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Detroit council debating financial deal with state

Corey Williams, Associated Press

DETROIT (AP) -- Recently negotiated labor contracts could be nullified under terms of a financial stability agreement between the city of Detroit and the state that was being debated Thursday by the City Council.

Council members said they would not vote on the proposed agreement Thursday evening, and asked their legal department to look into the language.

The agreement amounts to a consent deal that lays out how Detroit plans to work its way from a $200 million budget deficit and long-term structural debt. The proposed agreement calls for existing concessions to be approved by two new directors and a financial advisory board, and the City Council cannot approve the existing union agreements if the pact with the state is signed.

Councilman Kwame Kenyatta said the proposed deal with the state "usurps the rights of the council in its bargaining rights." He said the proposed agreement makes the temporary agreements with city unions "null and void."

Detroit Chief Operating Officer Chris Brown said the issue is making the temporary contracts consistent with what the state.

Contracts were ratified last week by a broad coalition of civilian unions that included concessions such as a 10 percent pay cut.

AFSCME Local 207 President John Riehl said the agreement being reviewed by the City Council would be "bad for city workers and bad for citizens," and appears to be "an emergency manager in disguise."

Union officials hoped to prevent the need for an emergency manager or an agreement between the state and Detroit, which faces a $200 million budget deficit and could run out of cash by the end of May.

"For the governor to come in ... after it was ratified is insulting," he said. "He doesn't give a damn about the people in Detroit and the city workers who voted for this."

Once the council's comments have been considered and incorporated into the draft, the document will be reviewed with the state and returned to the council for approval, Bing said in a statement.

Bing said in a statement that a council resolution to approve the agreement "represents a significant milestone in addressing the city's financial crisis, decades in the making."

"It won't get fixed overnight, but our partnership with the state will drive us as we remedy our financial crisis," Bing said.

By law, if a state-appointed review team had determined the city was in a financial emergency, Snyder would have had the option of appointing an emergency manager to oversee the city's finances. An emergency manager has the authority to dismiss elected leaders and redo union contracts.

Snyder has said he preferred a consent agreement with the city.

Bing said the draft the council will review Thursday lets him hire his own executive staff and outlines specific support from the state. It also calls for the creation of a board that will advise the mayor on Detroit finances and work with the city to set annual revenue targets.

The city would have to adopt three-year budgets instead of an annual budget.


Associated Press writer Jeff Karoub contributed to this story.