March 27, 2012 at 11:17 am

Detroit, state inching closer to financial deal

Snyder, city officials hopeful agreement can be reached by week's end

Gov. Snyder on Detroit financial agreement talks
Gov. Snyder on Detroit financial agreement talks: Gov. Rick Snyder speaks about working for the residents of Detroit.

Detroit— State officials on Monday said they hope to negotiate a consent agreement with Detroit within 10 days after a raucous review team meeting concluded with no plan in place.

The team, which was required by law to report to Gov. Rick Snyder on Monday, agreed only that a severe financial emergency exists in Detroit and that no consent agreement has been adopted.

The team sent a letter to Snyder indicating that negotiations toward a deal should continue, state Treasurer Andy Dillon said.

An unruly crowd repeatedly shouted down Dillon during the review team meeting as he attempted to explain the status of discussions over a proposed deal. Crowd members chanted, "No justice, no peace," and, "No takeover," and sang the civil rights anthem "We Shall Overcome."

Monday's action capped a whirlwind of a day that saw no real resolution for a city that's set to run out of cash by mid-May.

"This is the last day we have to act, so we're here today to address that," Dillon told the crowd. "We have a 10-day window … it is our hope that within this window, we can complete our discussions with the city … and come to an agreement."

Kirk Lewis, chief of staff for Detroit Mayor Dave Bing, and City Council President Charles Pugh released a joint statement late Monday acknowledging neither the city nor state wants an emergency manager. The city supports a financial stability agreement "to restore Detroit fiscally and preserve the democratic process," the statement said.

"Our goal is to have an agreement by the end of the week," the statement said.

Dillon said he believes both sides are "very close with respect to language." He praised the city for its progress in union concessions and other efforts to address its financial crisis. However, he said any deal would have to include a financial advisory board to ensure the city's proposed reform efforts are carried out.

As it stands, the governor would appoint four advisory board members, while the mayor and council would each get two appointments. The ninth member is agreed to by the mayor and governor and approved by council, Dillon said. The scope of the board's powers is still being debated, Dillon added.

The state has introduced, Dillon said, the concept of a project manager who will directly handle "the reform measures that need to take place."

It is unclear to whom this person will report. The plan would also include a chief financial officer, a position the city doesn't currently have.

Dillon said the review team would need to meet to go over changes to any agreement, which would then go to the City Council, mayor and governor for approval. The review team could meet again as soon as Thursday, Dillon said.

Emotions run high

The possibility of state intervention caused emotions to boil over during the review team meeting at the Cadillac Place in Detroit's New Center area. Activists continued to liken the state's moves to an attack on democracy and a violation of civil rights.

The review team was blasted by residents during a public comment period. Activist minister Malik Shabazz said black cities are under attack all around the state.

"We understand we have financial difficulties," Shabazz said. "Give us the help we want, need and deserve, not the help you want to impose on us. We don't want an emergency manager or a consent decree. This is white supremacy, and we will fight you.

"Before we let you take over our city, we will burn it down first."

Added Ed McNeil, chief negotiator for AFSCME Council 25: "We intend to keep it our city. We intend to work in our city and progressing for our city."

Earlier Monday, Snyder held a news conference saying the city and state are "two or three additional paragraphs" away from an agreement that could be considered a consent agreement. Such an agreement would allow some of the powers under Public Act 4's emergency manager law to be exercised by the mayor or some other executive branch officials.

"My goal is not to run the city of Detroit," Snyder said.

Snyder, who met Monday with six of the nine council members, said because the city didn't want to talk about a formal consent agreement, talks mostly have involved a deficit elimination plan for Detroit.

"I think they've made a lot progress on that agreement," he said. "I met with a number of people from the city (Monday), and what I'd say is that discussion continues. It's fairly far along. And what I'm encouraging them to do is at least enhance essentially the agreement that they're doing for the deficit elimination plan, which they're calling a financial stability agreement."

The governor said "times are very difficult in Detroit" and called on everyone to work together to get a deal done this week.

He said the city's finances need to be brought under control, basic services such as public safety and lighting need to be improved, and the city needs to grow again.

The bond rating downgrades that Detroit received last week show that "things are not going in a positive direction and that we need to do something. And I hope people take that as another hallmark to say action needs to happen — positive action."

"The discussions I had today led me to believe that people want to work together," Snyder said. "It wasn't about us vs. them. It's recognizing that the citizens of Detroit need better, basic services. They (residents) want more stability, and we need to grow the city."

Snyder also offered good wishes for Bing, who remains hospitalized with a perforated intestine, and said he sent the mayor flowers. Snyder said he hasn't spoken with the mayor, but Bing's chief of staff, Kirk Lewis, was seen leaving the governor's office shortly before his news conference.

Emergency appeal filed

Meanwhile Monday, community activist Robert Davis filed an emergency appeal with the Michigan Supreme Court to block Snyder and the review team from entering into a consent agreement with Detroit.

Davis' attorney, Andrew Paterson, said he expects to hear shortly from the court on whether the appeal will be considered.

If the Supreme Court agrees, it will consider whether the state Court of Appeals acted appropriately Friday by lifting an Ingham County Circuit Court injunction. The injunction prohibited a consent agreement until Judge William Collette can hold a contempt hearing Thursday to determine if Dillon and other members of the review team violated the state Open Meetings Act.

"I've been on the phone with (Supreme Court officials) all morning to arrange how we're going to expedite (an emergency injunction)," Davis said early Monday.

Collette has said he believes Dillon and other members of the Detroit financial review team may have violated the Open Meetings Act by holding secret negotiations in violation of an injunction he ordered in late February.

kbouffard@detnews.com

(517) 371-3660

Minister Malik Shabazz of Detroit shouts out his disapproval of the financial review team during its open meeting on Monday, saying, “Before we let you take over our city, we will burn it down first.” / Elizabeth Conley / The Detroit News
Andy Dillon listens to a speaker during the public comment portion of the ... (Elizabeth Conley / The Detroit News)