State to Give Council Consent Agreement

[Zacha341]

Hah! I was almost laughing when Bing was cursing and making his pronouncements. It felt like grand standing - so fake. Afterall, he will be long gone out of Detroit after all of this - whichever way things bow.

...If I hear him or any one else say on council say "why in the hell would I do... " I don't know what I'm going to do. So unprofessional! This is the same "constituents" that vetoed Kwame Kilpatrick in TWICE and if he'd run again would probably veto him back in office again ! I believe the voting "constituents" left in the city are two fold, those who realize that we are in BIG trouble and this is inevitable, and then there are the others who still believe that we can "kick the can down the road", well folks they are taking the can away, so time to get to work , we need to stop trying to put off the inevitable.

[Zacha341]

Yeah, Spivey is being reasonable. Watson not... her commentary is a for another time period. A few years back when or before all the 'jewels' where being STOLEN and diverted from 'within'.

I agree about the blustering, now that the dust has settled for a day. And I'd say council is more divided than opposed...

http://www.mlive.com/news/detroit/in...ment_pitc.html

Councilman Andre Spivey: This is real. We might run out of cash in 60 days. If we run out of cash in 60 days, we are going to have some pissed off city workers who will not come to work and will not service our citizens.

Council President Charles Pugh: Or an Emergency Manager by the end of the month.

Spivey: That’s right…I am by no means saying yes or no to a consent agreement right now. All I’m saying is my colleague [Saunteel] Jenkins asked [Council’s Research and Analysis staff] to look it over and bring back your opinion. From that opinion, we can begin to shape how we think about the document.

[1953]

My concern is that the Governor is trying too hard to be nice and inclusive and he is underestimating how strong Detroit's elected leaders will fight him every step of the way.

In some respects, I think the Gov would be better served by just putting in the EFM and completely eliminating the authority of the elected folks, so they can't get in his way.

Then again, if he does that, it's likely to be challenged in court and, I suspect, blocked by judges empathetic to city leaders. This is really an impossible situation for the Governor - he can try to work with city leaders, who are generally fools and will fight him the whole way, or he can eliminate city leaders and fight it out in court, where he probably can't win.

Meanwhile, the city continues to rack up debt.

[Zacha341]

I agree that EFMs tend to be problematic-often bringing forth a whole new set of challenges. However, the Benton Harbor situation is progressing well and so it's a mess that we are heading this way. The hand-writing was on the wall. Ignored. I spoke on the 'kick the can' fiscal policies back when the stealing fest was in high swing... *crickets* and the beat went on. The frenzy continued. Now here we are.

"I agree with Snyder that there is a huge cultural problem with Detroit when it comes to help from the state [[see JoAnn Watson for one example)."

Anyone care to defend the two state takeovers of DPS and how well those have worked? Based on the state's abysmal performance at DPS, why should any Detroit resident have any faith that the state would be of any more help when it comes to managing the city's affairs?

[ordinary]

Hah! I was almost laughing when Bing was cursing and making his pronouncements. It felt like grand standing - so fake. Afterall, he will be long gone out of Detroit after all of this - whichever way things bow.

Heck, I was almost crying. Bing has turned out to be such a bullshit artist. It was grandstanding.

[Detroitdave]

I just reread my post , I SHOULD HAVE SAID VOTED Kwame in twice and if he ran again would probably vote him back into office[[sad) . It was early in the AM and I was headed out of the door and wanted to get my point across :-).
There's not a lot of wiggle room for Detroit and the options or VERY limited and EVERYBODY knows this. This is why I brought up the analogy of Greece/Germany, Detroit/State.
Are the people of Greece living better ? will the Citizens of Detroit live better? its a lesser of 2 evils ,well all I can say is the days of outside the means of the city are over . Its a simple fact, the numbers and math doesn't add up and every person involved ,knows this and has been saying for months .
We are in BIG trouble, and just how big is FINALLY being put out their for the whole world to see and it's tough, everyone will respect the city and everyone involved ,if we address and start REALLY working at serious cuts, not low hanging fruit , we have to climb a little higher in the tree now !

