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

**Meddle** · June-11-12, 06:52 AM

In the past, people on this board have mentioned that at least some of the Clowns have [[or had) drivers and/or bodyguards. Is that still true? Even if they don't, other city officials still do, correct?

If so, notice the news articles today about the US Secretary of Commerce who was involved in a couple of accidents yesterday. Aside form that point, he was driving himself, with no security. If a top US Government official doesn't need a driver, why on earth would a Detroit city official need one?

This is just one of many places money is wasted and savings could start tomorrow.

**mam2009** · June-11-12, 07:08 AM

Originally Posted by corktownyuppie

I disagree with your notion there being no quid pro quo, although I recognize it's not formal or legal. But let's put that aside for a second.

You raise a very interesting point. If the state wrote the $150MM check in order to allow the City Council agreement to stay in place, then inevitably that $150MM would be subject to the oversight of the financial advisory board. Meaning that the $150MM could be used to finance the capital restructuring necessary.

If I could be assured that the $150MM would never be spent by the City Council and only spent by the Financial Advisory Board's authority, I could back this.

Hm.

My apologies. After thinking about this further, I dont think paying the money would AUTOMATICALLY clear the default and make the agreement legal. But perhaps the State and City could work that out. The State was very effective at using extortion the first time around so I'm sure they won't have a problem with a second go at it.

**Novine** · June-11-12, 08:06 AM

"No, my answer is that you are NOT the judge assigned to adjudicate this matter. I believe that a valid legal question has been raised and that the State may owe the City a little money. If the State paid the money, the legal question would become moot and the consent agreement would still be in place!"

A valid legal question? A question that, until this past week, has never been raised by the same people who have signed off on agreements with the state in the years since the revenue sharing deal expired or the state failed to pay some bills? A question that would affect every municipality in the state that saw their revenue sharing dollars cut by the state but not one other municipal lawyer in the state thought to raise? That's your bar for a "valid legal question". Please tell us your not a lawyer for the city.

**townonenorth** · June-11-12, 08:45 AM

Watching the meeting today, nothing can be done. There's one of Watson's posse standing up there singing to the council.

**townonenorth** · June-11-12, 09:46 AM

Here's a well reasoned explanation by Stephen Henderson on this whole subject.

http://www.freep.com/article/2012061...ould-back-down

**Danny** · June-11-12, 11:15 AM

Dave Bing on the unecessary consent agreement lawsuit to Detroit Bankruptcy.

I am continuing to work with the city council to put this financial woes behind us. My city attorney has violated my chain of command and he will be dealt with. One way or another Detroit will be not be bankrupt by the end of the week."

**Danny** · June-11-12, 11:16 AM

Plantation politics are still kicking in at the Detroit City Government.

**townonenorth** · June-11-12, 11:20 AM

Originally Posted by Danny

Dave Bing on the unecessary consent agreement lawsuit to Detroit Bankruptcy.

I am continuing to work with the city council to put this financial woes behind us. My city attorney has violated my chain of command and he will be dealt with. One way or another Detroit will be not be bankrupt by the end of the week."

It's a she, not a he. And yes, they will.

**Novine** · June-11-12, 11:32 AM

I'm still waiting for someone from the city to produce the agreement that they had with the state that guarantees them that state revenue sharing. Why can't anyone from the city law department produce the agreement?

**mam2009** · June-11-12, 12:50 PM

Originally Posted by Novine

I'm still waiting for someone from the city to produce the agreement that they had with the state that guarantees them that state revenue sharing. Why can't anyone from the city law department produce the agreement?

This is the "agreement" -- State Law and the State Constitution. See below.

GLENN STEIL STATE REVENUE SHARING ACT OF 1971 [[EXCERPT)
Act 140 of 1971

141.912 Payments to cities, villages, and townships from sales tax collections; time and basis.

Sec. 12.

