DETROIT

Detroit City Council Meets To Discuss Financial Crisis

11/21/2011 10:51 am ET | Updated Nov 28, 2011

The Detroit City Council continued discussions Monday on Mayor Bing's proposals to address the city's financial crisis.

The mayor announced Nov. 16 that the city will run out of cash if drastic measures aren't taken. The city faces a $45 million cash shortfall by the end of its fiscal year in June, and the state could appoint a financial manager to make sweeping changes.

Bing's administration has said Detroit has an accumulated deficit about $150 million in its $3.1 billion annual budget. On Friday, Bing proposed 1,000 initial layoffs with the possibility of more to come.

City Council members have been outspoken about Bing's plan, with several members saying the mayor's proposals do not go far enough to address Detroit's fiscal problems.

Several proposals came to light at Council's meetings last week. Council members discussed ways to raise revenue and suggested raising the Detroit city income tax to 3 percent for residents and 1.5 percent for non-residents.

Also on the chopping block were subsidies to the Detroit Zoo, Detroit Economic Growth Corp., Eastern Market, the Detroit Institute of Arts and the Charles H. Wright Museum of African American History, according to the Free Press, and 2,300 public sector jobs.

From increasing income taxes to laying off more than 500 police officers and firefighters, the Detroit City Council rolled out an ambitious -- and painful -- plan Monday that it hopes will save the city from insolvency and an emergency manager.

Several Council members reiterated Mayor Bing's call for the state of Michigan to pay $220 million owed to the city, and members also proposed collecting the $15 million in unpaid electricity bills owed by Detroit Public Schools. On Monday, DPS Emergency Manager Roy Roberts announced the district has made significant progress in reducing its own $327 million deficit to $89.3 million.

This is a developing story. Check back here for updates.

12/01/2011 11:34 AM EST

Council Members' Closing Remarks

President Pro Tem Gary Brown:

"If we could implement them all [the suggested measures] today, we'd probably have a billion dollars in suplus.

Now it's this body's responsibility to cerate a plan. There is no will by this body, I believe, to request an emergency manager. The mayor said he's not going to request one."

Member Brenda Jones:

"There are a lot of means that we can save money. There is a lot of money that's out there that this city has not collected.

We can only cut so much. We cannot cut ourselves out of a deficit. We need to find ways that we go out there and collect the money that's out in the city."

Member Andre Spivey:

"If the state wants the city to thrive, then come help us out."

Member Kwame Kenyatta:

"It has to go beyond the conversation. It has to go beyond the suggestions. I had a meeting with the mayor this morning, and I know he's meeting with unions this evening. I as well implored him to listen closely and to look at the bottom line.

He indicated that he is not supportive of the 2,300 layoffs [suggested by some Council members]. I'm not supportive of 2,300 layoffs.

A consent agreement is an agreement to allow the emergency manager in the house.

The next 24 hours is crucial. You need to stand at the ready. The next 24 hours will be very crucial for this city to speak, as the honorable Marcus Garvey said, with 'one aim, one purpose, one destiny, one voice.'"

Member JoAnn Watson:

"Some of us saw this coming. We have a lawsuit that's filed on our behalf. We have 28 plaintiffs around the state. Many people have worked to have petitions with thousands of signatures to repeal immediately this Public Act 4.

That's why this timetable has been called for this week by the governor.

The governor wants to take care of Detroit this week because he wants to act in front of signatures getting certified.

I urge the citizens to stand ready to come, assemble, organize."

Council Member Ken Cockrel, Jr.:

"It is not words that get things done, but actions."

Member Saunteel Jenkins did not attend the meeting Thursday, and President Charles Pugh and Member James Tate left early.

12/01/2011 11:15 AM EST

Clean Up Blight, Raise Revenue

Yolanda Langston spoke on the importance of cleaning up blight and holding homeowners accountable. In Detroit's case, many of those homeowners are banks that hold foreclosures.

"Banks should be held responsible for blight" on the foreclosed homes they own, Langston said.

She asked that a city ordinance that levied fines for blight violation "be revisited and increased."

And she asked that property management companies be held accountable.

"We have a billionaire, Matty Moroun, who owns a lot of properties that are blighted," she said. "It's not just about bringing dollars to the table -- we do need the dollars -- but we do need to hold these folks accountable."

12/01/2011 11:07 AM EST

Tax Assessors Say They Could Bring City Out Of Deficit

A representative of the Senior Accountants, Analysts and Appraisers Association spoke on many measures the city could take to collect further revenue that the city is already owed. She also noted the cuts in staff for tax investigators have left them unable to do the investigating and collecting work necessary to collect revenue.

