Charles Pugh: ‘Council can’t be in court fighting the EFM’

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    CHARLES PUGH, president of the Detroit City Council, sat down with the Michigan Chronicle last week for an exclusive interview about his impressions of Detroit’s emergency financial manager. — Andre Smith photos

    “It’s not unique to Detroit,” he said. “But it is happening here and we need to do something about it.”

    – Council President Charles Pugh

    While various lawsuits have been filed regarding newly-appointed emergency financial manager Kevyn Orr, Council President Charles Pugh said the city council will not file a legal challenge.

    “We are the people who were elected to make the legislative decisions about running the city,” he said. “So we can’t be in court trying to bring the whole thing down.”

    He also noted that there are so many things peripheral to Kevyn Orr that are central to the council.

    “He’s got to restructure the debt,” Pugh said. “That’s a full-time job. Our full time job is making sure that the lights are on, the grass is cut, the snow is shoveled.”

    He also said the council has to publicly approve and vet contracts, and make sure if issues need to be discussed, they’re discussed at the council table.

    The council also needs to make sure boards and commissions are functioning, and are reporting to the public what work they’re doing.

    He added that the council recently passed an urban agriculture ordinance and said Orr would likely not be interested in the issue of urban farming in the neighborhoods.

    Pugh also said the reality is that if Orr does his job of restructuring the debt well, and the city has a lighter debt load; is paying less in debt service and health care; has worked out things with the unions so it can afford benefits; and has made some amends with retirees concerning health care; those big ticket issues could help the city have more room in its budget to better deliver services.

    “Which is what everybody wants,” he said.

    Pugh said he’s always been an optimist, but the older he gets the more he’s an optimistic realist.

    “I feel like we really can fix this situation,” he said. “And with Mr. Orr’s presence, we can make the best out of a bad situation.”

    He also said Orr has already used his better discretion by saying it wasn’t his fight to decide what salaries the mayor and council should make.

    “With an upcoming election, you don’t do that,” Pugh said. “That would have been devastating. So I’m glad he didn’t do that.”

    Pugh also pointed out that on the other side of this debt restructuring — whether Orr’s appointment is overturned in court, or whether he’s here for the duration — the city will be stronger.

    He emphasized that we need this debt restructuring badly.

    “We’re going to be a stronger city and a city that is better able to manage our finances,” Pugh said. “And to better deliver city services.”

    Pugh also said the council is going through departmental restructuring as it looks at better ways it can manage its departments.

    With respect to the latest news about the city’s pension funds, Pugh said it’s frustrating.

    “But I don’t want to throw out the baby with the bathwater,” he said. “And what I mean by that is just because there are a few bad actors, maybe there needs to be better internal controls, better checks and balances, better oversight.”

    He also said those funds invest hundreds of millions of dollars in our community that otherwise would not have been invested, and added that the health of the police and fire pension fund is very important.

    Among his suggested fixes for the problem included improving the standards for selecting board members.

    “Make it less political and more functional,” he said. “And get more financial experts on there.”

    He suggested that at least half of the board has to be CPAs and accountants and finance people.

    Pugh also noted that there needs to be higher standards, better checks and balances, and perhaps another layer of decision makers providing oversight and making sure every transaction is transparent and public.

    He doesn’t want Orr to unilaterally run both pension systems, as it wouldn’t be fair. On the other hand, he does want this opportunity to make sure they root out corruption and that we think about the overall health of these plans.

    He described pension reform as a statewide, even a nationwide issue.

    “It’s not unique to Detroit,” he said. “But it is happening here and we need to do something about it.”

    He also said many projects in the city that are creating jobs happened because the pensions invested in them.

    “Or they wouldn’t have happened,” Pugh said, adding that there are pension investments in these three major projects: the Westin Book Cadillac, the Doubletree Hotel and the Eight Mile and Woodward Gateway project.

    The one message the “optimistic realist” wants to get across to the citizens is that we can do this.

    He said Detroiters can do more than fight. They can improve.

    “We can build,” he said. “We can grow.”

    He believes this is the beginning of a growth stage, and cited General Motors and Chrysler, which are both stronger than they have been in a long time.

    He said the same sort of painful but necessary restructuring the automakers went through can happen with city government.

    He wants the African American middle class — the largest demographic the leave the city in the last 10 years — to return, but added that we have to give them a reason to move back. They want anybody who wants to come to the city and increase the tax base and the schools, and attract retail to do so.

    He mentioned that the only demographic that increased was young White people.

    “That screams volumes to retailers of your potential,” he said, citing various retailers coming into the city.

    “These investments are not made by accident,” Pugh said. “There’s a reason why these retailers are coming here.”

    One of his points to Detroiters is that he considers the emergency financial manager to be of short duration, in line with all the other things that are going on.

    He believes we are moving in the right direction.

    “We are going through some much necessary and much needed restructure,” he said. “We’ve got to do this.”

    “Those with the loudest trumpets can’t just sit back and complain and protest about everything else when the most important aspect — the economic engine — doesn’t even merit recognition on their platforms.”

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