4) For state fiscal years after the 2002-2003 state fiscal year, the department shall cause to be paid to each city, village, and township its share of the sales tax collections designated for assistance to cities, villages, and townships under section 10 of article IX of the state constitution of 1963 from the sales tax. Payments under this subsection shall be made during each October, December, February, April, June, and August, based on collections from the sales tax at a rate of 4% in the 2-month period ending the prior August 31, October 31, December 31, February 28, April 30, and June 30. The payments under this subsection shall be made from revenues collected during the state fiscal year in which the payments are made.

**EASTSIDE CAT 67-83** · June-11-12, 12:51 PM

[QUOTE=Tig3rzhark;324442]

"Maybe we do need a third party to come in to put an end to the war between Detroit and the rest of the State.

cooperate fully, for once."

Nice thought Tig..zark...but who in the city voter base would ever vote for a third party? As I see it Detroit is a Democratic institution for the foreseeable future.

**Novine** · June-11-12, 01:45 PM

"This is the "agreement" -- State Law and the State Constitution. See below."

That's not an agreement. It's a state law. A law that can and has been changed by the state legislature without any need to consult with any community affected by it. A law that affects every municipality in the state but you now claim that Detroit alone is able to discern a legal case for suing the state that no other community in the state has seen. The state legislature could wipe out statutory revenue sharing completely and there's not one legal leg for any community to stand on to sue the state over that action.

An agreement is a signed legal contract between two bodies that's enforceable in court. You haven't produced an agreement because none exists.

**Wesley Mouch** · June-11-12, 02:06 PM

Originally Posted by mam2009

The only thing the State gave in exchange for the City signing the consent agreement was the assurance that an EM would not be assigned to the City within 10 days of the day that the consent agreement was signed. At the risk of sounding like a broken record, that sounds like extortion to me especially when you consider that the bond deal was ALREADY in place prior to the consent agreement. There is no legal connection between the consent agreement & the bond deal.

Did the state say they'd break the cities legs if they didn't sign?

Its not extortion to negotiate deals.

By your definition, every single contract ever signed by anyone is extortion.

You discuss. You agree. You compromise. If you come from a weak position, you don't get to call the shots. Its not extortion. Its just negotiation.

Let's take some of the rhetoric out of this if we can.

**mam2009** · June-11-12, 02:08 PM

Originally Posted by Novine

"This is the "agreement" -- State Law and the State Constitution. See below."

That's not an agreement. It's a state law. A law that can and has been changed by the state legislature without any need to consult with any community affected by it. A law that affects every municipality in the state but you now claim that Detroit alone is able to discern a legal case for suing the state that no other community in the state has seen. The state legislature could wipe out statutory revenue sharing completely and there's not one legal leg for any community to stand on to sue the state over that action.

An agreement is a signed legal contract between two bodies that's enforceable in court. You haven't produced an agreement because none exists.

Time out! I think I misunderstood your request. I was still focused on the State refusing to provide the 2012 revenue sharing so that the City can remain solvent for the last three weeks of this fiscal year [[as it ends on June 30). Earlier on this thread, someone hinted that Detroit was not "entitled" to its 2012 revenue sharing.

You sound like you are referencing the $225+ million that the current State Treasurer acknowledged in public was owed to the City, but that he had no intention of attempting to right the wrong that was created when the State held the City to its part of the deal even though the State did not keeps its part of the deal. In that case, my cut and paste from the State Revenue Sharing Act is not at all applicable. Sorry for the misunderstanding.

Time in!

**iheartthed** · June-11-12, 02:09 PM

Originally Posted by Novine

A valid legal question? A question that, until this past week, has never been raised by the same people who have signed off on agreements with the state in the years since the revenue sharing deal expired or the state failed to pay some bills?

The new city charter, which took effect last year, grants the city's law department new authority that it didn't have before:

Crittendon, in a letter to colleagues in the city’s law department, said she argued against changing Detroit’s city charter last year to give too broad independence to the position of corporation counsel, or lead city attorney.

