Category Archives: Submissions

Responses to New Detroit Emergency Financial Manager

Three significant quotes illuminate the Detroit Emergency Manager appointment of Kevyn Orr on March 14, 2013.

Michael Stampfler, former Emergency Financial Manager for the City of Pontiac

“I do not believe emergency managers can be successful — they abrogate the civic structure of the community for a period of years then return it virtually dismantled for the community to attempt to somehow make a go of it. The program provides no structure for long term recovery, and that is why most communities slide back into trouble, if they experience any relief at all — a vicious cycle. The Public Act is not sufficient and the state bureaucracy isn’t up to a performance offering any significant success — as can be noted from the communities repeating.”

Butch Hollowell, General Counsel for the Detroit NAACP Chapter

“The new emergency manger comes from a firm that represents Wells Fargo, which is the leader in forecloses in our state; which participated in one of the largest fraudulent robo-calling schemes — they’ve forced people out of their homes and then don’t pay property taxes on the properties. It represents the Amway corporation, which got ‘right to work’ through the legislature. It represents Bank of America and Lehman, whose actions sunk our economy and then got billions in tax-payer TARP funds. Where’s Detroit’s TARP bailout? The new emergency manager is the ‘diversity chairman’ at his firm and it’s a virtually all-white firm. …” 
“The emergency manager statute allows for dissolving the legislative body and this unelected official enacting statutes. So my vote in Detroit, Michigan does not equal the vote of someone in Grand Rapids. This violates the Voting Rights Act.” 

John Philo,  Director of the Sugar Law Center

“It’s significant that the emergency manager was picked before March 28, because that’s the date the new law kicks in. After that date the city would have the option of choosing alternatives, such as neutral mediation or bankruptcy.” Philo noted this was ironic since the new emergency manager, in his remarks Thursday touted the possibility of the city going into bankruptcy.” 
“Over a decade of experimentation has shown that the emergency manager model is undemocratic and it hasn’t worked. Where they have been in place, those cities and school districts have gone through several emergency managers. The stated goal is to balance the books and the emergency manager model fails to deliver that in the long term. What it does do is force privatization of public resources and guts the public sector unions. But that hollows out your tax base and the city continues in a downward spiral. The people of a city need to decide how to get out of a financial mess and how to prioritize necessary sacrifices. Do they want to sell a park or eliminate a tax break for some business? These are policy choices that residents, not technocrats, should decide.”
Sugar Law Center has taken legal action against Michigan's emergency management model under Public Act 4 and is exploring legal challenges to the emergency management regimes in Detroit and elsewhere in Michigan.

Source: Accuracy.org




Ethics In Michigan is Under Attack

Butch Hollowell, John Philo, and Herb Sanders (Corporation Counsel to AFSCME) were the principal legal staff behind Stand Up For Democracy which successfully pushed the referendum to repeal Public Act 4 onto the November 6, 2012 ballot. Public Act 4 of 2011 is the

Sterling Corporation, Citizens for Fiscal Responsibility, or Michigan Citizens for Fiscal Responsibility - They are all under one roof working hand in hand

The referendum on Public Act 4 was opposed by Citizens for Fiscal Responsibility (CFR), a state ballot committee formed by The Sterling Corporation, a public relations firm working with Republicans. Principals in CFR include:

  • Bob Labrant - former head of Michigan Chamber of Commerce
  • John Llewellyn - Vice President of Government Relations with Michigan Bankers Association
  • Larry Meyer - former CEO of the Michigan Retailers Association
At the same address for The Sterling Corporation is Michigan Citizens for Fiscal Responsibility (MCFR). a federal non-profit, that can lobby or raise money for political campaigns. According to the referenced article from Michigan Radio in speaking with Bob Lebrant "says he was unaware of the similar names when Citizens for Fiscal Responsibility was founded."

It doesn't take too bright a person to see how these two organizations CFR & MCFR working through The Sterling Corporation give the company reach to promote candidates and issues, create the public relations credentials, and raise funds for their clients and issues as well.

Inter Workings of Sterling Corporation Operatives

When the State Board of Canvassers had over 220,000 signatures delivered on petitions to put the opportunity for Public Act 4 to be repealed on the November 6, 2012 ballot a meeting to verify was needed. At this meeting the board would approve the measure and hand it over to the Secretary of State. The votes on accepting were split 2-2, one of those against was Jeffery Timmerer, Sterling Corporation employee who chose not to recuse himself from the vote. His work with Bob Labrant was the main opposition the referendum was facing in approval. They were working on a technicality questioning if the font-size on the petition was proper according to the statutes. Expert witness testimony was brought in to confirm the font was indeed 14 point bold Calibri, but the vow was to ensure this referendum was not to succeed. 


