State to Detroit: Drop consent suit or lose funds...

[Zacha341]

Detroit- The state today warned Detroit that it will withhold state revenue-sharing payments to the city unless a lawsuit challenging the consent agreement is dropped.

The money would instead be diverted to repay $80 million in interim bond financing that the state provided Detroit under the agreement, state officials said in a letter to the city today.

"The failure to withdraw this suit will have a cascading effect for the city," deputy State Treasurer Thomas F. Saxton wrote to Detroit's new chief financial officer, Jack Martin.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz1xC0N2Xyi

[mam2009]

The state is finally showing itself very publicly as a bully that is extorting the City by threatening to withhold money that the City is just as entitled to as all other Michigan cities. The Corporation Counsel is doing what she is REQUIRED by law to do. So now the Governor & Treasurer want her [[an attorney who is ethically bound to follow the law) to break the law. The only person allowed to break the law is an EM, so the Governor & the Treasurer need to stop being coy and just say what they really want. Cities are government entities. They are not businesses where u can very simply get rid of leadership you don't like whenever you like. There are specific laws in place to protect the concept of government by the people. Circumventing that process does and should require due process of the law. That frustrates the Governor.

[SWMAP]

What? Are you trying to suggest that she is a freedom fighter ? KRYSTAl [[like the champagne?) is an undistinguished lawyer who was promoted when her boss lost her job. She has a THEORY that she devloped at Joann Watson's direction to find some cover for gumming up the agreement. She is going to TEST her theory during the last days of Detroit's ability to pay employees. Maybe she will prevail - but likely not as hardly anyone finds her theory tenable.
Meanwhile Detroit loses- not by bully tactics- by deadlines and financial year-end verities.

[Meddle]

They are not businesses where u can very simply get rid of leadership you don't like whenever you like.

Every other word in your post is spelled out, but you drop the 'yo' from 'you'?


If the State can eliminate the Clowncil and get the city back on track sans corruption and mis-spending, I say go for it. Full speed ahead.

[corktownyuppie]

The state is finally showing itself very publicly as a bully that is extorting the City by threatening to withhold money that the City is just as entitled to as all other Michigan cities. The Corporation Counsel is doing what she is REQUIRED by law to do. So now the Governor & Treasurer want her [[an attorney who is ethically bound to follow the law) to break the law. The only person allowed to break the law is an EM, so the Governor & the Treasurer need to stop being coy and just say what they really want. Cities are government entities. They are not businesses where u can very simply get rid of leadership you don't like whenever you like. There are specific laws in place to protect the concept of government by the people. Circumventing that process does and should require due process of the law. That frustrates the Governor.

You've got to be kidding. The state was willing to step in and guarantee bonds that allowed the city access to cash when they were running out. This was only agreed to because the city entered the consent agreement. You don't want the consent agreement? Then the STATE WON'T LOAN YOU ANY MORE MONEY.

This has nothing to democracy. I'm sure Lansing would be THRILLED if the City said, we are suing you to void the consent agreement. We've also fixed our books so that we don't need you to co-sign our loans anymore.

[corktownyuppie]

p.s. Why are people confusing their entitlement to democracy with entitlement to money? I'm entitled to vote. That doesn't mean that I'm entitled to make you give me money whenever I want you to.

[RO_Resident]

The state is finally showing itself very publicly as a bully that is extorting the City by threatening to withhold money that the City is just as entitled to as all other Michigan cities.

In my opinion, this is why I think the city will not prevail in a lawsuit. Okay, the state owes the city $xx million for a water bill and parking tickets. Because of the debt, the consent agreement is illegal.

What would stop the state from saying fine, "I guess I can't disburse $xx millions for roads, $xx millions in state aid, $xx million in grants, etc. Oh, and I'll check into the legality of pass through dollars, too. You know, the inability to enter into a contract, and all that. Don't worry, the money will go into a 0% interest escrow account as this is being settled."

[cman710]

This story is currently the headline on the Drudge Report, with Slumpy making a reappearance:

[drjeff]

Leave it to the geniuses on city council to rearrange the deck chairs on the Titanic.

[mwilbert]

Here's the situation.

The state holds all the cards, including money.
The city can hold its breath until it turns blue.

