Wayne County Consent Agreement

As I mentioned before, it's highly likely that the bankruptcy of Detroit has provided the respective stakeholders some vivid examples of what bankruptcy would bring, and why a consent agreement is a better concept.

1. For the current employees, it's clear that the Executive can impose any conditions that he'd like. Basically, the Executive can do outside of bankruptcy what he could have done in bankruptcy--reject or modify collective bargaining agreements. Without this right under PA436, it's likely Wayne County would have filed bankruptcy, too.

2. With respect to retirees, I'm not sure how this plays out. Payments to WCERS are required under the budget. But I would guess there would be substantial reductions in health care, if they are not already imposed [[I think I had read that they were).

3. Other vendors should be prepared for some pain. The Executive can reject or modify contracts; that's always a risk when there is a contract with a sovereign. In this case, I would expect the County to cancel most third-party leases and either consolidate space or renegotiate terms. Suffice is to say that there are some dirty deals that might be unwound.

I think this process will be cleaner, only because it has been demonstrated to others that they will not like the alternative. Wayne County and other municipalities nationwide should be sending Detroit a thank-you card.

Here is the agreement, for anyone interested:

http://waynecounty.com/news/4054.htm