Bing blasts proposed consent agreement: ‘This will not solve our problems’

Share on FacebookTweet about this on TwitterShare on Google+Share on LinkedInPin on PinterestShare on RedditEmail this to someone

Courtesy of The Detroit News:

Detroit — Mayor Dave Bing today issued a scathing critique of Gov. Rick Snyder’s proposed consent agreement, saying it hinders Detroit residents’ electoral rights and fails to represent the kind of partnership needed to turn around the city.

Bing called Snyder “disingenuous” in his recounting of a near-deal in their meeting last Friday in Snyder’s Detroit office.

“I’m tremendously disappointed that this consent agreement proposed by Governor Snyder does not represent the spirit of partnership needed between the city and the state to resolve the city’s financial challenges,” Bing said in a prepared statement. “It forfeits the electoral rights of the citizens of Detroit guaranteed by the democratic process.”

The mayor said that he “personally” called the governor on Monday after reviewing the proposed agreement and told him it was unacceptable.

“He’s being disingenuous when he says this agreement leaves elected officials in charge of the city,” the mayor continued. “In fact, the proposed, nine-member advisory board selects and ‘oversees’ the functions of the City’s COO, CFO and Human Resources director – not the elected mayor.”

Bing added: “I never asked for a consent agreement. But we’ve provided the governor with an action plan to resolve our financial shortfall, which we believe is reasonable and achievable with support from Lansing. This proposed agreement will not solve our problems.”

The proposed consent agreement given to Detroit city officials today has City Council reporting to the mayor and a newly created Financial Advisory Board that’s empowered to fix the city’s troubled finances.

The 25-page document, first reported by The Detroit News, calls for the nine-member advisory board to administer the agreement and “take action to mitigate fiscal distress and promote fiscal stability” by overseeing and supervising a long-term financial and operational restructuring of the city.

Bing pointed out that the proposed agreement also “circumvents the role and power of the City Council as the legislative body, waives the ability of elected officials to contest any aspect of the agreement, and dismisses the unprecedented effort and concessions made by the city’s labor unions to avoid an economic catastrophe.”

A five-page executive summary was released to council members on Monday. The document must be signed by members of the state review team that’s studying Detroit’s finances; the mayor; state Treasurer Andy Dillon; and Snyder.

Dillon told reporters this afternoon the state is willing to help with Detroit’s short-term cash crunch if the city accepts the terms of the consent agreement.

The state will allow the city to refinance some debt to generate about $137 million, Dillon said. The move would provide $37 million in immediate cash and allow the city to borrow another $100 million, he said.

The proposed advisory board would oversee the “activities” of the city’s chief operating officer, the chief financial officer and human resources director and other appointees. If the city fails to adhere to the agreement, it would trigger an emergency manager under a term called “material breach.”

The board members — excluding the treasurer — would make $25,000 annually. The board would be comprised of Dillon, an appointee of the governor, one appointee of the treasurer, two from the mayor, three individuals selected by the mayor and council, and one individual selected by the council “who shall serve at the will of the City Council.”

After the board members are appointed, Snyder would select the chairperson. The board would be empowered to review and approve sources of funding for the city, review and approve the city’s operating and capital budgets and hire and employ staff to complete its mission.

Snyder defended the agreement in comments to media in East Lansing this afternoon, saying the mayor and city council will still have significant control over selection of the advisory panel.

“Don’t we have to do something in terms of getting a consent agreement done? I wasn’t seeing a lot of action,” Snyder said, according to MIRS News Service. “Let’s get something out there. Let’s be public about it. Let’s get the city of Detroit back on the path of being a great city again.”

The proposed consent agreement was delivered to the city council hours before Snyder’s 10-member financial review team held an open meeting in downtown Detroit.

“Clearly time is running out and doing nothing is not an option,” Dillon told the panel Tuesday afternoon.

Former Washington, D.C. Mayor Anthony Williams was addressing the panel this afternoon about similar turnaround efforts in his community.

Williams on Tuesday backed the proposed consent agreement for Detroit, contending it would empower, not hinder, a financial turnaround for the troubled city.

Williams said that although Washington, D.C., officials heard “all of the arguments” that intervention was unconstitutional, it was important to help bring investment back to his city.

“I think the most becoming thing about this consent agreement is it puts in place in a very powerful way that’s sensitive to the concerns of the citizens, sensitive to the concerns of the elected officials,” he said. It also “puts in place the right connection between the critical, important role of elected officials in setting the policy agenda for the city.”