Hah! I was almost laughing when Bing was cursing and making his pronouncements. It felt like grand standing - so fake. Afterall, he will be long gone out of Detroit after all of this - whichever way things bow.

[Det_ard]

I like that you mentiond Greece.

Would you say Greece is any better with the severe austerity measures they made? In other words, as is today, do you see it FOR YOUR FAMILY as a more livable country in comparison to what is was?

Most would say no.

If anything, it has accelerated their decline per the available evidence.

You've asked the wrong question. It doesn't matter if Greece will be a more or less livable country in the future than it was in the past, because the choice they had available to them was not do you want to be like you were in the past or do you want to be worse off in the future.

Being like they were in the past was not an option available to them. Their choice was do you want to opt for severe austerity measures, or do you want to opt for some other harsh measure, like total default.

Going back to the way things used to be isn't an option for Greece anymore than it is an option for Detroit. Both are stuck with making a decision about their future, choosing between really bad and really, really bad.

[bopcity]

I like that you mentiond Greece.

Would you say Greece is any better with the severe austerity measures they made? In other words, as is today, do you see it FOR YOUR FAMILY as a more livable country in comparison to what is was?

Most would say no.

If anything, it has accelerated their decline per the available evidence.

Good point. However I don't see much correlation between Greece and Detroit. And I'd venture that few, if any, of the armchair quarterbacks here have any real knowledge of what the Greek situation is all about.

I'm not about to stand up for any of the inept or corrupt politicians that contributed to manifesting Detroit's extremely complex problems but far too many people seem to be using the financial mess as an excuse for their thinly veiled racism and/or contempt for Detroit. Isn't it much easier to prescribe so-called 'tough love' for others than it is to experience it yourself?

That said, this Guardian article by John Holloway, addressing a much larger picture, is worth a look, could be a sobering glimpse into our future...

How can we ask of people that they accept meekly the ferocious cuts in living standards that the austerity measures imply? Do we want them to just agree that the massive creative potential of so many young people should be just eliminated, their talents trapped in a life of long-term unemployment?...

For the Greeks to accept the measures meekly would be to multiply depression by depression, the depression of a failed system compounded by the depression of lost dignity...

How long will we stand by and watch the injustices increase, see the health service dismantled, education reduced to uncritical nonsense...

The attack that is so acute in Greece is taking place all over the world. Everywhere money is subjecting human and non-human life to its logic, the logic of profit. This is not new, but the intensity and breadth of the attack is new...

http://www.guardian.co.uk/commentisf...d-system/print

[NewportNic]

If Detroit goes bankrupt who will be hurt? The poor, the unemployed, the homeless? No, these folks will still get food stamps, unemployment, section 8 vouchers [[or public housing), social security, SSI ect. The losers will be the Union Workers current and retired, and all the bureaucrats. I don't know how to avoid the draconian cuts these folks will face but they won't be the first [[or last) to be affected this way... ask the Silver Cup Bakery employees about their pensions, or McLouth Steel or any number of employers who went bankrupt in Metro Detroit. Why are the City employees any different? These companies were mismanaged and so is the City.

Other commenters talked about the 40 year affect of the Debt, why not let a Judge wave his wand [[or bang the gavel) and wipe it away. Then like the Greek situation, GM & Chrysler, the bond holders will take a big hit.

[douglasm]

"...why not let a Judge wave his wand and wipe [[the debt) away." Then see how much bonding capacity you have. We've got a city out here on the edge of insolvency, and one of the concerns is the ripple effect if it "goes under". We have communities all over this area that are concerned that either they won't be able to get funding or interest rates [[thus costs) will rise for such things as sewer treatment plant upgrades or school building bonds. And with very little federal and state money available, bonding is nearly the only option left for needed infrastructure repairs. Thank God for the American Recovery Act or in the little berg I'm a councilman at wouldn't have been able to finance our new sewer system. But that's history, now.

