DETROIT Dec 7 Under pressure by Michigan
officials to turn around Detroit's sagging finances, city
officials said on Friday they will lay off hundreds of workers
in addition to putting some on unpaid leave to stave off
increased state oversight.
Mayor Dave Bing and top officials outlined plans to lay off
400 to 500 employees over the next two to three months in all
non-revenue generating departments, including police and fire,
exempting beat officers. He also reiterated plans to put more
city workers on unpaid leave.
"I've got to make sure that this house that's on fire
doesn't implode," Bing told reporters.
Bing, however, cautioned that Detroit's financial recovery
is likely to take more than eight years.
Frustrated by the slow pace of reform and worried about the
city's long-term viability, Michigan's Treasury Department said
this week it will start a review process that could lead to an
appointment of an emergency financial manager to oversee
The city avoided such an appointment earlier this year by
signing a consent agreement that gave the state some oversight.
However, Bing and the nine-member city council have been at odds
over some of the measures the mayor and state officials believe
will lift Detroit out of its fiscal hole.
Bing said he will urge council members to approve at a
meeting on Tuesday several conditions tied to reforms that state
officials want in order to release $30 million of bond proceeds
for Detroit's near-empty coffers.
One of those conditions is a contract with law firm Miller
Canfield to deal with issues related to the consent agreement.
The council rejected that contract last month, citing concerns
over potential conflicts of interest by the law firm and the
validity of the contract.
Detroit, a city of 700,000, has been hard hit by a steep
population drop, years of severe budget deficits and escalating
employee costs, factors that led state officials to begin an
intervention process a year ago.
The appointment of an emergency manager to oversee the
city's finances would bring Detroit a step closer to a possible
municipal bankruptcy filing because a manager is a prerequisite
for that move under a current state law. However, that law,
which took the place of a stronger 2011 emergency manager law
that Michigan voters repealed on Nov. 6, also gives the state
the opportunity to block the path to bankruptcy court.
Bing reiterated on Friday that he did not think the city
would benefit from an emergency manager or a bankruptcy. But he
also said he understood it was a possibility.
"I'm a realist and I know that could in fact happen," Bing
said. "But I'm also a fighter, so I haven't given up."
A new emergency manager bill that includes a bankruptcy
option for local governments and that has the backing of
Governor Rick Snyder's administration surfaced in the
Republican-controlled Michigan House this week.
The new legislation would keep intact any ongoing review
process, existing consent agreement and appointed manager for
Michigan local governments and school districts.
However, it would give the elected officials of local
governments determined to be in a fiscal emergency several
options: a choice between municipal bankruptcy if the move is
approved by the governor, an emergency manager, arbitration with
a neutral party or a consent agreement.