Commission adopts sweeping plan to revise Detroit City Charter

Christine Ferretti
The Detroit News

Correction: Detroit's deputy finance chief Tanya Stoudemire wrote in a memo to council that proposed charter  revisions would increase city spending by well over $800 million annually. The amount was incorrect in an earlier version.

Detroit — Charter Commissioners on Saturday adopted a sweeping set of proposed changes for Detroit's charter and voted to send its plan to state officials for review. 

The commission is seeking to enhance government transparency and accountability and improve transportation, water and housing access in the plan they hope to get before Detroit voters in the Aug. 3 primary. 

The vote comes days after the administration of Detroit Mayor Mike Duggan criticized the commission's charter revisions, arguing some were unlawful and others would be so costly they could force the post-bankruptcy city back into receivership. 

"We have a great document that hopefully the governor will approve and we will put it on the ballot for citizens to vote on," said Commission Chair Carol Weaver, noting some amendments made Saturday factored in comments made by the city's administration and Detroit's City Council.

“This process has included outreach to residents, community organizations, experts, and city officials — including the Mayor’s office, city council, and various entities within city government," she added in a statement.

Much of the feedback from the city, she said, came after a Feb. 12 deadline but it still was considered.

"We were open to their suggestions. Some of them we adopted and some of them we didn't," Weaver said. "I know it's been a little rocky, but the citizens have been with us."

The draft is the culmination of the Charter Commission's three-year effort to propose changes to the city's 2012 charter. Detroit voters in 2018 empanelled the nine-member commission to conduct the work.

The group's early efforts were contentious, with packed community meetings and feuding among commissioners over bylaws and meeting minutes. 

Detroit's deputy finance chief Tanya Stoudemire warned in a Monday memorandum to Detroit's council that the commission's revisions could spur an "imminent fiscal crisis" that would send the city $3.4 billion into debt within four years, trigger placement of an emergency manager and violate terms of the city's bankruptcy order.

John Roach, a spokesman for Duggan, said Saturday that the administration had not seen the changes and could not comment. 

The draft now is headed to Gov. Gretchen Whitmer and the office of Michigan Attorney General Dana Nessel for a 90-day review. If approved, revisions would go before voters in this summer's primary election. 

The City Charter operates within the framework of the U.S. Constitution and Michigan Constitution, defining how city government is structured, its powers and responsibilities.

"If the governor (or attorney general's office) responds with an issue to anything, we will have the time to revisit those issues for reconsideration," noted Detroit Charter Commission Vice Chair Nicole Small.

The charter commission is expected to vote on a final draft of any revisions on June 8.

Small countered earlier this week that the administration's criticisms were a vague, last-minute "bullying tactic" to derail proposed changes to the charter. 

"We took a lot of time to look at all of these proposals and to try to come up with the best decisions to improve access to government for the public and to also make sure your voice was heard," she said during Saturday's Zoom meeting. 

During public comment Saturday, resident and activist Tawana Petty and a number of other advocacy group representatives thanked the commission for its effort to "bring equity back" to Detroit with affordable housing, transit and water, immigrant rights and proposed public safety changes. 

"Every human being deserves true quality of life and your historic efforts will enshrine these rights in the city's constitution," Petty said. "Please stand strong. The people will support you in seeing this through."

Jai Singletary, who has served as a resident services manager for Councilwoman Raquel Castaneda-Lopez, noted there's been "a lot of turbulence and pushback" but "we do commend you for staying strong."

Stoudemire wrote in her memo to council that the revisions, which call for additional elected city commissions, economic development policy changes and modifying city contracting procedures, would increase city spending by well over $800 million annually.

At the same time, Stoudemire claimed the revisions would result in revenue losses from the creation of a free fare system for buses, new water-rate system requirements and revised median income calculations that would cost Detroit federal block grant dollars. 

Detroit Charter Commissioner Denzel McCampbell stressed during Saturday's meeting that the commission has proposed a low-income fare plan. It isn't seeking free fare as asserted. 

The charter proposal, Stoudemire contended, does not comply with state budgeting rules or municipal finance laws and it would expose the post-bankrupt city to litigation and financial risks.

Weaver contends the city's budgetary assumptions are "inexplicable," and that the commission researched each proposal to account for financial implications. She urged city officials to join the commission's March 9 meeting. 

“This process is not over, as we await feedback from Lansing, we are certainly open to hearing further from the city of Detroit as well as residents about what is contained within this document," she said.

In 2014, Detroit exited the largest municipal bankruptcy in U.S. history with a deal that allowed the city to shed $7 billion in debt, restructure another $3 billion and direct $1.7 billion into service improvements.

The city, through a funding package coined the "grand bargain," was able to shield the city's arts collection from creditors in bankruptcy and soften cuts to retiree pensions.

The debt-cutting plan relieved the city from much of its pension payments through 2023. In 2024, Detroit will have to start funding a substantial portion of those obligations from its general fund for the General Retirement System and Police and Fire Retirement System.

Duggan, during an unrelated news conference in recent days, claimed there's been no effort by the commission to price out its ideas and if Detroit landed back in bankruptcy the charter plan would pose a "dire threat" to retiree pensions.

Since bankruptcy, the city has posted consecutive balanced budgets and was released from strict state oversight. But the COVID-19 pandemic resulted in more than $410 million in virus-induced shortfalls that prompted cuts and budget revisions.

Detroit City Council's Legislative Policy Division has also weighed in on the charter proposal. In a Feb. 15 memorandum, LPD concluded most of the recommendations have merit, but they aren't appropriate, are “inordinately expensive to accomplish, and, unless major revenue streams suddenly emerge, could hinder efficient government.”

Among the proposals, the commission wants the city's top lawyer to be elected, rather than remain a mayoral appointee, and is seeking the addition of two elected boards: a panel of fire commissioners and election commissioners. 

Other amendments range from requiring contractors to provide detailed reports on hiring and wages as well as special incentives for longtime Detroit businesses in contracting, and measures to address housing affordability.

Charter commissioners on Saturday spent three hours presenting tweaks to the plan, including changes to sections dealing with election procedures and voter education efforts. It also clarified residency requirements for its proposed fire and election commissions. Language also was clarified, with support from the commission's legal counsel, to ensure legal compliance on certain proposals.

Previously, the commission recommended a five-year cap on certain tax abatements. In revisions adopted Saturday, the panel instead called for a review every five years of compliance with tax abatement agreements and associated benefits to the community. 

Weaver urged attendees of the Saturday meeting to help inform the public of the proposals.

"This is your charter and we're going to need all hands on deck to get this passed," she said.