The effects of Detroit going banko are not limited to the city limits, and I would think politicians in the whole area would understand that. The ripple effect of a municipal failure will be long lasting and far reaching. People will look long and hard at the credit worthyness of various government entitites, making it harder and/or more expensive to get loans.

[MikeyinBrooklyn]

why not let a Judge wave his wand [[or bang the gavel) and wipe it away.

There are 2 practical problems with this idea, and a profound moral one.

On the practical side:

1) Absolving Detroit of it's bond obligations would entirely destroy Detroit's ability to ever borrow money again. It would also make borrowing by local governments everywhere- but especially in Michigan- much more difficult and expensive.

2) Not just rich bankers own bonds. Some everyday people own them, too. Even more people have retirement or 401k funds invested in them. They would be badly hurt by Detroit just being allowed to not pay it's obligation.

Lastly, not paying off the bonds amounts to lying and stealing- like any contract breaking is. Lying and stealing by a whole city.

It is reprehensible to think that Detroit's bad decisions should be paid for by others. We need to accept our debt is OUR DEBT. Detroiters voted for the bad government we got, and we need to pay it.

[Jimaz]

...Detroiters voted for the bad government we got, and we need to pay it.

Not to dispute that, but it raises an interesting question: If Detroiters don't vote for a bad appointed emergency manager then they don't need to pay for it? I doubt it would work out that nicely.

[313WX]

Good point. However I don't see much correlation between Greece and Detroit. And I'd venture that few, if any, of the armchair quarterbacks here have any real knowledge of what the Greek situation is all about.

I'm not about to stand up for any of the inept or corrupt politicians that contributed to manifesting Detroit's extremely complex problems but far too many people seem to be using the financial mess as an excuse for their thinly veiled racism and/or contempt for Detroit. Isn't it much easier to prescribe so-called 'tough love' for others than it is to experience it yourself?

That said, this Guardian article by John Holloway, addressing a much larger picture, is worth a look, could be a sobering glimpse into our future...

I completely agree with your second paragraph entirely. And you're also correct about the Greek default. It is apples and oranges to the situation here. However, the end results won't change when it's a matter of having to impose austerity measures.

Fact of the matter is, it's over for Detroit regardless of the ultimate way this all plays out.

Not only will services have to be cut, which will just acclerate the flight of the few taxpaying/home-owning residents left, but also revenues will have to be raised which means ending some of those tax credits in downtown/midtown [[which will significantly halt the development down there even more).

Right now, it's all just a matter of whether Detroit's death [[which it will pretty much die as is either way) will only destroy Detroit or will it drag down the region and the state in the process. No one in Lansing cares about helping Detroit or its people. If Michigan truly cared, it would have put development policies in place to ENCOURAGE growth IN Detroit over the last 40 years versus accelerate flight from it. The folks in th state only cares about what happens to the little suburbs they lvie in, because now they've suddenly become enlightened to the fact that "As Detroit goes, so does Michigan and the region."

[mam2009]

I don't necessarily agree that intervention will be the death of Detroit. The Governor has said that his idea for the Financial Advisory Board is patterned after the New York & Washington, DC emergency financial control boards. In both of those instances the finances were brought under control BUT also in both instances the state and/or federal government provided significant financial assistance.

I don't, however, believe that balanced budgets are going to cure what ails Detroit. No one is gonna want to live here if they don't feel safe, the streetlights still don't work, there's no clean park with equipment where their kids can play & where their kids will be undereducated at the public schools. Without significant corporate citizens, we will never have a sustainable tax base so the cycle will continue. The death of Detroit is the lack of corporate investment and the tax dollars that large corporations bring with them.

[313WX]

I don't necessarily agree that intervention will be the death of Detroit. The Governor has said that his idea for the Financial Advisory Board is patterned after the New York & Washington, DC emergency financial control boards. In both of those instances the finances were brought under control BUT also in both instances the state and/or federal government provided significant financial dmittance

The bolded is one of the key differences between what happened in NYC/DC and what's happening eithr.

