In preparation for a possible $30 million cash shortfall, Detroit Mayor Dave Bing said Wednesday the City would implement unpaid furloughs for workers beginning Jan. 1, 2013 as well as "other cost-saving measures."
The furlough announcement comes after City Council's Tuesday's vote against law firm Miller Canfield's contract, which Bing hired to advise on the City's financial agreement. The vote meant the City failed to meet a term in Bing's Milestone Agreement with Michigan Treasurer Andy Dillon, and $10 million of funds held in escrow by the state expected to be released to the city were not.
“Due to the failure to meet the first milestone in our agreement with the State -- and with the second milestone now at risk -- I have directed my Administration to begin planning to offset an anticipated $30 million cash shortfall," he said. "These actions are necessary to keep the City from falling into further financial distress."Bing added that revenue-generating departments and public safety would not be affected by the cuts.