04/04/2012 03:36 pm ET Updated Apr 04, 2012

Detroit Consent Agreement: City Council Vote On Financial Deal Comes Down To Wire

UPDATE: Wednesday 4:30 p.m. -- The state-appointed financial review team for the city of Detroit voted to approve a consent agreement for the city at a meeting Wednesday afternoon. All seven present team members voted to approve the agreement. Three team members were absent.



Detroit City Council President Charles Pugh says he wants the council to vote on a consent agreement Wednesday so that Michigan Gov. Rick Snyder doesn't appoint an emergency manager to run the city on Thursday.

The consent agreement is one option the governor has as he weighs a March report that Detroit is in a financial emergency. The city could run out of cash to meet payroll next month and faces a $270 million projected deficit. Snyder said the other option is appointing an emergency manager -- a state-appointed official who would have the power to overrule elected officials, sell public assets and break city contracts.

Mayor Dave Bing and some city council members want to avoid an emergency manager, and Snyder has pushed for the city to adopt a consent agreement to enhance state oversight of city operations and create a deficit-elimination plan.

The most recent draft of the agreement would create a nine-member financial advisory board with power to approve budgets and contracts, and instate a chief financial officer and a project management director with final say on spending and city operations. Bing and Deputy Mayor Kirk Lewis are pushing for city council to approve the agreement.

"We need to get this behind us and move forward," Lewis told reporters after meeting with the mayor Wednesday. Lewis is acting for Bing as the mayor recovers from intestine surgery.

The consent agreement must be approved by a state-appointed financial review team assigned to Detroit, the city council, the mayor and the governor.

Lewis was confident he could get five city council members to approve. "I think they're there to pass this, so we can move forward and get back to really running the city," he said.

Challenges to the proposed consent agreement are in and out of court. On Wednesday, a state appellate judge overturned an earlier ruling preventing Detroit's financial review team from meeting. The team met Wednesday to decide whether to sign the consent agreement.

Meanwhile, a federal judge is is considering a lawsuit from city unions, who claim the consent agreement breaches their good-faith bargaining over new, concession-heavy city contracts. The unions want Judge Arthur Tarnow to block the consent agreement and push the city council to ratify their new contracts, but he delayed his decision until next week.

If signed, the consent agreement would likely face further court challenges. An opinion from the city law department found the deal might violate Detroit's city charter.

"Although the city may enter into the proposed agreement, the city council should be cognizant of the potential legal challenges that may arise," corporation counsel Krystal Crittendon wrote.

During a Tuesday meeting, four council members said they do not support the consent agreement; Kwame Kenyatta and JoAnn Watson called any vote for it illegal. Brenda Jones and Andre Spivey also oppose it. "It won't be in there, the stuff I want," Spivey said. "I know my vote."

He continued to add feedback to the document, however, saying, "I don't agree with this, but if it passes I want to make sure I can live with it."

Pugh, Ken Cockrel Jr., and James Tate met with state Treasury and Bing administration officials to draft the latest version of the agreement. Pugh said Tuesday he wasn't happy with the result because it didn't include direct cash assistance from the state, but he preferred it to an emergency manager.

"I don't want to take the risk and then we go into an emergency manager or Chapter 9 bankruptcy," he told reporters following the meeting. "Whatever we need to do, I'm willing to do."

Tate posted a cryptic message on his Facebook page Wednesday morning, but seemed likely to support the deal. Council President Pro Tem Gary Brown also backs the plan.

Saunteel Jenkins remains the swing vote. In recent days, she's echoed her colleagues' calls for money from the state, but hasn't indicated whether the lack of cash will push her to vote "no" on the plan.

The council planned a special session for 5 p.m. Wednesday, shortly after the Detroit review team's scheduled meeting, but a final decision isn't guaranteed. If council delays or rejects the agreement, Snyder has indicated he will move forward with the appointment of an emergency manager Thursday.

This is a developing story. Check back here for updates.

04/04/2012 6:52 PM EDT

Council Approves Consent Agreement 5-4

City Council adopted the resolution to approve the consent agreement in a 5-4 vote.

Roll call vote below:

Jenkins: Yes with statement

Jones: "Hell no"

Kenyatta: no

Pugh: Yes

Spivey: No with statement

Tate: Yes with statement

Watson: No

Brown: Yes with statement

Cockrel: Yes with statement

04/04/2012 6:48 PM EDT

Kirk Lewis Executed Consent Agreement On Behalf Of Bing

The final draft of the consent agreement is ready to go and waiting for Council's signature.

