Today’s the day. Today, Michigan Governor Rick Snyder is expected to receive a comprehensive report on Detroit’s finances to determine whether he should appoint an emergency manager to take over the city’s finances or not.

Snyder has said it won’t take him long after reviewing the report to make a decision about Detroit’s future. Earlier this month Snyder told reporters he wasn’t indecisive:

“It will probably take a week or two for me to make a full analysis of the report, and then decisions will be made. My reputation is not one to be sitting on things rather than making decisions.” 

But the hard part may be finding someone willing to take on the tall order of reigning in Detroit’s finances—a $300 million-plus short-term deficit and a long terms debt of more than $12 Billion. On top of everything, this is a city that takes great issue with state-based initiatives in city government.

If Detroit Mayor Dave Bing is right about having the second hardest job in that nation, then one can only imagine the post of Detroit’s emergency manager is right up there with the hardest of them. Talk about being hated.

Many people rumored to be on Rick Snyder’s short list have declined any interest in the post.

But one of those rumored EM possibilities is George Jackson, head of the Detroit Economic Growth Corporation. According to The Detroit News: "Jackson is the only named person who hasn't denied he is in consideration. A spokesman for Jackson declined to comment and referred the issue to Snyder's office". 

 A state-appointed review team has been combing through Detroit’s snarled finances since December. While Detroit, as the state’s largest city, would be the biggest municipality to fall under state receivership, it would not be the first.

The cities of Pontiac, Highland Park, Benton Harbor and Flint have all undergone the controversial state measure of involving locally elected officials being stripped of many or their powers so a state-selected leader can take over.

The issue has been so controversial that it has inspired Flint playwrights to create an entire production on the topic.

State of Emergency, a play opening this Friday in Flint, uses verbatim theatre, that is a technique that uses real quotes from interviews and found materials, to make up a theatrical production outlining what life under state management is like for cities like Flint.

The play could also soon apply to Detroit.  One of the play’s creators, Andrew Morton of Shop Floor Theatre Company, says the struggle for power between local officials and state appointed receivers is one that makes for a great drama.

Morton told Mlive-Flint:  

"A very specific example is the announcement of (the emergency manager) on the night of the election of 2011. To me, that's a dramatic event," Morton said. Shakespearean plots, it's all about who's in power, or power shifting from one group to another, or one groups trying to wrangle power back."

For Detroiters who don’t want to drive all the way to Flint will be able to watch it online streaming live  HERE on Saturday, Feb. 23 at 7 pm.

Local political annalists have agreed in their predictions that Detroit will go the way of Flint, Pontiac, and other cash strapped Michigan cities.

In his fourth (and possibly last) State of the City Address, Detroit mayor Dave Bing avoided the fact that the city is likely about to fall under state receivership.

His only acknowledgement of the issue  came when he boasted that his administration has had “no emergency manager to date.”

Local political pundits took to the social media website Twitter to point out the Mayor’s game of dodge ball on the topic.

Detroit Free Press columnist Stephen Henderson tweeted:

“Bing should also take credit: No swarms of locusts since he has been mayor. To date, that is. #BingSOTC2013”

Detroit News columnist Nolan Finley also took a crack at the mayor via Twitter:

“Elephant? What elephant? Bing barely mentions consent agreement and says nothing of pending financial manager. Reality avoidance.”

Free Press Columnist Rochelle Riley tweeted her two-cents as well:

“Bing speech sounds like its being delivered by a guy who knows it soon won't matter.”

The tweeting pundits noted that much of the Mayor’s claimed progress in the city has come from handouts rather than internal changes.

City Council President Pro-Tem Gary Brown posted:

“As Mayor points out, the business & philanthropic community are moving forward. It's city government that is failing. #Detroit #SOTC”

Riley agreed:

“Mayor Bing lists accomplishments; he can be proud. But most came by way of federal funds. He better hope that keeps coming. #BingSOTC2013.”

Riley took the chance to note something else: Recently Bing closed 50 city parks due to a $6 million budget shortfall but…

“Mayor Bing announces plan to raise $60 million to keep 17 rec. centers open a week after he announced plans to close 51 parks. #BingSOTC2013”

Interestingly, Wayne County Sheriff Benny Napoleon, who is planning a run for mayor in 2013, tweeted his agreement with the Bing more than once during the speech, avoiding criticism of his possible opponent in the race.

“Again I agree, public safety must be the top priority of any administration. #Detroit #BN4theD #SOTC.”

After Bing refused an interview to prominenet (and often abrasive) Fox 2 news reporter Charlie LeDuff,  Fox 2 pulled Bing’s post-speech airtime altogether.

LeDuff tweeted:

Detroit Mayor Bing refuses me as his interviewer after State of City. Fox2 bosses Refuse him airtime all together. I work for a good org.

Bing also avoided giving any hints as to whether he plans to run for re-election this year.

Did anyone else watch the State of the City? Your thoughts?

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?

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. 

From the Wall Street Journal:

 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. 

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.