COMMENTARY

Detroit officials fiddle while city burns through cash

3/16/2012

DETROIT -- There is no doubt that Michigan soon will take effective control of Detroit, one way or another.

The city is on the brink of financial collapse. Detroit expects to run out of cash to pay its bills in April or May. Borrowing more money isn't an option. The city is $33 in debt for every $1 it has in assets.

There are more than twice as many city retirees drawing pensions and health-care coverage as there are city employees.

None of this is a surprise. Michigan law says when a city can't pay its bills, the state has to take over.

But when Gov. Rick Snyder tried to throw the city a lifeline, the reaction by Detroit's elected leaders might astound any rational person who has been following Detroit's long agony.

Not only have they not taken any steps to prevent the city from collapse, many seem to be out of touch with reality.

That was never more clear than this week, when the governor offered the city a consent agreement structured to bring radical change and fiscal responsibility to Detroit; that is, to give it a shot at a future.

Essentially, the agreement would establish a nine-member financial advisory board with broad power to structure city government and finances. Mayor Dave Bing and Detroit's nine-member council would lose some -- but not all -- of their authority.

They also would have a role in restructuring the city, and would be able to appoint some members of the board.

The consent agreement, which needed the approval of the mayor and council, was clearly an attempt at a compromise to avoid appointing an emergency manager who would assume power.

But when the details were known, the mayor and City Council angrily rejected it. The mayor, who had seemed to favor a consent agreement, said the agreement "does not represent the spirit of partnership needed."

Councilman Saunteel Jenkins said council should insist on playing a role. She added: "I think it has been shown that when we wait for other people, we are often left out."

Which, ironically, is in part how all this happened.

The governor said he hadn't wanted to become involved, but felt he had no choice.

"For several months, I have made it very clear through my discussions with the mayor that the best possible outcome would be for the city to develop its own workable plan," Mr. Snyder said. "Over time, it has become increasingly clear that may not come to fruition."

That is a diplomatic way of saying that city leaders have shown no sign of taking the hard steps needed just to prevent running out of money, let alone to find long-term solutions.

Someone who has served as an emergency manager in another Michigan city said he was impressed by Mr. Snyder.

"You have to commend the governor for attempting to sweeten some medicine that may not taste too good," he said, "and for trying to give the city something it can accept and that solves the problem without bringing in an emergency manager."

But there was no sign of any gratitude on the part of city officials. The day after he unveiled the agreement, the governor said he had expected the early reaction to be negative.

He asked: "The real question is, how do we solve the problem? How do we get better basic services to Detroiters? How do we get to financial stability? So let's focus the discussion on that."

Unfortunately, too many Detroiters didn't seem willing to do that. There was muttering that this was a case of white Republicans imposing their will on poor, black Democrats.

Some people clamored for Michigan to give Detroit more money, with no strings attached. Perhaps the most bizarre idea was that of State Sen. Virgil Smith, a Democrat from Detroit who suggested that the state allow the city to levy its own sales tax.

Nobody is in a mood to trust Detroit with more money. The day the consent decree was announced, it also was revealed that Mayor Bing is forfeiting $72 million in federal aid meant for the poor.

Why? Because the mayor had to shut down the city's Department of Human Services, thanks to incompetence and corruption. Some of the officials lavishly spent money that was meant for the poor on themselves.

The governor has said he won't impose the terms of the consent agreement unless city officials agree to it. But if they don't, an emergency manager seems certain to follow.

But there's a chance that the state's emergency-manager law soon may be put on hold pending a November referendum. That would mean the state's old Emergency Financial Manager law would be in force.

Either way, city officials would lose their power, although emergency financial managers would lack authority to set aside contracts. That might lead whoever is appointed eventually to ask the governor to have the city declare bankruptcy.

Whatever happens, it is clear there are no easy fixes for Detroit. The governor's proposed consent agreement is designed to essentially allow the city to reinvent itself, and address the decades-long problems caused by mismanagement, economic decline, and population losses.

But that would require Detroit's elected leaders to agree to lead, and assume some responsibility for a cure certain to be painful and politically hard. So far, they aren't willing to do that.

Jack Lessenberry, a member of the journalism faculty at Wayne State University in Detroit and The Blade's ombudsman, writes on issues and people in Michigan.

Contact him at: omblade@aol.com