Tuesday, March 13, 2012

Detroit To Be Governed By Consent?

The City of Detroit continues to slip, slide, and run out of money.

The latest idea instead of allowing the city to fall into bankruptcy or the appointment of an EFM is that of overseeing the finances of the city by a Consent Agreement and rule by a 9 member finance committee for any funding issues.

Governor Snyder is pushing for the consent approach saying it might save Detroit. If the City consents, then he doesn't take the heat for appointing an EFM nor does he have to be governor of a state with its largest city in bankruptcy should an EFM not be appointed.

The proposed Consent Agreement can be read online.

The Agreement keeps Detroit's Mayor and Council having a say in the composition of the 9-memeber financial management committee and they would keep their positions, which is almost enough for me to be against such a proposal. Letting them maintain their positions and meddle in the needed reforms could prolong the disaster rather than ameliorate it.

Meanwhile, the usual suspects., namely the Council and the city Unions watching the gravy train coming to a halt are campaigning against the move, labeling it undemocratic.

The Consent Agreement also extends $137 million to Detroit - money State Treasurer Andy Dillon claims won't "come directly from the state", but its a sure bet that the money will be backed by State guarantees, leaving Michigan and Michigan taxpayers on the hook.

While the consent agreement is politically a safer move for Snyder than the appointment of an EFM, it is still not going to win him any Detroit support. The specter of leaving the Detroit clowncil and the power structure that ran the city into the ground still in charge, backed by State loan guarantees will probably lose him support outside the city once Michiganians fully understand the implications of the Consent Agreement proposal.

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