DETROIT Jan 8 In an effort to avoid a state
takeover and gain much-needed cash, the Detroit City Council on
Tuesday passed a series of key contracts tied to restructuring
the city's sagging finances.
The approval could trigger the release of $20 million of
bond proceeds by the state of Michigan.
The council also agreed with a request by Mayor Dave Bing to
remove the city's top lawyer.
In a 6-3 vote, the council ousted Krystal Crittendon from
her position as Detroit's corporation counsel. Crittendon, who
was appointed to the position prior to Bing's 2009 election as
mayor, triggered a city cash-flow crisis last year by fighting a
consent agreement between Detroit and the state of Michigan in
The agreement gave the state some oversight of Detroit
finances. The lawsuit, which was dismissed by a state judge in
June, delayed the sale of bonds needed to raise $137 million for
the city's near-empty coffers.
Crittendon did not immediately respond to a request for
comment. Bing told reporters he will be picking her replacement.
The council also passed in a 6-3 vote four contracts that
are part of a series of goals set by Michigan officials for the
release of $30 million in proceeds from the bond sale. The city
in December received $10 million of the proceeds after the
council agreed to hire law firm Miller Canfield to work on
consent agreement issues.
Bing said Tuesday's action on the contracts will hopefully
free up the remaining $20 million. A spokesman for Michigan's
Treasury Department said the department would review the actions
"if and when a draw request were to be submitted."
Michigan officials have stepped up pressure on Detroit to
speed up progress on reforms by launching last month a review of
the city that could ultimately lead to the appointment of an
emergency financial manager. That manager in turn could decide
to take Detroit to federal bankruptcy court unless the state
blocks the move.
A Chapter 9 municipal bankruptcy filing by Detroit would
mark the largest in the United States.
The city of 700,000 has been stung by a steep population
loss and sinking revenue. The city ended fiscal 2012 on June 30
with a $326.6 million cumulative deficit that was up from $196.6
million in fiscal 2011, according to an audit released last
Contracts approved by the council on Tuesday were for Ernst
& Young LLP for financial restructuring work, for Milliman Inc
to evaluate pension and healthcare cost reduction alternatives,
for Miller Buckfire and Co to conduct a financial review of the
city, and for Conway Mackenzie Inc to assist the city in
evaluating, developing, negotiating and executing a