"I haven't been in the field since 2006," Ms. Westly said.

She mentioned putting pressure on companies to accurately withhold their employees' income taxes. She mentioned that the association knows of dozens of companies that are not paying the proper amount of income tax withholding. She also said the city's sports teams may not be witholding players' income tax accurately.

Council Member James Tate moved for a line item that would get the council and the administration the names of those companies.

"If we were able to do our jobs the correct way, we probably could bring the city out of its deficit. That's how much money is left to be collected," Westly said.

12/01/2011 10:50 AM EST

Improve Housing, Alter Foreclosures To Raise Revenue

Dempsey Addison, president of the Association of Professional and Technical Employees, spoke on the need to restore and redevelop Detroit's housing stock. She says doing so would lead to revenue and "stimulate growth of small business and increase spending power of consumers."

"Everybody wins. Nobody loses."

12/01/2011 10:44 AM EST

Junetta Wynn: Blame The Contractors

Detroit Police Lieutenant and Sergeants Union President Junetta Wynn criticized the Council and administration looking to concessions from the unions rather than fixing city contracts.

"Not one lieutenant, sergeant, investigator or police officer has signed any contract sent out any bids or mismanaged any money," she said.

12/01/2011 10:23 AM EST

JoAnn Watson: Consent Agreement Is Slippery Slope

Member Watson had fiery words agains the consent agreement, which she said includes provisions that state a debt default would trigger an emergency manager anyway.

"You might be at the table for 30 seconds. It's giving away this city. We have no right to give away this city. If folks don't want to operate and run the city, let them leave."

12/01/2011 10:21 AM EST

Gary Brown: Public Act 4 Is The Law Of The Land

Pro Tem Gary Brown:

"I think that we could argue that if an emergency manager came in how broad those powers would be, but I think there's no argument that if an emergency manager came in, he would probably gut the collective bargaining agreements of all the unions in order to achieve the savings that are arguably needed."

Brown asked the unions where they stand on a consent agreement between the city and the state, which would allow the city administration broader powers without appointing an emergency manager.

Richard Mack says the unions stand against the consent agreement.

"Any effort for Lansing to come into our city, to our elected leaders, and say, 'We have a better way to do it,' is wrongheaded and it's unconstitutional.

"As far as consent agreement in particular: no. The problem with the consent agreement is even though it's not the full way is that there are no due process provisions allowed.

...

"It's essentially an emergency manager without going through the process of an emergency manager. So it's wrong."

12/01/2011 10:15 AM EST

Suggestions: Debt Service Restructuring, Improved Income Tax Collection

Richard Mack lawyer for Michigan AFSCME Council 25 says the state can help Detroit with revenue.

One method would be to refinance the $30 million annually in debt servicing that the city currently pays.

Another would be for the state to assist in income tax collection by allowing electronic collection.

"It's been written that the unions aren't interested in trying to save. The unions are interested. The unions have, if you look at what just happened, have been taking ocncessions. You talk about shared sacrifice? The only sharing that's been going on has been taking from city workers," Mack said. "It's easy to flip the switch to do the fulough day. It's not as easy to do some of these structural changes that should have been done in past two-and-a-half years Bing has been in office."

12/01/2011 10:05 AM EST

AFSCME Has Been Giving Concessions For 20 Years

Ed McNeil Michigan AFSCME Council 25 spoke on union concessions and other methods for the city to save money and raise revenue.

"This union since 1981 has been trying to help the city in one way or another giving concession," he said.

McNeil criticized the city's contracting methods that he said have drained money, not city employees.

"There could be 15 percent savings if each contractor gives back 15 percent to the city of Detroit."

He also noted that AFSCME Council 25 has put forward savings of $19 million city on prescription drugs for city workers.

"The union has been to the table," he added. "The union has brought ideas of cost savings year after year to this administration. It's time for this council, for this administration and the unions to sit down in one room. ... We can fill the rooms with individuals to make sure that we correct the problems that are happening in the city of Detroit."

12/01/2011 9:42 AM EST

Frank Hammer: Detroit Deserves What New Orleans Never Got

Frank Hammer, who represent UAW members and is president of the Green Acres Community Association. He likened Detroit to New Orleans after Hurricane Katrina, and urged Council to look to Washington and President Obama for help.

"It is time for the City Council here in Flint, in Benton Harbor, to amass a gathering to make a claim to say we're here to cash your check, Mr. Obama. You promised you would give us the same part of support that people in New Orleans deserved and never got under President Bush."

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