The group chose John Pirich, Esq as their attorney representing Citizens for Fiscal Responsibility. Attorney Pirich is also the chairperson on the Board of Ethics for the State of Michigan. Bob Labrant was supporting counsel. The case history runs through multiple events in the Court of Appeals, and to the Michigan Supreme Court. Time seemed to be dragging out as the case continued to be heard and the referendum was finally approved to be placed on the ballot in the final week possible.

State Interview of #DetroitEFM Kevyn Orr

Notice was received on March 13 at 4:38 pm that a meeting of the State Emergency Loan Board would be held the following day at 3:00 pm. Details as to the purpose of this meeting were brief and not specific as shown in the media advisory received. According to the Open Meetings Act 18 hours notice to the public is required.

Broadcast of the Emergency Loan Board Meeting


Prior to the video starting you can hear Andy Dillon speak into the mic "He will not be able to convince me to do the Ronald Reagan joke about the Red Phone or The Button during his off-mic or pre-event mic check." The video then begins at 11:44 minutes into the livestream session.

Candidate Interview for the Emergency Financial Manager for the City of Detroit

Andy Dillon starts off the meeting stating "The Governor has asked us to consider Kevyn Orr for this position." As he further states he has had several occassions to meet with Mr Orr and he wishes for his colleagues and those watching to get to know him.

The questions of the candidate during this interview were prepared, Mr Orr's responses appear very comfortable as if speaking with people whom he has had a number of meetings.

Public comments begin at 23:30 and close at 28:00
Only one person requested an opportunity to speak - Robert Davis, a union activist from AFSCME Council 25.


Meeting Conclusion

Meeting resumes at 28 minutes into the recording. The following two items on the agenda are quickly moved through.
  • Approval of candidate
  • Approval of Emergency Financial Manager Contract
Meeting adjourned at 29 minutes and end of video.

Krystal Crittendon Regarding Financial Advisory Board Report


Committee to Elect Krystal A. Crittendon

February 25, 2013

FOR IMMEDIATE RELEASE
CONTACT: Phillip Brown, 313 717 5077

Statement of Krystal Crittendon Regarding Financial Advisory Board Report

City can collect $800 million owed by businesses, says Crittendon


Detroit Mayoral Candidate Krystal Crittendon released this statement today in response to the Governor-appointed Financial Advisory Board’s release of findings after its 30-day review:

"The Financial Advisory Board's findings in their report concerning the City of Detroit's financial status should come as no surprise to anyone. The bottom line: the Report provides no justification for the appointment of an emergency financial manager, especially when it makes no mention of $800 million in accounts receivable owed to the City as confirmed by State Treasurer Andy Dillon.

“The FAB had already found the City to be in severe financial distress in 2012. The specific findings contained in the report regarding whether the City was in ‘severe financial distress,’ whether the City ‘had a plan in place to address the financial distress,’ and whether the City had a likelihood of fixing its financial problems, are findings which are required to be made and contained in a financial report to the Governor by a FAB empaneled under PA 72. No one reading the report should be shocked that these findings are included.


“The FAB criticizes the City's Charter as containing ‘restrictions and structural details that make it extremely difficult for City officials to restructure the City's operations in any meaningful manner.’ It must be noted that the City's Charter was required to be, and was, actually, approved by the State of Michigan before it was placed on the ballot to be voted on by Detroit voters. It is unclear as to whether this state-appointed advisory board is aware that the State signed off on the Charter before it was adopted by the residents of Detroit.

“The report also criticizes the fact that the 36th District Court has allegedly failed to collect $279.3 million in outstanding accounts receivables, of which approximately $100.9 million is owed to the City of Detroit. The report suggests that the failure to collect is somehow a failure by City of Detroit government. What the FAB apparently fails to realize is that 36th District Court operations are NOT under the control of City of Detroit government; the City is simply the Court's funding source. The Court operations are not within the control or authority of the Mayor or the Detroit City Council. Moreover, to the extent that the report suggests that the City somehow failed to collect outstanding revenues, then so did the State of Michigan, as the report alleges that $76 million is owed to the State by 36th District Court.