I think the state wins. I think that the state is in the right, but it wouldn't matter if it weren't.

[dmike76]

mam2009, Detroit wouldn't be in this spot if it wasn't for decades of mismanagement and lack of leadership. Instead of getting mad at the state and accusing them of being bullies when they're trying to help Detroit's incompetence, get mad at the idiots like JoAnn Watson who not only helped in screwing up the city, but is pretending to care about the people to further her political agenda. She is just fine with the status quo because change threatens her power.Get mad at all the people that came into this city and used it as their personal ATM. Crittendon is the same way and I agree that she's probably working with Watson behind the scenes. It's this old train of thought that also helped put Detroit in this mess. I applaud the other members of City Council that voted for the consent agreement. They all have screwed up in the past, but this is one thing that they got right [[so far anyway).

[313WX]

3 questions...

1. The revenue sharing claim aside, why doesn't the state just be the bigger perso nand pay the city its measely 1.6 million dollars so we can move on with the Consent Agreement? It has a $300+ million dollar surplus of cash right now, that $1.6 million dollars will be a drop in the bucket if it means shoving all of this legal mess out the way.

2. Why doesn't Snyder also simply declare the Consent Agreement null and void and then appoint an EFM? That way, both parties agreed to toss the agreement and we won't have any more problems when it comes to addressing the city's finances.

And to answer RO-Resident's question...

3. Why doesn't the state simply say "Ok, Detroit's only opton at this point is bankruptcy." Otherwise, if the state doesn't distribute those funds, that WILL be the only option.

This petty suburbs/state and city tit-for-tat gets us nowhere if Detroit is truly in the financial dire straits everyone claims. Put your fucking pride aside on both sides and get the job done. If one side wants to act like the children they are, you don't stoop to their level and say "Well, if you're going to do that, we're going to take this away." Adults come up with a reasonable solution to nip the core problem in the bud instead.

It's also sickening that everyone, in their knee-jerk reactions, are placing all the blame on the city. Snyder knew this would happen when he came up with HIS idea for a Consent Agreement.

[Gistok]

I think that in the greater scheme of things... politics is not at work here... but the financial realities. After all the State Treasurer is Andy Dillion, former DEMOCRATIC Speaker of the State House... so to have him side with the Governor on this in a way shows that this is not "us vs. them"... but "us vs. us"....

[jjgnc]

Detroit can not, and will not, recover to it's pre-recession era. The Big 3 will not return to their former glory. The days of money steamrolling into Detroit are over. High union salaries and their expensive benefits are half the reason places like Detroit are economic wastelands. The formerly bustling city of Detroit is now inhabited by the factory-worker descendants who have become welfare dependents. They cannot afford to pay the retirement benefits of their predecessors and maintain the same standard of living. Those who are left working cannot uphold the weight of those who are already retired and enjoying life. What will happen eventually is those retirees will have to concede to a reduction or elimination of retirement benefits, because the companies paying them cannot afford them. The outpouring of funds into unions coffers, salaries, social programs, and other items will ground to a halt. Those who remain will have to learn to live at a lower standard of living.

This is the reality: Detroit is only the beginning. It's the most obvious, most visible slide. The rest of the country is next. The sooner people admit this...the sooner they can reconcile the new reality and move forward, teaching themselves and their children prudence, saving, responsibility, and especially...SELF RELIANCE.

[Wesley Mouch]

What? Are you trying to suggest that she is a freedom fighter ? KRYSTAl [[like the champagne?) is an undistinguished lawyer who was promoted when her boss lost her job. She has a THEORY that she devloped at Joann Watson's direction to find some cover for gumming up the agreement. She is going to TEST her theory during the last days of Detroit's ability to pay employees. Maybe she will prevail - but likely not as hardly anyone finds her theory tenable.
Meanwhile Detroit loses- not by bully tactics- by deadlines and financial year-end verities.

Filing this in Ingham County tells you all you need to know. If the law department felt compelled to file -- they could have done so locally. They sought a judge who would likely help stall this process. This is just politics by law.

Bankrupcy Yes! Let's clean up everything once and for all! Union contracts. Mayor's Office contracts. Pensions. Everything!

