Detroit Mayor, Governor Wrangle over Consent Agreement

The debate over how best to help Detroit avoid going broke escalated into a war of words Wednesday as Gov. Rick Snyder urged the city to get over a "cultural challenge" by accepting his plan for reviving its finances, and local officials snapped back that they're up to the job.
by | March 15, 2012

The debate over how best to help Detroit avoid going broke escalated into a war of words Wednesday as Gov. Rick Snyder urged the city to get over a "cultural challenge" by accepting his plan for reviving its finances, and local officials snapped back that they're up to the job.

Detroit leaders have just over a week to decide if they're going to enter into a consent agreement with the state that includes an oversight board or face the likely appointment of an emergency manager who would have even more sweeping powers to take away city officials' control. With the city $197 million in the hole and about to run out of money, Snyder said city leaders' chip-on-the-shoulder attitude isn't helping.

"If you know someone that's got a challenge, is the right answer they tell you to go away? Or should they hold up their hand and say, 'Please come help?'" Snyder said Wednesday during a speech at the Great Lakes Broadcasting Conference in Lansing. "The inclination so far has been to say, 'Go away.' I don't believe that's a good answer."

When told Snyder had described the city's resistance to state help as a "cultural challenge," Mayor Bing fired back that he is open to anything that's good for Detroit.

"I'm receptive to help, but you're not going to just jam something down my throat and expect me — if I don't like it — that it's going to be OK," Bing said. "And that's what happened with this agreement. I don't like it."

Bing announced Wednesday night that a counterproposal to the governor was being drafted in meetings that were under way between the staffs of the mayor and the City Council.

"The administration believes any consent agreement reached between the city and the state must be a collaborative, transparent effort that holds all parties accountable to its execution," Bing chief of staff Kirk Lewis said in a statement.

Earlier Wednesday, Bing said the state's proposed consent agreement was little different from the appointment of an emergency manager. The agreement calls for Bing and Detroit's elected City Council to report to the nine-member advisory board on the city's budget cuts and other financial issues. A new chief executive officer, chief operating officer and human resources director for the city would be jointly recommended by Snyder and Bing but chosen by the board.

The board also would have final say over selling city assets, staffing and workers' pay and benefits, though the agreement encourages cooperation with city officials. If an emergency manager is named, elected officials could be stripped of their pay and powers and union contracts could be thrown out.

Despite the looming consequences, a defiant Bing said his administration's already doing what's needed to be done to cut costs and rework union concessions seen as key to helping Detroit get back on a more solid financial footing.

"I won't work for the governor. I won't work for that financial team of nine people. I work for people in the city of Detroit because they voted me in to do this," he said. "We didn't vote the governor or Lansing or these nine people to run the city of Detroit, and they shouldn't. This consent agreement is basically an emergency manager. Instead of one it's nine."

Snyder countered that the mayor and City Council still would be responsible for setting strategy and policy and would be able to decide on spending within certain limits under the consent agreement.

He said his priority was getting better services to residents, though some Detroiters expressed skepticism.

The Rev. Charles Williams II of Detroit's King Solomon Baptist Church, where civil rights leader Malcolm X spoke in the 1960s, called Snyder "very disrespectful" in a news release and said the Republican governor was underestimating the intelligence of city leaders. Distrust between the largely black city and its mostly white suburbs has grown since the 1970s, and many city residents aren't happy about the state stepping in.

But Snyder's communications director, Geralyn Lasher, said the city needs to turn to professionals if it's going to succeed.

"These would be people who actually know what they're doing, as opposed to my brother's cousin who's going to get appointed, or something like that," she said in a dig at the nepotism that ran rampant while former Mayor Kwame Kilpatrick was in office.

Kilpatrick's relatives and friends received city contracts and jobs during his six years in office, which were marked by a text messaging scandal and charges against some of those contractors and employees. Kilpatrick pleaded guilty in two criminal cases and served time for those crimes and for violating probation. He currently faces federal corruption charges.

Terry Conley, a partner in a major suburban Detroit auditing firm, Grant Thornton LLP, said the city's financial mess is about business, not race. He urged Bing to find common ground, even if he feels the need to fight for the city's independence.

"This is a very emotional situation for the mayor and he's under a tremendous amount of pressure. I would expect him to be passionate about his beliefs," Conley said.

Copyright 2012 The Associated Press.


More from Finance