The minutes Tuesday morning leading up to the Detroit City Council’s appeal of the state's review team’s findings is orderly and professional.
The hearing room inside the State Treasurer’s office is small, maybe 20 by 20. The state says it is capable of holding 56 people; I would say that’s if you jam them in like sardines!
Already here are Detroit City Council President Charles Pugh and half a dozen of his office staff, Council member Andre Spivey, Detroit Research attorney David Whitaker, Irvin Corley Jr. Detroit’s Fiscal Analyst and the attorney who will plead the City of Detroit’s case Edward V. Keelan, Deputy Corporation Counsel.
So far, the state’s hearing team, led by Frederick Headen, director of the Department of Treasury’s Bureau of Local Government Services, has not yet arrived.
Charles Pugh was happy to hand out the following statement:
“We do not dispute that a financial emergency exists in the City of Detroit. In fact, we have worked as a Council, to put Detroit on the right fiscal path. We have consistently developed sound budgets which have not only included the tough cuts necessary to address our cash crisis, but we’ve also proposed a list of revenue generating opportunities. To further these efforts, the Council and Mayor’s Administration developed a three-part plan over the 2012 December break, which is comprised of milestones and recommendations from the State of Michigan that addresses Detroit’s financial emergency.
Given the time to achieve its projected results, we believe this plan, along with the recommendations from several financial analysts that have been hired to assist city staff, can accomplish the coal of improved fiscal and operational health of Detroit. As outlined in our resolution appealing the Governor’s determination, we’ve already taken several steps and we’re beginning to see progress.”
The city’s case is made in a three page paper, the highlights I will pass along as soon as I get a chance to read it. In the meantime, having spent time discussing this case with the governor himself and the treasurer’s office, I can tell you that assessment of the city’s “progress” is one the state has often heard and often rebuffed as nothing in the neighborhood of being sufficient to the task of solving Detroit serious short and long term problems.
We were told there would be a protest outside the hearing, so far nothing has materialized.
There are two new arrivals on the City’s side, Council members James Tate and Ken Cockrel Jr.. Frederick Headen is now seated at his table. The hearing officer, Chief Deputy Treasurer Mary G. MacDowell Just came in. The hearing is starting about one minute late.
The City’s Case goes as follows:
1.) By adopting the “milestone agreement” as part of the City’s Consent Agreement signed last April  recommended by the State of Michigan “a satisfactory plan to address the City’s financial emergency”
2.) That plan has three parts
a. The Consent Agreement
b. A Memorandum of Understanding signed last November establishes timelines and benchmarks for completion of restructuring tasks.
c. A Joint Cash Plan developed over December 2012 had the City hiring Ernst & Young and Miller Canfield consultants to assess the city’s financial difficulties.
3.) Council is seeking continued implementation of the plan with enhancements to be provided by consultants
4.) “The city has made measurable progress” toward the goals outlined in the document.
The state is making its case, reiterating the Review Team’s assessment the city has mountains of debt and no “acceptable” or “satisfactory plan to address that.
Frederick Headen the director of the Department of Treasury’s Bureau of Local Government Services said, in exceptionally quite tones “I do not anticipate, based on the Review Team’s work, another consent agreement is an option.”
He pointed to the City’s existing consent agreement and found a “notable lack of enthusiasm by the city to move forward” considering it moved on little in 5 months after the agreement was signed. He said he had “little confidence the city could or would abide by a second consent agreement.” He brought up another consent agreement because it is what the City is asking for.