[Wesley Mouch]

p.s. Why are people confusing their entitlement to democracy with entitlement to money? I'm entitled to vote. That doesn't mean that I'm entitled to make you give me money whenever I want you to.

Hear, hear.

[Hypestyles]

... so when is this suit due to be formally heard by a judge? and in the meanwhile, what kind of disruption in city services would take place while this is being debated in court?

[professorscott]

... so when is this suit due to be formally heard by a judge? and in the meanwhile, what kind of disruption in city services would take place while this is being debated in court?

Whatever disruption the Emergency Manager decides upon, because the City running out of money voids the consent agreement and in that case the Governor appoints an EM as provided for in the law.

[townonenorth]

You really have to wonder whether this action is being done deliberately in order to force a EM on the people of Detroit. I can't imagine why someone would want that, but if it's Joann pulling the strings, perhaps she wants to forment some sort of protest. You know, revolutionary stuff, just like the old days.

Probably bypassing that step and plowing immediately into bankruptcy court would be a better option. Less drama there.

[jjgnc]

You really have to wonder whether this action is being done deliberately in order to force a EM on the people of Detroit. I can't imagine why someone would want that, but if it's Joann pulling the strings, perhaps she wants to forment some sort of protest. You know, revolutionary stuff, just like the old days.

Probably bypassing that step and plowing immediately into bankruptcy court would be a better option. Less drama there.

People are just not seeing the big picture. They are debating about little details like who will run EM and ignoring the elephant in the room. The city of Detroit is completely devastated and the State is sinking, too. So we have two broken entities trying to shift costs, burdens, and blame to the other party. It's too late for blame. Unfortunately, the solution is for the people who live in Detroit to move to rural areas, or other States, as the infrastructure in Detroit is crumbling. This will reduce costs for those who are left in the city and leave room for future growth as recovery occurs.

[Wesley Mouch]

You really have to wonder whether this action is being done deliberately in order to force a EM on the people of Detroit. I can't imagine why someone would want that, but if it's Joann pulling the strings, perhaps she wants to forment some sort of protest. You know, revolutionary stuff, just like the old days.

Probably bypassing that step and plowing immediately into bankruptcy court would be a better option. Less drama there.

This mystifies me as well. Maybe because it defies logic.

I don't think they have a 'plan', except to resist everything being imposed by 'the man'.

Say no to outsiders, and you have more control.

Money will run out, you say? No -- we'll find another sucker to fund us, another golf course to sell secretly, another loan to take out that doesn't require approval.

That's our plan. No plan.

[evergreen]

This mystifies me as well. Maybe because it defies logic.

I don't think they have a 'plan', except to resist everything being imposed by 'the man'.

Say no to outsiders, and you have more control.

Money will run out, you say? No -- we'll find another sucker to fund us, another golf course to sell secretly, another loan to take out that doesn't require approval.

That's our plan. No plan.

That's a pretty good summation of the plan. Keep throwing stuff against the wall and hope that something sticks. They just got something more to throw against the wall, since it now appears Public Act 4 will be on the ballot in November; thereby staying implementation of the act. Even this ruling is ambiguous and confusing.

Get out the popcorn and pink lemonade as no one knows where this circus will go. Only residents, employees and retirees will suffer.

[townonenorth]

People are just not seeing the big picture. They are debating about little details like who will run EM and ignoring the elephant in the room. The city of Detroit is completely devastated and the State is sinking, too. So we have two broken entities trying to shift costs, burdens, and blame to the other party. It's too late for blame. Unfortunately, the solution is for the people who live in Detroit to move to rural areas, or other States, as the infrastructure in Detroit is crumbling. This will reduce costs for those who are left in the city and leave room for future growth as recovery occurs.

I fully expect the city to be in default by next weekend, with the bankruptcy judge asked for by an emergency manager named by the PRIOR EM law in charge of the city finances the next day. Only way out of this morass.

[mwilbert]

It would be very interesting if an EM actually would ask for a bankruptcy judge to intervene. Since it seems as if the state doesn't want Detroit to go into bankruptcy, I assume that they wouldn't appoint someone inclined in that direction, but people don't always do what you would expect.

[Zacha341]

Detroit will be broke next week if lawsuit isn't dropped, mayor says

http://www.freep.com/article/2012060...ped-mayor-says