As city’s financial woes grow, so does tension between Detroit and Lansing

Lead artIn two separate exclusive interviews, Michigan Governor Rick Snyder and Detroit Mayor Dave Bing sat down with Michigan Chronicle editor Bankole Thompson to talk about Detroit’s financial crisis and how  both men view the proposal to avert  a cataclysmic financial problem. 

Snyder talked about the creation of a Financial Advisory Board to manage the finances of Detroit. He said if Detroit can’t agree on the Consent Agreement as the city runs out of cash soon, an emergency manager is a very likely option. Bing said a consent agreement must be structured so that Detroiters can keep running their city, and that the restructuring should be a collaborative effort between the city and the state with Detroit maintaining its “core authority.” 


Mayor Bing:
Don’t take Detroit’s governing power  

Mayor Bingg_webMICHIGAN CHRONICLE: Where is the plan to address the financial crisis? 

DAVE BING: There is a plan that was delivered to Lansing in October. It’s been sitting there. I haven’t gotten feedback whether or not the plan is going to be accepted or rejected, or whether there needs to be some changes in the plan. We can’t move forward until Lansing comes to the table and say we accept or reject the plan. Or say here are the changes we recommend. Our plan is kind of predicated on the savings we would get from labor. We’ve done all the heavy lifting. And every month we go without action costs us $10 million. So I want the state to move one way or another because we are kind of handcuffed. What I’d like to do we can’t do because the unions are not ready to ratify until they 

know what the state is going to do.  

MC: Do you support the consent agreement that Gov Snyder said would create a Financial Review Board for Detroit?

DB: We’re not opposed to a consent agreement and will support the process. We’ve been in ongoing discussions with the governor regarding the consent agreement.

MC: The governor said he’s been trying to work for months with your administration but couldn’t get the cooperation he needed. True?

DB: That is not true. We have been trying to get definitive answers and tangible support since the financial review process began.

MC: Is making joint appointments with the governor, as well as City Council, under this proposal balanced?

DB: We don’t agree, because under the proposal we received from Gov. Snyder the governor and the state have more votes on the board than representatives from the mayor or the City Council, giving the state ultimate control.

MC: The governor said not ratifying this agreement could trigger an emergency manager. What is your reaction?

DB: The governor has always had the power to appoint an emergency manager. However, we would like to think the terms of a consent agreement can be negotiated to avoid the appointment of an emergency manager.

MC: Some of the council members have criticized you as not going far enough in your agreement to reduce the city’s deficit. What do you have to say?  

DB: Then I would like for them to come to the table with recommendations. I think they like to manage from 30,000 feet. I think they have very little detail, they don’t come up with any other recommendations. They wait for us to put all of this stuff together and then try to see how to punch holes in it as opposed to trying to work together. We’ve got a couple of council members, in my opinion, who are just media whores. 

MC: Are you suggesting that some members of the council are exploiting this climate for political gain? 

MB: Absolutely. I’m very appreciative of those council members who don’t run to the press with everything. You can’t negotiate in the media. So when you try to build trust, that’s been a problem here because as we share information with council members, the next thing we know it’s in the press. Sometimes that hurts us in negotiations. 

MC: What about these federal grants that are flying in the face of all these financial issues the city is facing? How can we be sending more back to Washington? 

MB: Once again, in one case that has happened, and that was in the weatherization money, about 9.2 million dollars. There are reasons for that. Some of it was prior administration from a timing standpoint. We didn’t have enough time, information to be knowledgeable of what needs to be done. When you look at Human Services they are under investigation and we’ve made some changes from a leadership standpoint. 

MC: What in concrete terms would a restructuring of city government mean alongside a financial reform? 

MB: The first thing is the lighting department. We will still own and control the lighting department but we don’t have the money to do the necessary investment. So we talked to the state, DTE and we are going to work together, raise the money to fix the lighting department. 

MC: Is there targeted deadline for that? 

MB: I’m hoping that in 30 days we’ll have an agreement. The time frame in fixing the system is going to be two to three years because you have to do it citywide. The bus system is another big problem. We’ve addressed it, first step, by bringing in a national management team. As you look at different departments I don’t think we do well and shouldn’t be doing. For example the Human Services Department. It’s a service that’s needed but it is mandated and controlled by the state. 

MC: Some of your critics have said the city is approaching a payless payday. What do you say to that? 

DB: My critics said that when I first came into office, in the first 90 days. Has it happened? It could happen, but I’m doing everything I can to try to fix it. This city is fundamentally broken. So coming in here trying to fix everything at one time is an impossibility. So you put a foundation in place.     

MC: What do you make of the Detroit Financial Review Team appointed by the governor? 

DB: They can’t come in here in 30 days or 60 days and understand government. It’s impossible. I’m almost three years into this office and there are things that I’m learning. There’s n
o way in hell that they can come in that short period of time and do a really good assessment. So once again, some people say its just sugarcoating, trying to satisfy some people, keep fears down from a takeover. 