Despite her misgivings, the city’s charter revision commission granted the law department a new level of autonomy from the mayor’s office, largely with former Mayor Kwame Kilpatrick’s misuse of his authority while allegations of corruption were investigated in mind.

Crittendon said she told the charter commission she “did not believe it was necessary because attorneys are already bound by the Michigan Rules of Professional Conduct and that this provision would only cause dissension between the corporation counsel and one or both branches of city government. The charter commission insisted that one of the main reasons the City Council and the residents of Detroit wanted the charter revised was to give the corporation counsel the responsibility to enforce the charter and the independence to [[sic) freely do so.”

That prediction, revealed in a letter Crittendon sent to her staff Sunday and obtained today by the Free Press, has come true in dire fashion. Even though, as Crittendon wrote in her letter, “I did not believe that I would be the corporation counsel to have to invoke these provisions. Little did I know that this would not be the case.”

http://www.freep.com/article/2012061...text|FRONTPAGE

**townonenorth** · June-11-12, 02:17 PM

The applicable acts and analysis from that time [[1998) for the 224 million are below. Feel free to discuss.

I think that the city did not follow through with the income tax cuts, did they?

http://www.legislature.mi.gov/docume...HLA-5391-B.pdf

Edit: They reduced the rate according to this:

http://www.crcmich.org/column/?p=207

**mam2009** · June-11-12, 02:18 PM

Originally Posted by Wesley Mouch

Did the state say they'd break the cities legs if they didn't sign?

Its not extortion to negotiate deals.

By your definition, every single contract ever signed by anyone is extortion.

You discuss. You agree. You compromise. If you come from a weak position, you don't get to call the shots. Its not extortion. Its just negotiation.

Let's take some of the rhetoric out of this if we can.

I would argue that the threat of appointment of an emergency manager is equivalent to a threat to break your legs if the other party doesn't allow you enough time to fully consult with your attorney to discern the wisdom of the agreement. The Council did agree to this under duress. I don't believe that my use of the term "extortion" is rhetoric in this case. I really don't.

And to top it off, the State is using the same tactic now to try to persuade the Corporation Counsel to break the law by dropping her pursuit of a legal opinion in a court of law which she is legally obligated to do. These have been ultimatums, not real negotiations in the classic sense, in my humble opinion.

**corktownyuppie** · June-11-12, 02:27 PM

[QUOTE=mam2009;324653 These have been ultimatums, not real negotiations in the classic sense, in my humble opinion.[/QUOTE]

You are right about this, and I think it's because the City leaders or the citizens [[or both) don't really believe that they need the State's help. And that changes the tenor of the discussion altogether...it leads our people to believe that we are negotiating from the position of strength.

I, of course, disagree with this position and believe it's based on failure to really understand the consequences.

Whether or not the city will actually "run out" of money on Friday remains to be seen. And, frankly, even if the bond issue for $80MM sails through, we will simply end up back in this exact situation at some point in the future. The very near future.

The reality is that Detroit is not in a position to negotiate. But perhaps the only way we will realize that is when we actually actually run out.

Running out of money provides a much needed clarity and focus to this discussion. I'll tell you, once the city runs out of money for people to get paid, then the people who need that money -- many of whom are Detroit citizens themselves -- will eventually care less about who signed what document and more about who is going to make sure they can pay for groceries this week.

**townonenorth** · June-11-12, 02:33 PM

I see that the city didn't make but 2 of the 3 criteria for a stoppage of the decrease in the income tax. There needs to be a legislative fix to avoid a 8.5 million dollar revenue drop. Perhaps in order to facilitate the deal, the city should propose that the Legislature do what has been past practice and freeze the rate for this year, in return for the settlement of the parking tickets, and the water bill owed?

http://www.crcmich.org/column/?p=207

**Meddle** · June-11-12, 02:36 PM

mam2009, you wouldn't happen to be Joann Watson or one of her staff, would you?

**professorscott** · June-11-12, 02:36 PM

All of this nonsense about whether the consent agreement is legal, whether the state does or does not owe money, is all a flailing in the wind, meaningless and deceptive.

