroit City Council President Pro Tem Gary Brown wants to add another ring to the legal dispute circus.
Brown says he’s going to urge the council to vote on a resolution to have the city charter reviewed by state Attorney General Bill Schuette.
The Detroit News reports:
“Brown wants Schuette to initiate a lawsuit asking a judge to clarify Crittendon's powers as the head of the city's law department while she continues her crusade against Detroit's consent agreement with the state.”
Is that’s what this city needs? Another lawsuit? The city just spent two years and thousands of dollars revising the city charter. The people who know the charter best are the ones who just re-wrote it, the former revision commission members.
But all that is beside the point. Why can’t we just let this lawsuit play out? Chances are, the Ingham County judge who dismissed Crittendon’s case with unwavering conviction the first time will not have had a change of heart. In the meantime, there is a lot work to be done.
Instead of fretting over a lawsuit that is supposedly “meritless” according to state officials, get to work on fixing the city’s finances, not pulverizing them further into oblivion.
Because, at the end of the day, financial stability is the goal, right? Is seems leadership at the city and state level has lost sight on the big picture and has been sucked into the whirlpool of drama that is city/ state politics.
Times like these call for collaboration and compromise. Like Mayor Dave Bing has said over and over: lawsuits are not going to fix the city’s financial crisis.
Published in Minni Forman
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