The review team will go through the document and make a decision on Friday. Dillon then plans to meet with council members early next week to finalize the agreement.

“We invite (the council’s) input,” Dillon said. “We had various versions last week. It’s an evolving document.”

Plan would downsize city

The three-year agreement or “recovery plan” Snyder is proposing for Detroit will remain in “full force and effect” even if Public Act 4 is repealed, according to the document.

The agreement also seeks to reduce the “head count” for city employees, reduce the number of vendors serving the city, outsource certain departments and functions, pursue potential sales of city assets and enhance the city’s ability to collect revenue.

The mayor and chief operating officer, according to the agreement, shall have the authority to “negotiate, renegotiate, execute, amend, modify, reject or terminate” collective bargaining agreements “consistent with applicable law and subject to the approval of the Financial Advisory Board.”

Councilwoman JoAnn Watson Tuesday called the consent agreement a violation of the charter and outside the scope of how the council normally operates.

“Contracts should not be shopped office to office,” Watson said. “It’s a violation of the charter and the normal rules of operation of a contract. A contract, that’s what a consent agreement is.

“I’d like to understand how it happened that the treasurer was able to walk around office to office. There’s something out of order with that. How can somebody declare you in deficit when they owe you money?” Watson was referring to the city’s contention that the state of Michigan owes Detroit millions in unpaid state revenue-sharing dollars.

Later, she said working with the state is helping to create the city’s demise.

“We ought not be helping the governor dismantle the city. You better stand up and represent this city,” Watson said to her colleagues.

Council members Tuesday called on legal and financial staff to review the current version of the consent agreement before it makes any decisions. The panel is also considering drafting its own document to send to Lansing.

Councilman Kenneth Cockrel Jr. said based on the version he saw Monday, there’s no way he will agree to the document.

“I am open to a consent agreement, but it has to be a consent agreement that makes sense,” Cockrel Jr. said. “Would I be open to negotiating something that makes sense to protect the interests of Detroit, the authority of the mayor and the council, absolutely? That’s what we have to ultimately work on.”

Meanwhile, public reaction Tuesday was swift as community leaders and others castigated the city council for giving up city control to the state.

“I’m old enough to remember an old adage that says if you lay down with dogs, you’re going to come up with fleas,” said Greg Murray, vice president of the city’s Senior Accountants, Analysts and Appraisers Association. “Your legacy should not be that you turned over the city of Detroit. Three years later, here we are trying to turn over the keys of Detroit to the state of Michigan. Your legacy is that you stood up for Detroit.”

‘Take this consent decree… and shove it’

Brandon Jessup, a leader of efforts to repeal the state’s emergency manager law, called the draft consent agreement appalling.

“To suggest the mayor should have all the powers of the emergency manager just two weeks after we submitted 226,000 signatures to abstain the law, it shows Snyder is disrespectful to the Democratic process,” Jessup said. Marcus Cummings, 23, who lives on the city’s west side, told city council members Tuesday he didn’t vote for a dictator. He wants his elected officials to solve the city’s fiscal woes.

“I voted for an executive branch and a legislative branch,” he said. “That’s what we demand. We can solve our own crisis. I’m not asking the city council not to vote on this consent decree. I’m demanding the city council take this consent decree and shove it.”

The document doesn’t call for any short-term cash assistance for the beleaguered city, which is set to run out of money soon.

Under the proposed agreement, the nine-member advisory board would have authority to review and approve sources of any funding for Detroit. Any significant cash from the state would also have to be appropriated by the Legislature and by Snyder.

Ari Adler, spokesman for Republican House Speaker Jase Bolger, said the Legislature has not received a proposal for cash assistance.

“We have not been asked for any sort of funding for Detroit, either by the governor’s office or the city,” Adler said. “We don’t have all the details on the consent agreement and that is something that is really between the city of Detroit and the governor.

“The speaker does believe there has to be a long-term plan and bold action to ensure the citizens of Detroit receive essential services and that the state’s taxpayers are protected.”

Bing told members of The Detroit News editorial board Friday that Detroit cannot turn itself around without financial help from the state. He said financial help would need to be part of any consent agreement that requires the city to meet certain benchmarks and privatize some services and departments.

lfleming@detnews.com

(313) 222-2072

Detroit News Reporter Karen Bouffard contributed

About Guest Writer