Tagged: Detroit consent agreement

Detroit leaders not consenting to Snyder's consent decree plan

On Tuesday, Gov. Snyder and state treasurer Andy Dillon put forward a plan to rescue Detroit's finances. Almost immediately the plan was rejected by city leaders. They said the proposed plan would strip them of their power. "Why the hell would I sign it?" Bing said when appearing before a group of students yesterday.

More from the Detroit Free Press:

Bing, Snyder, council members and Detroit ministers took to the airwaves and podiums Wednesday, keeping Tuesday's dust from settling.

Bing, in an uncharacteristically combative tone, said the state's proposed consent agreement to fix the city's deficit is unconstitutional and will undermine progress being made by his administration.

Snyder described the criticism as "unfortunate."

Both men defended their positions Wednesday, and at times, both seemed disappointed, frustrated and irritated.

The Free Press reports Bing and city council leaders are working on a counter-proposal.

Gov. Snyder and Lt. Gov. Brian Calley plan to hold a press event at 10 a.m. this morning "to discuss Detroit’s critical financial situation."

Gov. Snyder's higher education plan criticized by university presidents

Four university presidents testified in front of members of the State House Appropriations Subcommittee on Higher Education yesterday. They were critical of Gov. Snyder's plan for higher education funding. Snyder's budget proposal calls for increases in state support if universities meet certain goals.

University of Michigan President Mary Sue Coleman said Snyder's proposal is not a fair measurement of success. From MLive.com:

“By all accounts, the University of Michigan is a world-class institution of higher education,” she said. “Yet, in the budget proposal that has been recommended, you could erroneously come to conclude that based on the performance measures that were evaluated; the university is a failing institution.”

Part of Gov. Snyder's proposal rewards universities for keeping tuition rates down. Grand Valley State University President Thomas Haas said tuition rates are highly dependent on state aid. From the Detroit Free Press:

"It is a fact that the single greatest impact on tuition and debt is the presence or absence of state appropriation," Haas said. "If the state had been able to avoid cuts in the past decade, our tuition could be $6,000 a year instead of $9,000. If the state had been able to maintain the 75/25 ratio of long ago, our tuition could be just $3,000 a year, a number well within reach of nearly every qualified student."

Michigan's home foreclosure rate declining

It's good news for a state that has been battered by the economic downturn. Michigan Radio's Steve Carmody reports today "one in every 433 Michigan homes had a foreclosure notice filed against it in February." That's down 25 percent when compared to February a year ago.

The better statewide numbers are mirrored in the Detroit market (down 17 percent from January-down 27 percent from February, 2011), which has long been the epicenter of Michigan’s foreclosure problems.

The nationwide home foreclosure rate declined by 8 percent when comparing February 2012 to February 2011.

DETROIT (AP) - Detroit Mayor Dave Bing says he won't accept the position of emergency manager for the city even if it's offered by the state.

The mayor's remarks came Wednesday during a forum at Wayne County Community College District, one day after state officials delivered a proposed consent agreement for the city. The proposal was an ultimatum that would shift political power, consolidate public utilities and shrink city staff and salaries.

Bing says he disagrees with the proposed consent deal and had no input in the consent agreement proposed by Gov. Rick Snyder and Treasurer Andy Dillon.

Detroit is facing cash flow problems and a $197 million budget deficit. A state review team has already been digging into its troubled finances, and the governor could appoint an emergency manager.

Sadly, it appears that the state of Michigan will be taking over the city of Detroit, one way or another. There are a lot of reasons that this is a tragedy, and also a few reasons to be happy about this.

However the next few weeks play out, the city, one way or another, seems likely to get the help it needs to straighten out decades of terribly mismanaged finances. Yesterday, Governor Snyder announced details of a proposed “consent agreement” which would bring radical change and fiscal responsibility to Detroit.

Michigan-based bank among those to fail stress test

Ally Financial, headquartered in Detroit, made the Federal Reserve's list of major banks that failed to show they have enough capital to survive another serious downturn.

