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Detroit Financial Review Team Finds Financial Stress, No Consent Agreement Reached

Posted: 03/26/2012 5:07 pm Updated: 03/26/2012 7:15 pm

Detroit Financial Review Team
The Detroit financial review team met Monday, March 26, 2012. They determined the city was under "severe financial distress."

Faced with shouts and interruptions from the assembled audience, Detroit's state-appointed financial review team struggled through its fourth public meeting Monday afternoon.

The crowd of around 100 people heckled the review team members, calling some out by name, and shouted, "No state takeover" and "Where's our money?"

After several minutes, a clearly frustrated Andy Dillon, Michigan's treasurer, decided to conduct the meeting despite the noise. "I'm just going to go on, and if no one can hear, that's your fault," he said.

Dillon's admonition did little to silence the crowd, which broke into a chorus of "We Shall Overcome," the civil rights anthem.

Detroit faces a budget deficit of $200 million and could run out of cash in May. Gov. Rick Snyder appointed the review team under Public Act 4, Michigan's emergency manager law, to examine the city's finances and recommend a course of action for the state. The review team found Detroit in a state of "severe financial stress" and under the law must either come up with a consent agreement or recommend Snyder appoint an emergency manager.

The crowd opposes any kind of state takeover, fearing the loss of elected representation and accountability; cuts to city services; and further layoffs and cuts for city workers.

On Monday, review team members discussed what Dillon said was the third draft of a possible consent agreement between the state, and Detroit's mayor and city council. The agreement, allowed under Public Act 4, would include a deficit elimination plan and grant the mayor and a proposed financial advisory board broader powers to carry out such a plan.

In a press conference Monday morning, Snyder appeared optimistic that the review team would reach an agreement, but it became clear some review team members were not on the same page.

Conrad Mallett Jr. had heated words with Frederick Headen before the meeting. Mallett is a former chief operating officer for the city of Detroit, and Headen is the director of the state treasury department's Local Government Services Bureau.

"I want them to know there is a written alternative," Mallett said. "My name is not on this, I have nothing to do with it."

Dillon stressed the document under consideration was merely a draft, "drafted by one person for the purposes of discussion today."

Shirley Stancato, president of non-profit New Detroit, also objected to putting her name on the document. "This body did not deliberate as a body," she said. "I could not make a recommendation about any course of action. If part of this includes that 'we recommend,' I can't agree with that."

Audience members continued to taunt review team members, and one man was threatened with ejection by security. An imposed two-minute limit per person during the public comment period didn't stop speakers from continuing to shout after their microphones were cut off.

The Rev. Dr. Tellis Chapman, president of the Baptist Convention of Michigan, lectured the review team members. "Make sure it is said that you protected democracy," he said. "I recommend, I challenge, I charge each and every one of you to resign from this nonsense and take your report to the governor and tell him, 'Hell no.' This is a threat to democracy. The people's voice is being threatened."

Dempsey Addison, president of the city's Association of Professional and Technical Employees union, said her members were opposed to both a consent agreement and an emergency manager. "We have a mayor who refused to entertain ways to generate revenue and we have a governor who refused to assist us," she said. "But we have the wherewithal and the knowledge to get it done. You guys have another agenda that is not for the people of Detroit."

Dillon said the state and the city would continue to work toward an agreement over the next 10 days, the window in which the governor must decide whether to appoint an emergency manager for Detroit. "The governor assured me today he does not want an emergency," Dillon said. "Nor do I, nor does the city."

Deputy Mayor Kirk Lewis and City Council President Charles Pugh issued a joint statement following the review team's decision, saying they would continue to work to come to a "financial stability agreement" and deficit-elimination plan:

"Neither the Mayor nor the majority of the Council is in favor of a consent agreement. However, we are making significant progress with the State to develop a Financial Stability Agreement to restore Detroit fiscally and preserve the democratic process."

But the state looks poised to push for a full consent agreement, with certain provisions required under Public Act 4. Snyder indicated Monday he thought the financial stability plan could be adapted to fit a consent agreement's parameters.

Detroiters in the audience at the review team meeting, however, saw little difference among the presented options.

Valerie Glenn, one of the most vocal crowd members and a Detroit native and resident, said none of the proposed options made sense to her. "It's a no-win situation," she said. "There's no good side. They're not allowing us to negotiate a solution that works on behalf of anyone."

Watch protesters sing "We Shall Overcome" at Detroit's financial review team meeting:

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