Rick Snyder: Progress Made on Detroit Finances Deal

State and city leaders are making progress in their negotiations about how best to rescue cash-strapped Detroit and could have a deal in place later this week, Michigan Gov. Rick Snyder said Monday.
by | March 26, 2012

DETROIT (AP) — State and city leaders are making progress in their negotiations about how best to rescue cash-strapped Detroit and could have a deal in place later this week, Michigan Gov. Rick Snyder said Monday.

A review team met Monday afternoon and could recommend whether to appoint an emergency manager to oversee the city's finances, which some protesters in attendance likened to slavery as they broke into verses of "We Shall Overcome."

Snyder, however, said that after a contentious public debate, the two sides are close to a "financial stability agreement," which likely wouldn't strip as much authority from city leaders as the emergency manager process would.

"My role is not to run the city of Detroit. My goal is for the state to provide a supporting resource, be a partner," Snyder said. "Much of this agreement is pretty far along. We need to make some reviews. Both the City Council and mayor need to make some reviews."

Snyder spokeswoman Geralyn Lasher said the two sides "could be a paragraph or two" away from a deal.

During the financial review team's meeting, the packed crowd shouted angry chants against any deal that didn't leave Detroit in charge of its own fiscal matters. "No consent decree!" the crowd chanted, and "When do we want our money? Now!"

"The governor assured me today he doesn't want an emergency manager, and neither do I," state Treasurer Andy Dillon said, only to see his words greeted with the crowd's roar of "liar!"

A final deal remains up in the air in part because Detroit Mayor Dave Bing is hospitalized after having surgery over the weekend on a perforated intestine, said Dennis Muchmore, Snyder's chief of staff.

Doctors said the mayor likely would remain hospitalized for five to seven days, but would be able to perform some duties of his office. Bing's chief of staff and deputy mayor in his absence, Kirk Lewis, is handling negotiations with the governor's office.

Detroit faces a $200 million budget deficit. Dillon has said Detroit could run out of cash by the end of May.

"Everyone knows Detroit's finances are in very difficult shape. Times are very difficult in Detroit," Snyder said.

Snyder had proposed using a nine-member advisory board to spearhead long-term restructuring for the city, while Bing and other city leaders complained it would take too much authority from elected officials. They wanted a smaller seven-member board to "monitor" the restructuring.

As the plan stands now, the financial advisory board originally proposed by Snyder would act as Detroit's board of directors, offering advice and guidance to the mayor, Muchmore said.

But that board would be empowered to step in and do far more — including deciding what the city budget would look like and other financial decisions — if the mayor and City Council fail to follow certain steps to keep Detroit afloat and fail to pay off the city's long-term debt.

"The financial advisory board doesn't do you much good if it doesn't have any power," Muchmore said. "It's all about accountability and efficiency."

Last week, the 10-member review team concluded that a "severe financial emergency" existed in Detroit, a determination that pushed forward the possibility of appointing an emergency manager.

Under Public Act 4, an emergency manager would have the authority to remove the mayor and City Council, and redo collective bargaining agreements with Detroit's municipal unions.

Snyder has 10 days in which to decide whether to follow an emergency manager recommendation from the review team, which leaves more time for a consent agreement to be reached. Once Snyder makes a decision on an emergency manager, city officials have 10 days to comment on it, so the process could continue well into April.

The final financial stability agreement is likely to contain language that keeps it in place even if opponents of the state's emergency manager law are found to have submitted enough valid signatures to put an issue on the November ballot that could lead to the act being repealed. The act could be suspended in late April if state elections officials certify that the measure will be on the ballot.

Copyright 2012 The Associated Press.


More from State News