From the Associated Press:

The Federal Reserve says 15 of the 19 major banks stress-tested passed. The Fed noted that all 19 banks are in a much stronger position than immediately after the 2008 financial crisis. Still, SunTrust, Ally Financial and MetLife joined Citi in failing to meet the test's minimum capital requirements.

Ally Financial released a statement saying the Fed's analysis "dramatically overstates potential contingent mortgage risk, especially with respect to newer vintages of loans."

The Fed reviewed the bank balance sheets to determine whether they could withstand a crisis that sends unemployment to 13 percent, causes stock prices to be cut in half and lowers home prices 21 percent from today's levels.

Mixed reactions to Gov. Snyder's consent agreement plan for Detroit rescue

Yesterday, Detroit City Council saw a proposed consent agreement put forward by Gov. Rick Snyder and state treasurer Andy Dillon. The agreement proposes a financial advisory board, among other things, to help right Detroit's financial problems.

The initial reaction from many on city council and Mayor Dave Bing was negative - with several saying the plan takes too much power away from the city's elected leaders.

The Detroit Free Press gathered reaction from Detroit residents, which they say, was mixed. Here's one example:

Sherina Sharpe, 31, a lifelong Detroit resident who teaches writing, said she doesn't know what the best course of action is, but she wants to see the city flourish and isn't ready to shoot down proposed solutions.

"I'm open to solutions as long as they actually benefit the people who live here," she said.

You can read the agreement and weigh-in with your thoughts here.

Broadband deal reaches across Big Mac and into the Upper Peninsula

The Mackinac Bridge won't just transport people and goods, it will also transport large packets of information under a new deal announced yesterday. From the Associated Press:

Gov. Rick Snyder on Tuesday announced a deal between the nonprofit Merit Network Inc. and the Mackinac Bridge Authority. It allows Merit Network to purchase strands of cable crossing the 5-mile-long Mackinac Bridge for use in a fiber-optic broadband project called REACH-3MC.

The project is part of an effort to expand broadband access in Michigan. Snyder says it will help "serve job creators and the Upper Peninsula."

Gov. Rick Snyder presented a proposed consent agreement to City of Detroit officials. Snyder wants to use a consent agreement rather than appoint an emergency manager to fix Detroit’s finances.

Stephen Henderson is the Free Press’ editorial page editor and of “American Black Journal.” He spoke with Michigan Radio’s Jennifer White.

“The whole idea of the consent agreement is about control and power, and this agreement would ask the Mayor and City Council to give up a lot of that,” Henderson says.

Gov. Snyder and state treasurer Andy Dillon delivered their plan to Detroit city council this morning to turn around Detroit's finances.

The consent agreement calls for a financial advisory board with members appointed by the Governor, Mayor Bing, and city council to oversee decisions made by city leaders

The Detroit News reports that after negotiating with Gov. Snyder, Mayor Bing did not like the proposal, so Snyder decided to go straight to city council with the plan:

The governor and Bing neared a deal after a productive meeting Friday afternoon, and Snyder hoped an announcement could be made Monday morning, when the pair were scheduled to appear jointly at the Pancakes and Politics breakfast. But the mayor wobbled Sunday night, apparently concerned about giving away too much of his power, and Snyder decided to shoot the puck. He called Bing before the breakfast, told him he was taking the deal to council, and the mayor decided to skip the breakfast program.

Gov. Snyder said this morning that the city has until March 28 to decide on the consent agreement, after that, the Governor could decide to appoint an emergency manager to run things.

"We have offered every opportunity for the city to control its own fate," he said. "There's no point in this being adversarial. … But we don't have forever as an option."

So what do you think? You can read what others are saying about the consent agreement, or you can read a draft of the plan yourself and tell us what you think.

Should the city take this deal?

We’ve known for awhile that Detroit’s finances are reaching a crisis point. It’s believed the city could run out of money within the next few months. News broke yesterday evening that the Snyder Administration will try to remedy the situation. Governor Snyder will lay out details of a proposed consent agreement to members of the Detroit City Council today. A consent agreement would give the city’s elected officials broad powers… similar to those of an emergency manager.