Detroit Consent Agreement Lawsuit: City Council, Mayor Disagree On Challenge, Resolving Cash Crisis

'What Is Our Game Plan?'

Mayor Dave Bing met with Detroit city council early Monday morning to push a plan to stop a lawsuit that the administration says could jeopardize the city's ability to operate. But he found less support than he wanted, as city council members variously backed the lawsuit or hesitated to denounce it.

The city's corporation counsel, Krystal Crittendon, alleges the consent agreement Detroit forged with the state of Michigan in April is invalid. Her argument hinges on a clause in the city charter that forbids the city from entering into contracts with debtors, and she claims the state owes Detroit more than $200 million in revenue-sharing payments as well as several million in unpaid utility bills.

The state denies the charges and the Treasury Department instead has threatened to further withhold revenue sharing from the city if Crittendon doesn't drop her case. Without that infusion of state cash, CFO Jack Martin said the Detroit could be broke by Friday.

Bing has pleaded with Crittendon to drop the case and reiterated his position Monday morning that the city should move forward with the consent agreement.

"I don't want to play this game of roulette and keep these citizens at risk," he said.

But city council members weren't ready to step on Crittendon's toes. Four members opposed entering into the consent agreement in the first place, back in April. And Council Member JoAnn Watson noted the Treasury approved the $80 million in bonds that's keeping the city afloat in advance of the deal.

"They don't have a right to do that," Watson said of the state threatening to withhold funds for bond financing. "It was negotiated and approved prior to the consent agreement being voted on. They should be held to their agreement and the money should flow as was promised."

Council Member Ken Cockrel, Jr., who voted in favor of the consent agreement, challenged the state to pay its debts and offer the city some financial relief.

"We know they can pay that in a heartbeat if they chose to," he said. "Every other week you open up the newspaper and you read they found another hundred million some place. There can be some sort of arrangement worked out to get us to resolve this situation."

The governor's spokeswoman told the Free Press on Sunday that the state does not intend to budge.

"Our position is the same: That it's time to move forward with the agreement that was signed voluntarily by all parties. Detroit and our state can't afford to wait any longer," she said.

"They have the hammer right now," Bing said of the state, according to the Detroit News.

City council and the mayor cannot force Crittendon to drop her suit. Under Detroit's new city charter, which took effect earlier this year, the corporation counsel acts independently of the administration and city council. Her role is to enforce the charter, and Crittendon says that's precisely what she's doing in suing the state for debts owed.

City Council President Charles Pugh urged for a quick resolution to the lawsuit and a declaratory judgment, and seemed willing to play chicken with the state's threat to withhold funds.

"We should move forward until there is a legal opinion or a legal judgment based on the law," Pugh said at the end of the meeting.

Bing appeared to be far less confident, asking, "If we run out of money on Friday, as Mr. Martin has said ... what is our game plan?"

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