Detroit Mayor Dave Bing: State likely will withhold revenue sharing

Mayor demands lawsuit to be withdrawn so city can get cash it needs to survive

Published On: Jun 10 2012 03:16:11 AM EDT   Updated On: Jun 11 2012 11:52:05 PM EDT
image: city in crisis
DETROIT -

Detroit Mayor Dave Bing on Monday sounded the alarm to City Council that if nothing happens quick, the city is headed off a financial cliff.

“We want to push this forward as fast as we can so that we can get cash to run the city. Without that, we’re dead,” Bing said.

Bing told City Council Monday during an emergency meeting that state revenue sharing likely will be withheld unless a lawsuit challenging Gov. Rick Snyder's consent agreement with the city is dropped.

Detroit faces a budget deficit of more than $200 million and in April entered into the consent agreement, which allows the state to have a role in revamping the city's bleak fiscal condition.

Bing said city Corporation Counsel Krystal Crittendon needs to cease her action claiming the consent deal is invalid because Detroit is owed past revenue sharing. Snyder disputes that claim.

Krystal Crittendon

--Krystal Crittendon

"I demand that Corporation Counsel withdraw the lawsuit and I also demand the City Council vote to require the corporation withdraw the lawsuit.

READ: Detroit lawsuit against Michigan Department of Treasury

Emergency meeting Detroit City Council, Detroit Mayor Dave Bing

The consent agreement allowed Detroit to avoid a state-appointed emergency manager.
A judge will hear Crittendon's suit Wednesday.

WATCH: Who is Krystal Crittendon?

A Treasury official warned last week that more than $80 million in revenue sharing could be in jeopardy if the suit is not dropped early this week.
Bing's office has said the city would be able to meet Friday's payroll without the revenue sharing, but would have no money left.

The emergency meeting ended with no settlement on what should be done about the city’s lacking cash flow.

Detroit financial manager Jack Marktin said last week that the city will run out of cash

"We're looking at a week from today, June 15, I think, would be the day," Jack Martin said.

Detroit unions upset over lack of negotiation

Some Detroit union leaders accuse Bing and the city of backing them into a corner by refusing to negotiate new collective bargaining deals with less than a month before some of the contracts expire.

Union strategy sessions continue to focus on what could be a June 30 contract showdown.

"We looked at this back in December. We kind of expected things to go south," said Joseph Duncan, Detroit Police Officers Association president. "It's my impression they are going to try to impose a contract on us."

Duncan said his and other unions haven't bargained with the city since earlier this spring when the unions agreed to pension, benefits and work rule changes. The tentative agreements were intended to help the city stave off any attempt by the state to appoint an emergency manager.

Part of the consent agreement calls for the city to have either negotiated or imposed new labor deals by July 16 for contracts expiring this summer.

"People are saying if (the city) goes to bring somebody in here to take their jobs that there is going to be hell to pay," said Ed McNeil, a spokesman for American Federation of State, County & Municipal Employees Council 25. "When you start to roll over people you are going to get a lot of push-back in this town, which I don't want to see."

City unions have not voted on whether they will strike, but a coalition of about 20 bargaining units has filed an unfair labor practices complaint with the Michigan Employment Relations Commission alleging the city failed to execute the tentative agreements.

Mayor's signed budget calls for job cuts

Bing in May signed a council-approved budget for the coming fiscal year that calls for cutting more than 2,500 jobs, while shaving $250 million in annual expenses.

The city's accumulated budget deficit is about $265 million. Long-term structural debt stands at $13.2 billion.

The tentative agreement with police would have saved the city more than $20 million and included a 3-year pay freeze, according to the police union.

The tentative deal between the city and about 20 civilian unions was to have created about $60 million in health care savings. But those and other savings didn't "appropriately address" Detroit's fiscal cash crisis, according to a review done in February by the council's fiscal analysis division.

None of the deals went into effect.

"The city is saying we didn't have an agreement because it was never approved by council," Duncan said. "The bottom line is the city needed our help to try not to get an emergency manager. We sat around the table and looked at each other, realizing the city was in trouble. We negotiated with the mayor. As soon as we got it done, they turned their backs on us."

McNeil said the unions contend there is an agreement.

"We have a deal, a 3-year agreement. We signed it. We shook hands," McNeil said. "We know we can't trust them at this point."