Detroit Mayor Dave Bing speaks to media about the upcoming Emergency Manager decision by Gov. Snyder at the Detroit Policy Conference, Feb. 28.
DETROIT, MI -- Accountant Lisa Howze, who is running for mayor, has been
that
.
And Mayor Dave Bing today, as he somberly indicated that a state-appointed Detroit emergency manager is on the way, said he agrees with her to some extent.
A financial review team last week officially determined the city to be in a state of emergency, citing, in large part, an estimated $14 billion in long-term debt, mostly from unfunded pension and retirement health care obligations.
That determination set the stage for a state takeover.
But Howze says most of that debt is manageable, with much of it coming from the water department, which she said generated a record $800 million in revenue last year.
“Debt is not something we fear," she said Wednesday. "Debt is something we manage. The water and sewage revenue bonds are covered by water rate payers and are not at-risk of default."
Bing, after telling reporters the governor called him this morning saying he'd made a decision on the emergency manager question, said Howze is not wrong.
"There's a lot of truth to that," Bing said.
"A lot of it is associated with the water and sewage and they're revenue stream can pay that down.
"But let's not fool ourselves. There's millions of dollars in debt."
Bing wouldn’t directly reveal what the governor told him in the phone call, but said the decision is what most have expected.
He spoke in terms indicating that an emergency manager is indeed coming to Detroit.
He said the governor will make an announcement on the matter Friday, but that he doesn’t expect him to immediately reveal who the appointee would be until later.
An emergency manager under the state's new municipal takeover law, which goes into effect next month, would have broad powers including the ability to void or modify union contracts and sell city assets with state approval. (A similar law was rejected by voters in a referendum last year, but the legislature passed a new version of it at the end of 2012.)
Bing made the comments after a speech at the Detroit Policy Conference.
In the speech, Bing reviewed a number business successes Detroit has seen in the last year, but said the city's financial instability bakes bolstering development more difficult.
"This is our reality and my administration is doing everything we can to stabilize our finances," he said.
Bing has opposed appointment of an emergency manager, but said he intends to work with the state on continuing the city's turnaround.
“I’ve never fought help,” he said. “I’m more interested in, instead of fighting Lansing, trying to work with Lansing.”
Bing can challenge the governor’s decision, but said he hasn’t decided whether or not he will.
He said he is waiting in part to hear from City Council, which is considering suing the state over the matter.
Council members were hoping the governor would opt for a revised consent agreement, rather than an emergency manager.
The city entered into a consent agreement with the state last year and a Financial Advisory Board was appointed to oversee a restructuring of city government.
The mayor and City Council, though frequently butting heads in the process, implemented dozens of reforms and dramatic cuts to employee wages and city services in over the last year in an attempt to prevent a state takeover.
The changes included 10-percent pay cuts, layoffs, furlough days, major outsourcing moves, health care changes, fire station closures and other desperate measures like selling scrap metal from abandoned vehicles.
But the moves weren't enough to bring financial stability to the city, the financial review team determined.
Watch raw video of Detroit Mayor Bing speaking to media about the the governor's upcoming emergency manager announcement below:
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Follow Khalil AlHajal on Twitter @DetroitKhalil or on Facebook at Detroit Khalil. He can be reached at kalhajal@mlive.com or 313-643-0527.