City in Crisis: Will Detroit be broke by December?

Published On: Nov 12 2012 11:22:17 PM EST
image: city in crisis
DETROIT -

The city of Detroit is running out of cash and could be in the red by Christmas.

According to Program Management Director Kriss Andrews, the situation is critical but it can be fixed.

“We’re going to work through that, we’re going to solve the problem, we’re going to get through December,” said Andrews.

Detroit will do it by getting monies currently held in escrow by the state for the city and money from bond sales.  Detroit has already drawn more than $50 million of those monies, about $30 million remains.

Under the consent agreement with the state, Detroit would have to show appropriate progress in fixing the city to get the money in escrow. According to the Michigan Dept. of the Treasury, they are working with the city to hit those milestones to qualify for the cash.

That handles the short term financial crisis, but the long term is the real issue. The Financial Advisory Board says reform is not coming speedily enough to stave off financial crisis.

In addition to the financial drama the city is facing, there is another playing out in the background. Since voters overturned Public Act 4, the Emergency Manager Law, Detroit’s City Council has asked the city’s top lawyer for an opinion on whether and how Detroit needs to continue carrying out the consent agreement. That opinion is expected shortly. The opinion of the Attorney General is the agreement stands.

While the politics plays out Andrews says he’s keeping his eye on the bottom line.

“We need to move forward with a reform agenda. We need to do the things that make city government more efficient, less costly and more effective,” said Andrews.