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Detroit Consent Agreement Approved By City Council

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DETROIT CONSENT AGREEMENT
This AP file photo shows Michigan Gov. Rick Snyder and Detroit Mayor Dave Bing shaking hands on Snyder's inauguration in 2011. Both leaders will be party to a new financial agreement between the city and the state. Detroit City Council voted to enter into a consent agreement with the state of Michigan on Wednesday, April 4, 2012. | AP

Detroit City Council on Wednesday voted 5-4 to enter into an agreement with the state of Michigan that will radically alter the structure of the city's government. Proponents said the agreement will help the struggling city's finances and pay off its longterm debts, but opponents said the measure was forced on Detroit by the state and undermines local democracy.

The agreement allows city officials to retain their powers, but puts city operations and budgeting in the hands of a nine-member financial advisory board, chief financial officer and program management director. It also abrogates the city's duty to bargain with its public employees.

Deputy Mayor Kirk Lewis signed the consent agreement document on behalf of Mayor Dave Bing, who is back in the hospital following an earlier surgery. The financial review team voted 7-0, with three members absent, to approve the consent agreement Wednesday afternoon. It now goes to Gov. Rick Snyder.

"The council has acted responsibly to put Detroit on the path to financial stability," Snyder said in a statement. "Approval of the consent agreement is a positive opportunity for the city and our entire state."

The agreement takes effect immediately, and has teeth that will allow the state to ensure its implementation. The governor and state treasurer will appoint members to the financial advisory board, and the city must meet monthly budget requirements or face further state takeover.

Snyder said the other option to fix Detroit's finances was appointing an emergency manager -- a state-appointed official who would have the power to overrule elected officials, sell public assets and break city contracts.

Detroit was on track to run out of cash next month and faces a $270 million projected deficit for this fiscal year. The agreement brings $137 million in a bond package to help the city's short-term cash problem but does not include any other direct financial assistance from the state.

The state legislature would have to approve any direct financial appropriations for Detroit, and it also would have to approve some of the reforms suggested under the agreement. Both houses of Michigan's legislature are controlled by Republicans, who in March refused to loan the city money without a longterm plan in place.

"I think they can be convinced," Council President Charles Pugh said after the vote. "The next budget is critical."

"Now the work begins," said Council President Pro Tem Gary Brown. "There's a skeleton but now meat has to be put around the bones. Now it's time to implement."

Four members of City Council who voted against the agreement were less optimistic.

"There are those who will try to pretend the consent agreement will be good for the city even though there is no cash infusion on the table," said JoAnn Watson during the meeting. "Clearly there's a viable option ... Stand up and demand that the governor pay what he owes. Don't give up the legacy of this city and those whose shoulders we stand on and act as if we have no options."

City leaders maintain the state owes Detroit $220 million dollars under a past revenue-sharing agreement and many hoped the money would be included in the consent agreement.

Members of the public, clergy and city unions vocally opposed the agreement Wednesday, urging city council not to "sell out" Detroit.

Wanda Akilah Redmond, member of the Detroit School Board, said the agreement was as much a state takeover as an emergency manager would be. "I'm asking this body not to vote us into slavery," she said. "If you do this, all your authority will be taken away from you."

Cecily McClellan of the Association of Professional and Technical Employees questioned the legal advice the city council received. "Having Attorney [Michael] McGee, one of the authors of Public Act 4, the dictator law, advising the city on this agreement is like having the Grand Wizard of the Ku Klux Klan to advise the NAACP," she said.

Michigan's Public Act 4 allows for the governor to appoint emergency managers to cash-strapped municipalities and also provides the framework for much of the consent agreement. It is the subject of a repeal effort, and the secretary of state may soon certify enough signatures to suspend the law until a referendum in November. Detroit's consent agreement is specifically designed to outlast any challenges to Public Act 4.

Even with the agreement in place, Detroit is a long way from recovery.

"Will it somehow miraculously lower insurance rates? Will the 90,000 foreclosures in this city be overturned? Will the 90,000 vacant lots and vacant homes automatically be redeveloped?" asked Rev. David Bullock, president of Rainbow PUSH Michigan and a proponent of the drive to repeal Michigan's emergency manager law.

He cautioned the city council against believing the agreement will fix Detroit's myriad problems. "We have some systemic problems here that are not addressed by this at all," he said. "We cannot stop the hemorrhaging and claim victory without a transfusion and rehab."

UPDATE: 8:12 p.m. -- This story was updated to reflect the Detroit City Council's vote Wednesday night on the consent agreement.

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