The City does not know how to live within its means and does not want to live within its means, and is just stalling as hard as it can to delay the inevitable. Within a very short time I expect to see an emergency manager and/or a municipal bankruptcy. And if the City leadership thinks it's losing control now, wait until that hurricane hits the beaches.

It's a shame, this lack of accepting reality. And as I said a few weeks ago, what difference does this $200+ million really make? If the State gave that money to the City, which is exactly as likely as it is I will jump out of the window, flap my arms and fly, then in a few months the money will have been squandered and the City will be exactly where it is today, but with one less thing to whine about.

**Richard** · June-11-12, 02:54 PM

Maybe the state has those funds, if any, set aside,then after the EFM is done they will say great job getting your house in order and here is a bit of cash to get you started again.

You do realize that while everybody is distracted by this the Gov is pushing the bridge through with no voter or legislator approval needed.

**Wesley Mouch** · June-11-12, 02:54 PM

Originally Posted by mam2009

... The Council did agree to this under duress. I don't believe that my use of the term "extortion" is rhetoric in this case. I really don't.

And to top it off, the State is using the same tactic now to try to persuade the Corporation Counsel to break the law by dropping her pursuit of a legal opinion in a court of law which she is legally obligated to do. These have been ultimatums, not real negotiations in the classic sense, in my humble opinion.

Duress? Whose actions created the urgency? More rhetoric.

The State moves quickly to stave off a problem, and get criticized for 'extortion' and making the city decide things 'under duress'.

Bankruptcy for ya all. Slice real, slice deep.

**townonenorth** · June-11-12, 03:03 PM

Funny that there's been a focus on Charter violations. Corporation counsel is in violation of the Charter right now. Pot, meet kettle.

http://www.detcharter.com/phaseII/ac...yInsurance.php

Also the City Council is in direct violation of the Charter as well. Start at insurance and work your way down...

http://www.detcharter.com/phaseII/action/index.php

**mam2009** · June-11-12, 03:05 PM

Originally Posted by townonenorth

The applicable acts and analysis from that time [[1998) for the 224 million are below. Feel free to discuss.

I think that the city did not follow through with the income tax cuts, did they?

http://www.legislature.mi.gov/docume...HLA-5391-B.pdf

Edit: They reduced the rate according to this:

http://www.crcmich.org/column/?p=207

From the CRC report: Therefore, unless state law is amended, the municipal income tax rates for residents and nonresidents will fall from 2.5% to 2.4% and from 1.25% to 1.2%, respectively, in July 2012.The rate reduction will be the first of its kind since 2003.This will cost Detroitabout $8.5 million in lost revenue on a full-year basis if the rates are not frozen at 2011 levels through a statutory intervention [[similar to what occurred in 2008 and 2009).

And guess what? I'm told the State has indicated its willingness to allow Detroit to freeze its tax rate [[the rate rollback would mean lost revenue for a City in a cash crisis) ONLY IF the City supports pending legislation in Lansing [[HB 5705) that would allow for a portion of the utility tax [[which, by State law, is currently only to be used to pay for Police) to be used to pay back bonds that would be floated by the proposed Public Lighting Authority [[HB 5688) for system upgrades.

If this is true [[& I've got it on good authority that it is), why wouldn't the tax rollback legislation [[SB 970) just be a given since we are a city in a cash crisis? Why does that even have to be a subject of negotiations? For some idea of the truth of that statement go to the Michigan Legisture website and do a search for those bills. You'll notice that the Public Lighting Authority bill was introduced on May 29, 2012 and passed by the House less than two weeks later, while Senate Bill 970 regarding the income tax rollback was introduced in February 2012 and hasn't even been analyzed or heard in Committee yet.

I hope some of you can see how it is that the City could be concerned that the State has a funny way of showing how much it wants to help Detroit. I'm not saying the Governor doesn't want to help Detroit, but he is certainly making the creation of an amicable partnership challenging.