Detroit passes consent agreement, avoids emergency manager
theGRIO REPORT - After weeks of legal wrangling, contentious meetings, and delays, the Detroit City Council narrowly passed a consent agreement with the state of Michigan to overhaul the beleaguered city's finances on Wednesday evening...
DETROIT – After weeks of legal wrangling, contentious meetings, and delays, the Detroit City Council narrowly passed a consent agreement with the state of Michigan to overhaul the beleaguered city’s finances on Wednesday evening. The measure, which had already been approved by Detroit Mayor Dave Bing and Gov. Rick Snyder, passed by a 5 to 4 vote in front of an angry group of city residents.
“I will sleep well tonight because I know that my vote was based on what was in the best interests of this city,” said councilwoman Saunteel Jenkins. “We had two options, a consent agreement or an emergency manager. This city is on track to run out of cash and I felt it was in the best interests of the more than 700,000 people who live here to work with the state to resolve this financial issue.”
Along with Jenkins, voting yes were councilmen Charles Pugh, Gary Brown, Kenneth Cockrel Jr., and James Tate. The no votes belonged to Andre Spivey, JoAnn Watson, Kwame Kenyatta and Brenda Jones.
“The council has acted responsibly to put Detroit on the path to financial stability,” Gov. Snyder said in a statement. “Approval of the consent agreement is a positive opportunity for the city and our entire state. We all want Detroit to succeed. This agreement paves the way for a good-faith partnership that will restore the fiscal integrity taxpayers expect and ensure the delivery of services that families deserve.”
The vote came just hours before today’s deadline for appointing an emergency financial manager. Under the consent agreement, the mayor and council will retain power, but in a lessened capacity.
Snyder would appoint a nine-member financial advisory board while the mayor and the city council would advise and review all fiscal matters. Snyder would appoint three members, state treasurer Andy Dillon would appoint one, the mayor would appoint two, and the City Council would appoint two.
“This has like a rollercoaster,” council president Charles Pugh said. “My goal all along was that we get back to fiscal stability and we avoid emergency management. My vote today was to avoid emergency management and to get this city back to fiscal stability.”
The city is currently mired in a nearly $200 million deficit — which grows by nearly $400,000 per day — and was facing the possibility of running out of money by the end of this month. The city had three options for fiscal survival: emergency management, a consent agreement, or bankruptcy.
“Bankruptcy would not be like a General Motors bankruptcy,” Councilman Gary Brown said. “It would be a seven or eight-year process and we would be paying lawyers millions of dollars, but most importantly, once our vendors find out that the city doesn’t have to pay them, then banks would cut their lines of credit and that would only exacerbate the unemployment in the city of Detroit.”
Brown also added that the city currently has just $20 million on hand and needs at least $60 million to make payroll for the month, saying the city has not “been paying contractors and vendors for months.”
The open meetings by the council and state appointed review board had turned into volatile spectacles with groups of angry residents disrupting the state board meetings last week, including one resident saying that before the city agreed to any state aid, he would “burn it to the ground.”
During Monday’s city council meeting, residents opposed to the agreement compared it to “enslavement”, “Hitler’s fascism”, and a “dictatorship.” Community activist Malik Shabazz said Wednesday that any council member who voted for the agreement was either “too stupid, (mentally challenged), or traitorous for the people to allow you to stay in office.”
Detroit resident Valerie Burris called on residents to not pay their water bills, parking tickets and property taxes because doing so would “support Detroit’s demise.” Of note, Detroit currently has $173 million in delinquent property taxes. She added: “If we have to dig a well, let’s dig our wells.”
Councilman James Tate felt that the agreement was the least damaging option. “There are no guarantees that the agreement will be successful,” he said. “The only sure thing in this process is that if there was no consent agreement in place by April 5, by law, the governor is free to appoint an emergency manager, who has free reign over all decisions regarding city assets.”
After the agreement passed, the crowd responded with cries of “you’ve sold us into slavery” and “you’ll be the first to hang from the tree” directed toward the five members who voted yes. They were also showered with numerous racial epithets from the nearly all African-American crowd that struck a few council members as especially harsh.
“I’m human,” said Jenkins, who is in her first term on the council.
“When your integrity is questioned, when you’re called names, in spite of the fact that we’ve been here day in and day out reading these documents and trying to have all of the information, and doing what I believe is in the best interest of the city, of course (the taunts) bother me.”
When asked if the crowd’s anger made her nervous, Jenkins acknowledged that she was. “I know this is the most important vote I’ll make on this council, and I believe that it’s the most important vote in the history of this city.”
Another pressing issue for is the health of Mayor Dave Bing. He was readmitted to Henry Ford Hospital on Wednesday after experiencing what his staff is calling “discomfort.” Bing, 68, had been recovering from surgery on March 24 to repair a perforated colon.
“The Detroit City Council’s vote tonight represents a pivotal moment in Detroit’s history,” said Deputy Mayor Kirk Lewis, who has been acting as mayor while Bing has recovered. “It is time now to begin the monumental task of stabilizing Detroit’s financial operations, which is and has always been the mission of Mayor Bing and his administration.”
The next step is for Snyder to officially sign off on the deal, and the official financial review team will be appointed. After the financial review board’s vote early on Wednesday, Dillon said he believes Detroit can recover but it could take years.
“What we learned during the process is that we had a broken city financially but also operationally,” Dillon said. “It’s going to take a long time. The city didn’t get in here overnight. It’s going to take a while to get it back on her feet.”
Follow Jay Scott Smith on Twitter at @JayScottSmith