Howevr, it's also quite silly to compare the financial crisis NYC and DC experienced to Detroit's. For starters, they are both VITAL cities to the US [[one is home to our federal government and the other is home to America's media and financial comglomerates, amongst other things), and the country will gladly bnd over backwards for cities who have that much impact on the health of the US.

Furthermore, neither city lost over 2/3 of their peak population even during their worst times, and they both maintained their middle class tax base [[in addition to the heavy investment they received from the Federal Government and the world's largest financial conglomerats).

Detroit has neither of these variables on its side [[just the hope that yuppies will "wade it out" for the sake of being involved in something "never seen before" or "deemed impossible"), and if anything, the problem Detroit faces now is that it's not spending ENOUGH money to service its citizens. Taking away the little money that's attempting to maintain the steadily crumbling bare bones we have now certainly won't make things better either.

[corktownyuppie]

The bolded is one of the key differences between what happened in NYC/DC and what's happening eithr.

This begs the question...if the feds or the state were willing to inject $500MM into the city's balance sheet...but in exchange, they wanted oversight over how the money was used, would you be in favor?

[internet_pseudopod]

This begs the question...if the feds or the state were willing to inject $500MM into the city's balance sheet...but in exchange, they wanted oversight over how the money was used, would you be in favor?

I think that is what most people are expecting. If you have the nerve to actually propose taking over what is essentially a bankrupt entity you have to put the money behind it. As it stands now, the current state of affairs appears as if Snyder wants to leave Bing and the council in place just to take the blame when things don't work out well. The governor knows that on one hand these takeovers in Detroit have a very poor track record but on the other hand the only people that tend to notice are "angry black activist" types and nobody important listens to them anyway. Putting money on the table makes people who would otherwise be degenerate gamblers and turns them into honest brokers because what they do with these state tax dollars has to work.

[stasu1213]

I think that Dave Bing is posteuring. He had known for a while that a consent agreement might be given to the city officials from Gov. Snyder. He is playing the "them against us" role. I don't trust his position. Detroiters should not trust the radio talk shows that he and council are interviewed on. A couple of these talk show host were being critical of the Mayor and Council a few weeks ago for federal money that were sent back to DC. Now they are playing the race card. I dont trust Snyder also.

[corktownyuppie]

Snyder isn't an idiot. And neither is Dillon. My bet is that they're going to quietly arrange for some mechanism to use their financial strength to act as guarantor for a bond issue, with the proceeds going toward some kind of Detroit rescue fund. This allows Detroit to come up with a cash injection without it technically being a loan from the state.

But...

There's no way in hell Lansing will allow Detroit to get those funds without oversight. No way. And Snyder's proposal -- while needing adjustments in the level of oversight, IMHO -- was a good one, allowing the state to control the money but keeping the current government intact as an advisory board to the 9-man committee.

Bing's proposal, essentially making his own authority usurp the 9-man committee is a non-starter. Whether you think it should be that way or not doesn't matter...it won't. We [[Detroit) do not hold the cards in the negotiation.

If I'm Lansing, I'll let the city continue to bicker over terms of the agreement. Then I'll wait until Detroit is 1 week away from running out of cash.

At that point, Snyder rolls out version 2.0 of his proposal. It will likely be a smidge less tilted in favor of state control. But by that point Detroit leaders will be desperate, running out of cash, and when given an opportunity to take a slightly better deal than the one they had...they'll take it.

For those of you who don't believe that cash crunch is real, believe it. We're already putting contractors on a delayed payment schedule...using that money in order to maintain cashflow. We can only rob Peter to pay Paul for so long....

[Zacha341]

Gov. Snyder on Why Detroit Should Accept Consent Agreement

http://www.myfoxdetroit.com/dpp/news...t-20120315-spb

[casscorridor]

The facts are on the table, so say Goodbye to City Lighting Dept, Water & Sewage Dept, Dept of Transportation, and so on.

Say hello to corporate control over the city.

We'd be stupid not to fight this. Those three departments are the main course for this corporate buffet.

