Detroit, in limbo

So much going on in Detroit, after several weeks of uncertainty about whether the financial review team appointed by the Governor would be able to move forward (punctuated by court orders requiring them to stop secret meetings, and the dismissal and then reinstatement of Flint’s emergency manager).

The review team missed its original deadline in late February, and there were a couple of weeks of back and forth about whether the city and the state could arrive at a consent agreement to avoid an emergency takeover (the governor’s proposal, which would transfer all fiscal decision-making to the board, was rejected by the city). Late Friday, the Michigan Court of Appeals ruled that the team could move forward, just in time for the Monday, March 26 deadline. Meanwhile, the City Council authorized $137 million in bonds  (although borrowing costs Detroit a lot), and reiterated the need for the State to bring cash to any potential agreement. The City also negotiated 30 new union contracts, which were ratified Friday March 23, but those now hang in limbo (and are criticized for not saving enough money).

On Monday, March 26, after finding that “city officials either had been incapable or unwilling to manage the finances of the City” (Free Press, 3/27/12), the financial review team held a meeting to announce their findings and gave the  City and the State another 10 days to come to a consent agreement to prevent the appointment of an emergency manager. But Detroit’s bargaining power seems to be significantly reduced after Monday.

Background: Michigan passed a law last year broadening the state’s power to appoint an emergency manager for a local government or school district in the event of financial emergency, and also broadened the power of such a manager. Since then, the state has appointed emergency managers for the Detroit and Highland Park school districts, Flint, Pontiac, and several other school districts and cities.

(Meanwhile, Mayor Bing has been in the hospital for several days recovering from a perforated intestine, leaving a Deputy Mayor in charge.)