Despite assurances from Clint Eastwood andEminem, Detroit’s rebirth may be on hold, as the city is on a Greece-like track to run out of money before summer, and things are getting increasingly testy between the state’s Republican governor and the city’s Democratic mayor.
Although the automotive sector and some other parts of the city’s business picture have bounced back in recent years, Detroit city government finances are still on an unsustainable course, and the city does not have a viable fiscal plan to avoid running out of money in May.
Last week, the city rejected a proposed consent agreement that would have given a nine-member state-appointed oversight board a voice in city government and started a war of words with the state government, which has its own deadline set for next week.
Mayor Dave Bing said it would be “nuts” to think he would accept the oversight board. “When I did read it, I was appalled.” Mr. Bing and theCity Council were expected to meet this week to come up with their own plan, though such efforts have failed in the past.
The political conundrum — the city won’t cede power, but seemingly can’t solve its problems — means analysts and activists here are increasingly resigned to the possibility that Michigan will step in and humiliate its biggest city by appointing an emergency manager to take over its finances, essentially turning Detroit into an American version ofGreece.
“Something has to happen. I think what everybody agrees is that the status quo is not sustainable. The city is out of money,” saidMichigan State Universityeconomist Charles Ballard. “I’m sympathetic to the consent agreement in the sense that right now it seems that it’s the only thing on the table. Local governments don’t like to be told what to do, so it’s understandable that there is reluctance in parts of the city.
“It reminds me a lot of the debt crisis in Europe,” Mr. Ballard said. “The Greeks are resentful for this feeling they are being told what to do by the Germans, but the status quo was not tenable.”
Michigan Gov. Rick Snyder has repeatedly warned that time is running out and that while it’s not his preferred option, the state would appoint an emergency manager and strip power from the mayor and City Council if necessary. On March 26, an emergency review team he put into place months ago must come back with recommendations on the need for a financial takeover.
That law letting the state do that has been used successfully in such other Michigan cities as Ecorseand Benton Harbor. Detroit’s public school district has been under an emergency financial manager for several years in a reorganization widely considered to have been painful but successful.
Doing nothing to protect city services and keep the city out of bankruptcy is not an option, Mr. Snyder said.“It’s not about [Mayor Bing] and I. It’s about showing results for citizens,” the governor said Friday in a WDHB radio interview with host Mildred Gaddis. “I have no interest in terms of interfering in Detroit at all. It’s not Michigan versus Detroit. We are in this together.”
The governor has planned town-hall meetings to get citizen input and to help educate residents about the city’s financial problems in advance of any decision.
The notion of the state running its largest city and the image it sends to the nation and world, however, has angered many Detroiters, including some civic and religious leaders, who decry big-foot tactics from Lansing — even as money needed to fund police, fire and emergency services and even pension payments — continues to evaporate.
Detroit Free Press columnist Rochelle Riley told city readers Friday that time has run out and that the mayor has been too slow to offer solutions.
“Bing failed to fix the mess because he was operating at 33⅓ rpm while the crisis was running at 78,” she wrote. “(That’s a reference to the vinyl records on my grandmother’s stereo years ago. The 33s ran slow. The 78s ran fast. And the 45s were Motown).
“City leaders also are acting like no one is watching,” she added. “Not the business community that is holding out hope that Detroit will be back. Not the young families who want to move into Detroit because they want to be in a city. And not the investors and business owners from other states who might have thought that Detroit could be the next Cleveland. … Snyder, who is desperately wooing them here, can no longer afford to let the state’s jewel — and Detroit once was that and can be again — collapse.”
Steve Tobocman, a former Michigan staterepresentative who now manages a consulting firm for community-development projects, says it’s clear that neighbors and residents need to talk more and pull together to solve city issues in the wake of the budget crisis.
“We’re having a conversation about who is going to manage cutting costs and raising revenues, as opposed to what we are going to do in cutting costs and raising revenues,” he said. “I don’t feel that the governor or the council or mayor are explaining that well to the general public.”
Like many other professionals, Mr. Tobocman, who used to represent the city’s Mexicantown area, says he chooses to live in the city rather than the suburbs, citing its cultural appeal and tight community neighborhoods.
“Detroiters are proud folks, so of course having an emergency manager from the outside, unelected directly by the people, to make those kinds of decisions for our city is disappointing. But at the end of the day, whether it’s our governor, his appointee or our directly election mayor and City Council, something has to be done to make tough decisions and create a road map here that works.”
With time and money running out, Detroit Mayor Dave Bing said his administration has completed a draft counterproposal to Gov. Rick Snyder's proposed consent agreement and is waiting for the City Council to weigh in before presenting the plan to the governor.
Bing said his draft, called a Financial Stability Agreement, would give the city the appropriate tools to address its financial crisis and preserve the rights of Detroiters to be governed by elected officials. The document was sent to council members Sunday night.
The mayor said his executive staff will meet with council members over the next couple of days to get their feedback to complete a final draft this week.
Detroit's elected officials have been working on an alternative consent agreement since last week, after the one Snyder proposed and made public last Tuesday was widely viewed as a hostile takeover of Detroit governance."As I've said repeatedly, I have no problem accepting help from the state, and this agreement includes an advisory board that provides the state a to monitor the city's progress," Bing said in Monday's statement. "This draft agreement also includes a mechanism to establish a budget and limit spending, while providing reporting obligations to the board."
Snyder's proposal includes the appointment of a nine-person Financial Advisory Board and its three appointees, with sweeping power to restructure city government and control Detroit's strings, while leaving Bing and the council in office -- but with reduced powers.
Bing and city officials began working on a counter-agreement last week, one that would give the council more of a say in who sits on the Financial Advisory Board.Snyder could appoint an emergency manager to run Detroit if a compromise is not reached with the mayor and the council before the end of this month.
Public Act 4, which was signed by Snyder last year, strengthened and expanded the powers of state-appointed managers who run troubled municipalities and school districts. The managers can cancel or modify contracts and dismiss elected officials. There is an effort under way to repeal the law.
"This counterproposal purposefully shifts from the language of a consent agreement by recognizing the current legal vulnerabilities of Public Act 4," Bing said in his statement. "It is designed to provide a reliable road map for the city and state to collaborate in resolving the city's short-term cash flow challenges and long-term structural changes."
But the state isn't counting on Bing and the council members to come up with a workable plan that would avoid the appointment of an emergency manager and address the city's faltering finances.
At a forum Monday on the emergency manager law in Ann Arbor, Roger Fraser, deputy state treasurer for local government services, said, "We're not optimistic that they're going to come to terms on a consent agreement.
"He wants a continuation of his leadership when he hasn't "He wants a continuation of his leadership when he hasn't demonstrated the capacity to do that in the last three years," Fraser said of Bing.
The forum was sponsored by the Gerald R. Ford School of Public Policy at the University of Michigan.
Last week, the Free Press obtained a 26-page draft being crafted by Bing's office that would give the mayor many of the responsibilities of the state's proposed Financial Advisory Board.
Bing also would assume the powers of an emergency manager, except that of being able to terminate union contracts.
Under that draft proposal, Bing would be authorized to unilaterally lay off employees, close departments, end services, terminate outside contracts and appoint a chief operating officer, chief financial officer and human services director -- all tasks that belonged to the advisory board under the state's proposal.
Terry Stanton, a spokesman for state Treasurer Andy Dillon, said Monday afternoon that state officials had not received a copy of Bing's latest counterproposal.
"We look forward to reviewing the proposal whenever we receive it," he said.
Snyder is in and Germany this week on a trade mission.