Well the pigs have eaten enough, and it is time the people fight back!

There is no logical argument out of this pickle, only challenge to the logic of capitalism itself... logic that says there is no alternative.

[corktownyuppie]

We'd be stupid not to fight this. Those three departments are the main course for this corporate buffet.

Ok...but fight it how? At the end of the day, all those employees want to get paid, all our police and fire want to get paid, all our pensioners want to get paid, all our vendors want to get paid, all our banks want to get paid.

So if you say we fight this by not paying our banks. Then it also means the banks won't lend us any more money. Which means we're back to the first question.

I'm open to hearing a solution. I have not heard one yet. We fight this. But how do we fight this and make sure everyone gets paid what they're owed?

[rex]

In response to a post on the first page. How could less people make the city more sustainable? Less people = less taxes and less money from the govt. Detroit has become / is becoming a city that occupies a great deal of underpopulated space. Its expensive to service these areas. Great swaths of the city not only contribute little to nothing but will eventually cost a lot of money to completely take down and clean up. No plumbing and open to the elements for any amount of time = not worth fixing. See the ghost block thread.
I know you guys love Detroit. I honestly don't see Detroit being a great city again in my lifetime. I hate to say it. I really do.

In the here and now though. Vendors and contractors arent going to work for free. Employees wont agree to concessions. I can understand and appreciate their position. Its their livelihoods, their kids educations, their retirements and vacations and their futures. Its just they are on a sinking ship. No money=no money. Detroit a deeply entrenched bureaucracy designed so that no 1 entity has too much power I suppose. It has resulted in things not being taken care of for too long. City govt didn't shrink as fast as the population. I don't think the city can manage its problems. I don't think the state can fix Detroit's problems. The only way to not have Detroit problems is to not live in Detroit.

[Novine]

"The only way to not have Detroit problems is to not live in Detroit."

That's the delusions of some suburbanites. Detroit's failings cost all of us directly and indirectly even if we don't live in the city.

[mam2009]

http://www.myfoxdetroit.com/dpp/news...ip-20120316-ms

Its nice that the Council's and Mayor's staffs are working together to try to come up with a consent decree compromise, but the process is doomed to fail. The Mayor is going to want more power than either the Council or the State wants him to have while the Council will want more power than either the Mayor or the State want them to have. The time for coming together was the last three years at budget approval time. This Council tried for its two years since its term began to get the Mayor to live within a reasonable budget, but he talked about them so badly, calling them irresponsible & reckless. Now we really see who the irresponsible & reckless one was.

The Mayor has been slow to ACT to fix what ails Detroit. He has already admitted that finding the right staff has been difficult him. I was shocked to hear in the clip above that Detroit hasn't had a CFO in at least 6 months!!! The last CFO who was instrumental in getting the CAFR in on time two years in a row inexplicably left the Administration! Why?! If anyone knows why, please tell me because it LOOKS like those who work on the inside of the Mayor's Office are recognizing & fleeing serious dysfunction.

He'd rather eliminate Department of Human Services, a department that is 100% GRANT funded [[not a drain on the General Fund), than simply hire the right folks to put the right processes in place to manage it.

Why would the Governor trust our CEO, the Mayor, to right this ship when he has done so little to right it so far. The Mayor doesn't even make a good case for himself. I'd like to give him the benefit of the doubt and say that maybe probably he has done quite a bit internally to fix things that haven't YET manifested in service delivery improvements. Maybe he has been laying the foundation for Detroit's fiscal stabilization, but if he is, he's not telling that story.

I try to be as positive as possible when discussing my City's leadership but Mr. Bing's slow but steady management approach isn't what Detroit needs. This City needs a leader with an aggressive, swift and sure managment style, one who knows how to pull together and manage the right team of folks to run this City. Since time has essentially run out on Mayor Bing, I pray the Governor will send in the right team to not just focus on fixing our fiscal problems, but focus heavily and concurrently on improving the quality of life for those who have chosen to live, work & play here. And please do it quickly so we can get back to electing our own leadership again very soon.