Detroit rejects funds, will the city be out of cash by Christmas?
Detroit's city council rejected a condition that $10 million in much-needed aid was dependent upon. The city, which is struggling financially was expected to receive $30 million from the state of Michigan by mid-December.
(Page 3 of 3)
Council members raised several objections about Miller Canfield, including potential conflicts of interest in the work it performs for the city and the state and the scope of the contract. Some questioned whether the contract was legal under the city's charter because it was neither prepared nor approved by the city's chief on-staff lawyer.Skip to next paragraph
Subscribe Today to the Monitor
Projections presented by city officials to Detroit's oversight board earlier this month showed the city's weekly cash flow at just $4.1 million in mid-December before dropping to a negative $4.8 million at the end of the year.
Detroit's financial advisory board was created under an agreement that allowed Detroit to avoid the appointment of an emergency manager to run the city while giving the state some oversight and allowing the mayor to disregard collective bargaining agreements with unions.
Pugh said the council had previously approved a contract with consulting and actuarial firm Milliman for pension services, which was also a condition of the deal. While the council is officially scheduled to be in recess until early next year, Pugh said it could come back in a special session at any time.
Detroit faced a cash crisis this summer that led to warning it could default on some bonds. The cash crunch and default were averted by the bond sale.