Huffpost Detroit

Detroit Consent Agreement: City Council Reviews Mayor-Backed Draft Financial Stability Agreement

Posted: Updated:
Detroit Mayor Dave Bing, standing in front of the city council, lays out his plans and highlights accomplishments in his third State of the City address in Detroit, Wednesday, March 7, 2012. (AP Photo/Carlos Osorio)
Detroit Mayor Dave Bing, standing in front of the city council, lays out his plans and highlights accomplishments in his third State of the City address in Detroit, Wednesday, March 7, 2012. (AP Photo/Carlos Osorio)

Detroit City Council is set to convene a special session Thursday to review a financial stability agreement between the city and the state.

(SCROLL DOWN FOR UPDATES)

Staff for Council and Mayor Dave Bing have been working with state officials to draft the proposal.

"It won't get fixed overnight, but our partnership with the State will drive us as we remedy our financial crisis," Bing said in a statement. The mayor is currently recovering from emergency intestine surgery at Henry Ford Hospital.

According to the mayor's statement, the proposal would create a financial advisory board, with some appointees from the state, as well as a Project Implementation Office and Project Manager. The city would be required to adopt a three-year budget.

The statement from Bing's office also noted the agreement would "[preserve] Charter and Executive and Legislative powers, including allowing the Mayor to hire his own executive staff" and secure commitments from the state for legislative support on improving key services and collecting city taxes.

According to the Detroit News, which obtained a copy of the document, it also calls for specific labor agreement provisions that union leaders are already calling "union-busting"

The agreement, obtained by The Detroit News, calls for a contract to be built off a single template for all unions, including police and fire. It would call for:

-- New hires to pay into 401(k) accounts instead of pensions.

-- Promotions based on merit, not seniority.

-- Restricting bumping rights, no striking and no blocking privatization.

Sources have told The News that the state's ability to restructure union contracts is key to any agreement.

City Council will begin meeting at 4:10 p.m. to discuss the document. Stick with HuffPost Detroit for updates.

live blog

Oldest Newest

"There's no assistance," Council Member Brenda Jones said, referring to the lack of funds from the state in the draft agreement.

"Clearly to me as I read and have read this document, it's not a partnership," she said. "It's a power grab and it's a takeover."

Share this:

The consent agreement removes Detroit's duty to bargain under the Public Employee Relations Act, meaning it could do away with contracts and collective bargaining for city employees -- perhaps indefinitely.

"Pursuant to Public Act 4, 30 days after the effective date, the city is not subject to PERA for remaining term of the agreement."

The term of the agreement is murky and fixed to the city's general fund balance and credit rating. Detroit can only get out of the agreement if it shows three straight years of a positive general fund balance or two straight years of a Triple-B or higher credit rating.

Share this:

Council Member James Tate pressed Deputy Mayor Kirk Lewis on the amount of work required of the executive branch under the agreement.

"If you don't do your part, we all fall down," Tate said.

"I think we can pull this off," Lewis replied. "What we've gone through in last few weeks showed we can work together to come up with something."

Share this:

Under the consent agreement, the governor retains his right to appoint an emergency manager under Public Act 4.

The document would also hold in the event Public Act 4 is repealed (a petition drive for a referendum on the act could be successful before the end of April).

"A consent agreement would be terrible because it's a contract that would outlive any repeal of PA4," said JoAnn Watson. "How awful it would be for the city to sign something this week and then they repeal PA4 next week? Because the signed agreement stands."

Share this:

Council Member Andre Spivey says a vote on the document is unlikely Friday or even Monday. He, too, wants the state to offer cash for Detroit, as well as more details on its offered technical assistance.

"Skin in the game to me is not just money," he said, "but getting your hands dirty as well."

Share this:

Council Member Saunteel Jenkins also lamented the lack of money coming from the state under the agreement.

"Nothing in this document says or does anything to keep us from not making payroll at some point because there is no infusion of resources," she said. "If the state wants us to enter into this agreement, we need something on the table."

Share this:

City Council's Research & Analysis Director David Whitaker noted the document puts many requirements in place for Detroit to balance its budget and also provide services, but does not fund its mandates.

"Given the fact the state hasn't come forward with that [money], this document is really going to require quite a bit of cuts in services and expectations."

Share this:

Deputy Mayor Kirk Lewis said his office isn't entirely satisfied with the draft document but wanted to bring City Council into the discussion.

"I dont think it's perfect," Lewis said, "but we've moved it down the road enough that now is the appropriate time to have the discussion here at the table about what's in this document."

Share this:

Rev. Jesse Jackson is speaking before City Council discusses the draft financial stability agreement.

He pushed for Detroit to insist on tangible resources and assets, not just cuts and restructuring.

"The idea of a remedy without resources does not stand to reason," he said.

Jackson compared Detroit's situation to the federal bailouts of the banking and auto industries.

"We didn't give them new management, we gave them new capital," he said.

Detroit, he added, needs "emergency reconstruction, rebuilding reinvestment" and "the resources to go with it."

Share this:

Around the Web

Detroit City Council to consider consent agreement with state today

Appeals court clears way for Detroit consent agreement

Will Detroit consent agreement get done today? 'I have no idea' says ...

Bing's hospitalization won't halt efforts to reach consent agreement

Detroit City Council calls special session to consider financial stability ...