Detroit and Michigan come to terms on bailout, averting bankruptcy
After weeks of protest, Detroit's city council agrees to a deal that directs budgetary matters to an outside advisory board, but avoids the sweeping state takeover that many residents opposed.
(Page 2 of 2)
Michigan State Treasurer Andy Dillon said late Wednesday that it is likely to be five years or more until the city sees a turnaround. “The city didn’t get here overnight, so it’s going to take awhile to get it back on its feet,” he said.Skip to next paragraph
In Pictures Detroit's dilemma
Subscribe Today to the Monitor
In earlier drafts of the agreement, Detroit's city council had requested state funds to help ease its crushing pension obligations, as well as its $200 million budget deficit.The current agreement does not include a cash infusion, although Mr. Dillon said the governor is willing to direct money to Detroit “if he sees progress.”
“At some point we’ll want to invest in the city,” he added.
Detroit Deputy Mayor Kirk Lewis praised the vote, calling it “a pivotal moment in Detroit’s history” for beginning “the monumental task of stabilizing Detroit’s financial operations.”
“This agreement also ensures the future of Detroit is determined by Detroiters and its elected officials,” he said in a statement.
The new agreement calls for the formation of a nine-member advisory board, which will impose state oversight over the city’s financial restructuring. The new chief operating officer and chief financial officer report to the mayor and carry out the board directives. Governor Snyder will appoint three members, Detroit Mayor Dave Bing and the city council will appoint two each. The city and state will jointly approve one board member; the state treasurer will appoint one.
The prospect that the state would assess the city's financial health prompted heated public meetings and protest against a state takeover. In public hearings and during outside street demonstrations, many residents accused the state of a power grab. Because Detroit is a majority black population, many of the criticisms invoked racial overtones, with many accusing city council members of being traitorous if they voted for any state oversight.
Isaiah Thomas, a member of the state review board tasked with negotiating with the city, said the protests hurled at the board were expected and even warranted.
“That’s America. That’s what we do. We have that right to do so, so those people who yelled and screamed at us, that’s America,” he told reporters late Wednesday.
As negotiations moved forward in late March, Mayor Bing has been in and out of the hospital following surgery. On Wednesday he returned to the Henry Ford Hospital, where doctors say he is expected to make a full recovery.
Get daily or weekly updates from CSMonitor.com delivered to your inbox. Sign up today.