Detroit financial review team avoids court, pushes on toward deadline

Mar 12, 2012

The state team reviewing Detroit’s finances has avoided a scheduled court date—and possible contempt of court--by disbanding a controversial sub-committee.

An Ingham County Circuit Court Judge had ordered the team to appear in court Monday.

That same judge had earlier ruled the team must meet in public to comply with the state's Open Meetings Act. They did, but quickly formed a sub-committee that had planned to meet in private to “advise the committee of the possible statutory options for its recommendation" to Governor Snyder.

But State Treasurer Andy Dillon, who leads the review team, says they decided not to push the issue.

“There is a lot of work to be done," Dillon said. "We’ll just do it outside of the sub-committee. I’m working on it with my staff, and what we’ll do is we’ll present to the full review team the options that we see.”

Speaking last week in Detroit, Dillon said the review team plans another public meeting sometime in "mid-March." State officials have yet to confirm a date.

The team has already declared that “severe fiscal stress” exists in Detroit. Barring drastic changes or an unexpected influx of money, officials expect the city to run out cash before the end of the fiscal year.

State officials say they won’t let that happen. But Governor Snyder and Mayor Dave Bing both say an emergency manager probably isn’t the answer.


“The goal has always been to get to an intermediary step, which is sometimes called a consent agreement,” Dillon said.

Tim Wittebort, an attorney who served on the state team that reviewed Pontiac’s finances several years ago, says a consent agreement would give Detroit’s elected officials power similar to an emergency manager’s—with one key exception.

“And that's the exception of terminating the collective bargaining agreements or contracts," Wittebort said. "But all the other powers an emergency manager has, for the most part, can be delegated to elected officials.”

But a consent agreement does give those officials broad powers over collective bargaining contracts once those contracts are expired.

Both the Detroit Mayor and City Council would need to approve the terms of that consent agreement.

The Council is split on the issue. A spokeswoman for Bing says they’re not looking for a consent agreement, but would accept one if that’s what the state recommends.

The review team must make its recommendation to the Governor by March 28th.