MC: Do you feel your legacy is now being defined by the state of the financial crisis in the city? 

DB: I’ve never worried about legacy. That doesn’t bother me at all. From a political standpoint I came into this office saying I’m not a politician and I’m not one today. I think I understand the process better. I’m here to do one thing: I want to try to fix as much as I can. My legacy to me is what I’ve already accomplished. I think we’ve some strides in the right direction. 

MC: The city is broke. Others have concluded that you are captaining a sinking ship. What is the personal challenge there for you? 

DB: The personal challenge is that I’m a competitor. 

Gov Snyder:
Take consent 
agreement or else   

Rick Snyder_webMICHIGAN CHRONICLE: What would the consent agreement do? 

RICK SNYDER: What it would do is allow the mayor and City Council to continue their traditional role of running the city. Then the state would want to reinforce and make sure we are succeeding in a couple of areas — financial management and implementation. I believe there’s been a challenge in making sure we implement things as they get agreed to, both the enhancement of customer service and the cost improvements. The agreement we talked about — the Financial Review Board — is working with the governor and the mayor to select the key operating people that will implanting things — the chief operating officer, chief financial office and the human resource director who will be responsible 

to both the mayor and the advisory board. 

MC: Are the City Council and the mayor on agreement with this proposal? 

RS: No, actually we are going to the mayor first and then the City Council. I believe this is common sense, common ground partnership. I don’t understand why we don’t have more agreement. 

MC: Why do you think that is? 

RS: I’ve been trying to partner now for months and we are running out of time. March 28 is the date for the Review Team to wrap up their work. We’ve tried to work diligently in a very positive proactive way. 

I can’t explain why it hasn’t worked to be open. And we are now to the point where the best answer is to make sure the Review Team, City Council and general public all can see what we are talking about in a very transparent and open way. And hopefully have the opportunity to chime in. 

MC:  What do labor agreements stand in this Consent Agreement proposal? 

RS: Well, it’s an important thing and I would say that’s really something that this Financial Review Board would have to sign off on. I can tell you that I think people worked hard on those agreements. 

But I’m not sure they fundamentally address the issues that need to be addressed. So I think there needs to be more work done on those agreements. And our treasury shared that with the mayor’s office some time ago. Labor has been good. They are in a difficult environment. 

Let’s get an agreement that can last. This isn’t about Mayor Bing. This is about establishing a format for success. We want something that as time passes we’ve got an environment to make sure we don’t slide back into this. 

This has been a problem for 50 years or longer. This has happened in other places. New York City actually had a board very similar to this for decades and it wasn’t a big deal. 

MC: Why do you think it’s a big deal here? 

RS: I think there’s enough cultural issues and challenges. I don’t necessarily understand it. I can appreciate there’s enough history there and we’ve had problems in the past. But we’ve got a lot of good people working on this. 

MC: Given what happened to the Detroit Public Schools when the state took it over in 1999, there is a strong sentiment that the city is headed down that path. Do you agree with that sentiment? 

RS: Well, I think there is an opportunity with this consent agreement to keep it on a better path. That’s why I’ve argued for a consent agreement the whole time. I don’t want an emergency manager. So I view the consent agreement as a way to avoid that outcome, and to have it so the mayor and the City Council are still managing and running the city. And then get help on the implementation of the financial management. (DPS) is a different context but it’s very important. That’s why I want to be absolutely open about what we’ve been proposing. 

MC: What would be the trigger for an emergency manager? 

RS:  Well, if we can’t get an agreement, if they are unwilling to move ahead. 

MC: It’s been said the state wants to takeover Belle Isle. Is that true? 

RS: I wouldn’t describe it as a takeover. Again, it’s a partnership because we want the city to continue to own Belle Isle, but it’s a financial burden. And if you look at it, are the services everyone would want on Belle Isle up to the standard people like? No. 

So here’s an opportunity where we could do a long-term lease and it will still be owned by the city. But if we had a lease we might be able to make it a state park. 

MC: What would this Financial Review Board do differently that doesn’t reflect what the Detroit Public Schools went through initially when the state came in with an appointed board? 

RS: Again, this board would be focused on the financial management piece. It would be appointed by myself and people representing the city, so it would be elected officials doing all these appointments. The other part is that there is a criteria that these people all ought to have strong financial experience. We are actually looking at asking MACPA- Michigan Association of Certified Public Accountants  if they would help vet the criteria to have them make an  impartial review. I think that sets the standard that this isn’t about politics. 

MC: How do you protect city assets like the Detroit Water and Sewerage Department under this structure of a Financia
l Review Board? 

RS: Actually, this doesn’t necessarily say we are going to dispose of any of those assets. The City Charter has provisions for doing that. So it really doesn’t modify that.  

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