Detroit, Emergency Manager Law, Emergency Managers — April 5, 2012 at 6:58 am

Detroit City Council approves consent agreement in 5-4 vote, avoids Emergency Manager, but…


Public Act 4 no longer in play in Detroit

Detroit’s financial review team was given the okay to meet yesterday morning by the Michigan Court of Appeals, clearing the way for them to vote to approve the consent agreement between the city and the state in the afternoon. And, last night, the Detroit City Council followed suit in a 5-4 split decision, agreeing to the consent agreement, actually called the “Financial Stability Agreement”, which gives city leaders some measure of control, including choosing some of the members of the financial advisory board.

Under the deal, a financial advisory board whose members would be appointed by Gov. Rick Snyder, Mayor Dave Bing and the City Council would advise and review all budget matters and grant approval of union contracts. […]

Snyder would appoint three members to the advisory board. Bing and the council would appoint two each and would jointly appoint another with Snyder. The state treasurer would appoint one member.

The 5-4 council vote came just 24 hours before Snyder’s deadline for appointing an emergency manager, who, among other broad powers, could gut union contracts, cancel contracts with city vendors and eliminate departments to rein in the city’s runaway budget troubles.

The council vote came after the influential Council of Baptist Pastors of Detroit and Vicinity announced they had thrown their support behind the consent deal over more draconian options and some angry residents accused city leaders of turning their backs on the city’s legacy of unionism and its place as a majority black-run city.

You can read the 59-page Financial Stability Agreement HERE.

The entire process appears to be taking its toll on Detroit Mayor Bing who was readmitted to the hospital yesterday.

Although the agreement was signed and it is expected to be ratified by Mayor Bing and Governor Rick Snyder, as well, there are still lawsuits pending regarding violations of the open meetings act and by unions to prevent the agreement from impacting their negotiated collective bargaining agreements.

[E]ven with an agreement in place, lawsuits aren’t likely to stop anytime soon.

State and federal judges still have to determine whether state and city officials violated the Open Meetings Act while negotiating the deal and whether certain components of the plan are legal.

Union activist Robert Davis, whose lawsuits often stymied efforts to negotiate a plan dealing with the city’s financial crisis, has vowed “to take this to the appropriate courts until the law is followed.” […]

Labor unions are suing Gov. Rick Snyder and state Treasurer Andy Dillon to stop the state and city from using a consent agreement to impose tough new contracts on city employees after labor unions negotiated new contracts and $68 million in concessions with Mayor Dave Bing’s administration.

“These are not small issues,” said Richard Mack, an attorney for AFSCME representing a coalition of 33 labor unions suing the state.

This agreement locks Detroit’s fate in place even if the effort to repeal Public Act 4 is successful. We will know in the next 2-3 weeks if enough valid petition signatures were gathered. If they were, Public Act 4 is put on hold and there will undoubtedly be a court challenge regarding what happens next. Some feel that the predecessor to Public Act 4, Public Act 72, will go back into place. Others feel that, because PA 4 replaced PA 72, that Michigan simply will no longer have an Emergency Manager or Emergency Financial Manager law until the November vote decides the fate of PA 4.

Nevertheless, by signing the financical stability agreement with the state, the outcome of the repeal effort will not impact their situation in any tangible way.

This agreement keeps Detroit from facing a complete takeover and seemed to be the best compromise between doing nothing and the draconian step of imposing an Emergency Manager. Clearly something must be done. What I will continue to say, however, is that getting the books balanced is only part of the long-term solution. Until our state begins to reinvest in our aging manufacturing cities, investments that will help them become attractive to businesses looking to set up shop in our state or to expand their operations, all of this is simply hand waving before the cities eventually implode. Without a reinvestment strategy to rebuild these cities, the so-called “rising tide” that massive cuts to corporate taxes is supposed to stimulate will simply pass by cities like Benton Harbor, Pontiac, Flint, Highland Park, Ecorse, Inkster and, yes, Detroit. It’s my fervent hope that our CEO governor and his Republican colleagues in the state legislature figure that out.

[Image credit: Anne C. Savage, used with permission.]