Deputy Mayor Kirk Lewis said he signed the document, and the Detroit Review Team has signed it as well.

"We agree with it and I have executed on behalf of Mayor Bing a copy of that agreement along with the review team," Lewis said.

04/04/2012 6:40 PM EDT

Corporation Counsel Hasn't Seen Latest Draft

Corporation Counsel Krystal Crittendon, the city's lawyer, said she hasn't seen the lastest version of the consent agreement approved by the Detroit review team.

JoAnn Watson said if the document now functions under Public Act 7 and therefore must be subject to a public hearing. She asked for a legal opinion.

"Because state is not a local unit of government, that provision would be inapplicable to this agreement," Crittendon said.

04/04/2012 6:05 PM EDT

Randy Lane, CPA: 'Don't Give Up Power, Make Them Take It'

Randy Lane, a Detroit certified public accountant, said the Council misunderstands the city's finances and cash-flow situation.

"You look at that analysis and in the first 7 months you're cash positive. It didn't get into a deficit until you look at the projections."

Lane urged the Council to take more time to consider the city's finances.

"I implore upon you to take some time, step back from this, take your right and what the people elected you to do and demand that you have access to cash flow and other information suggesting you will run out of cash. Thus far all you have heard are scare tactics. Don't give up power, make them take it."

04/04/2012 5:58 PM EDT

Cecily McClellan Has Harsh Words For Council

Cecily McClellan of the Association of Professional and Technical Employees (APTE) questioned the legal advice City Council had received on the consent agreement.

"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.

04/04/2012 5:35 PM EDT

Malik Shabazz: 'My Heart Aches'

Minister Malik Shabazz speaks at public comment.

"I would like to note the anniversary of the assassination of Dr. King, fighting for city workers rights.

"I hope that you all will fight for city workers' rights and the rights of the people.

"I pray for full and speedy recovery for our mayor, however any mayor and any council person that would willingly sign away our hard-fought power, rights and gains is either too stupid, too ignorant, too retarded or too traitorous for the people to allow to remain in office.

"It is obvious that we have compeltely forgotten our history. ...

We've forgottn about Coleman Young, Erma Henderson, Dr. King and Malcolm X.

"My heart aches. My heart really is aching. I think just about everybody in the room can feel what's about to happen. This deal is already done.

"It is a disgrace and it is an outrage. In signing this, you are forever changing the city of Detroit. I pray that God will forgive you all. It's ceratinly going to be hard for the people to forgive you."

04/04/2012 5:26 PM EDT

Should There Be Public Review?

@ HoodResearch :

How can #Detroit City Council vote on something they won't let the people see?

04/04/2012 5:26 PM EDT

Agreement Is NOT Structured Under Public Act 4

According to revisions made to the document and distributed to the media, the financial stability agreement is no longer premised on Public Act 4.

"The City and Treasury Department intend that this Agreement be construed as an agreemetn between the City and the Treasury Department authorized under Act 7," the Urban Cooperation Act.

That means the document would stand if Public Act 4 were suspended or repealed. Clauses in the agreement still rely on PA4, but could be cut without ending the entire agreement.

04/04/2012 5:22 PM EDT

Saunteel Jenkins Seems To Favor Agreement

Saunteel Jenkins, who some regard as the swing vote on the Council, now seems to support it in comments made at the table.

Responding to the Council for Baptist Pastors' statement, she said:

"This is a very complicated issue and much of that was captured in your comments. I, too, believe that once you read the document you'll see that what you state was true.

"It's good to have people come to microphone and speak about the complexities and speak about what's true instead of perpetuating the rhetoric and untruths that have been perpetuated at the microphone and at this table."

04/04/2012 5:19 PM EDT

Brenda Jones Gives Her Copy Of Consent Agreement To Owens

After debate over whether the Council of Baptist Pastors could support a consent agreement if they also stand opposed to Public Act 4, Council Member Brenda Jones passed her own copy of the document to Rev. Owens.

"This is a consent agreement under Public Act 4," Jones said.

Gary Brown took the ministers' speech as support for the agreement, thanking the pastors for their "courage" to come before the Council and support the agreement.