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Detroit Financial Crisis Plan Still Under Wraps, Negotiations Ongoing

Detroit Financial Crisis

The Huffington Post   First Posted: 02/ 1/2012 2:30 pm Updated: 02/ 1/2012 2:48 pm

Detroit City Council and Mayor Dave Bing have yet to come to an agreement on how to address the city's budget deficit as the threat of a state takeover continues to loom.

Both Bing and the Council have been working since late November to come up with a deficit-elimination plan and a new budget for the city, after the mayor announced an audit found a $45 million cash shortfall.

Bing's plan emphasizes cuts to the city's workforce and changes to employee benefits. He had proposed Jan. 31 as a deadline to win massive health care and pension concessions from city unions, but that date passed without an agreement.

Union leaders told the Free Press that some bargaining units had reached tentative agreements with the city, but civilian workers want uniformed police and firefighters to agree to concessions as well. Any negotiated changes to city worker contracts would have to be voted on by the union membership.

Bing's press secretary, Naomi Patton, told HuffPost late Wednesday morning that a set deal between the city's and its unions had not yet been reached.

"They're still at the table; they're still talking," she said, adding that she did not expect any agreement by Wednesday afternoon.

Appearing on National Public Radio's "Tell Me More" on Tuesday, Bing said fixing the city's finances is "something that has to happen, otherwise you go out of business." The mayor defended his plan to pink slip 1,000 city workers and push for union concessions.

"There's a reality that's finally set in," he said.

But Bing reiterated his opposition to a state-appointed emergency manager for Detroit. Gov. Rick Snyder in late December appointed a financial review team to examine the city's finances and determine whether or not to recommend receivership for Detroit.

"We are a home rule city, and we as elected officials were elected by our population to manage the city," Bing said. "When you take that away ... a lot of people don't feel that that's the democratic process working as it should work."

Bing even briefly criticized for the performance of the emergency manager currently in charge of Detroit Public Schools.

"There are changes that are happening, they're moving slowly, but there's always a negative impact on people," he said.

Michigan Treasury spokesman Terry Stanton said talk of a "missed deadline" for a financial plan for Detroit was misleading as far as the state is concerned.

"It was Bing who said, 'I'll have it by the end of January,'" Stanton said. "I think it's important to note that's a self-imposed deadline, that was not a deadline imposed by the state."

At the first meeting of the financial review team appointed to examine Detroit's finances, Treasurer Andy Dillon did say the city should reach a deal with its labor unions by "early February."

Under state law, the review team has until March 9 to complete its work and make a recommendation to the governor, but the group may wrap the process up more quickly. A Dillon-led preliminary look at the city's finances used just half its allotted 30 days before the Treasurer requested a full review.

The state has pushed Bing and City Council to work quickly to come up with a budget plan. In a December interview with the Michigan Chronicle, Snyder said, "The clock is ticking."

Earlier this week, City Council continued its own discussions to arrive at a deficit-elimination plan to counter Bing's, which some members see as too optimistic.

Some members called for big funding cuts to the city's cultural institutions and recreational centers and privatization of some city programs and resources, including Emergency Medical Services.

The body could release a plan as early as Wednesday afternoon, WWJ reported.

But Coit Ford, senior policy adviser to Council Member Ken Cockrel, Jr., said he was unaware of a scheduled meeting where such a plan would be approved.

A spokeswoman for City Council President Charles Pugh did not return request for comment.

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