“The report further criticizes the City for failing to have a satisfactory plan to resolve its financial problem, as required by the Emergency Financial Manager Act. This finding is patently incorrect. The City negotiated over $150 million dollars in cost savings with the City's labor unions in December of 2011. These savings were verified by the accounting firm the State forced the City of Detroit to retain to assist in deficit reduction measures. After the contracts were negotiated, the Governor then advised the Mayor NOT to submit these contracts to the City Council for approval. Had these contracts been approved in January of 2012, the City would have realized $150 million dollars in costs savings in 2012. The FAB's criticism of the City regarding whether the City has a plan in place to address its financial problems and the slow progress the City has made in implementing cost-saving measures is, therefore, the fault of the State, and not the City.

“In addition, according to State Treasurer Andy Dillon, $800 million is owed to the City in accounts receivable. However, according to the City Charter, the Mayor must authorize the City Corporation Counsel to seek recovery of these dollars.
“The FAB criticized the City for failing to have a plan to address the cash crisis, or the City's $13.6 billion in long-term liabilities. The FAB report contains a table of figures that supposedly comprise the City's long term liabilities. The table includes lines for ‘Non-General Obligation(s),’ ‘Other Post Employment Benefits Unfunded Actuarial Liabili(ties)’ and ‘Other.’ These three categories total just under $12 billion.

“We know these are not ‘General Obligations, or ‘General Retirement System Unfunded Actuarial Accrued Liabilities’, or ‘Police and Fire Retirement System Liabilities’, because those figures are found on other lines in the table. If they are obligations of the Water Department, they are funded by Water Department revenues, which are not part of the City's general revenues, nor are they debts of the City. Rather they would be debts of the Water Board, which Federal District Court Judge Cox has declared to be an entity separate and distinct from the City.

“This finding is problematic for several significant reasons. First, the long-term liabilities referenced in the report include debt which is not attributable to the general fund. Less than $2 billion is general fund debt; the rest is attributable to "other" sources, such as DWSD bond debt which is secured. Second, the State had to, and did, approve of the bond transactions which the state-appointed FAB now criticizes. Troubling is the fact that the now the State will not give the City all of the money it borrowed—$50 million is being withheld from the City in escrow. Even more troubling is the fact that the City cannot utilize the money it has received to help pay down any debt, as the State has required the City to spend millions of dollars on experts selected by the State to tell us what we already know: the City of Detroit is experiencing financial difficulty. This is actually what the FAB was appointed to tell us.

“Finally, the State made it necessary for the City to have to borrow money in the first place. The State eliminated revenue sharing for all Michigan cities, causing all cities, not just Detroit, to experience financial distress. Moreover, the State used Federal stimulus money to bail itself out, and now enjoys a billion and a half dollar surplus, while cities across the State are suffering.

“I urge the Governor to take all of these factors into consideration as he weighs his decision regarding the appointment of an emergency financial manager for Detroit.”

The Belle Isle Giveaway

Today, Tuesday January 24 at 1pm Neighborhood Community Services committee of Detroit City Council meets and on the agenda is the amended Belle Isle Lease proposal. You may have only seen the January 17 version of the lease proposal. You can find the amended version of the lease from January 22 through our public documents. And you may not have seen the confidential analysis done by Research And Development (RAD). These were declassified and released to the public Tuesday during the City Council session.

A lengthy conversation regarding closed versus open meeting was held and security measures appeared to be the stumbling point for opening the 2pm planned closed session. It is anticipated all council members will be at the 2pm meeting and likely the 1pm committee session (click for agenda). Public comments usually take place at the end of committee meetings, whereas on Tuesdays public comments are held first.

PUBLIC HEARING UPDATE
MONDAY JANUARY 28 at 1:00PM

Banner at rally on Belle Isle held September 22, 2012
There is significant public opinion that Belle Isle should remain with the City of Detroit and claims that it is poorly maintained are false allocations. Off season employment is under 5 people taking care of the island, which rises seasonally. This has been presented to council this fall at the time that Free Detroit, Occupy Detroit, We The People of Detroit, and other organizations gathered for an informational rally on Belle Isle.

Citizens are concerned and the Bing administration doesn't seem to be listening. We are asking what is Detroit getting from this lease arrangement? The owner of property should be in the favored position in negotiations. Voice of Detroit created a chart showing the score and it certainly doesn't seem to be favoring the city. The people opposed state this is a land-grab, or giveaway and hundreds of people have appeared when these issues are brought forward. Perhaps the delay of working on the Belle Isle lease agreement until the weather is bitter cold is a plot to keep the public from showing in force.
From Voice Of Detroit article

Please read over the analysis document and the lease agreement as it is evolving through amendments. If you are unable to attend prepare a statement and email it ASAP to the members of the Neighborhood Community Services committee before the meeting, requesting it is read onto the records and discussed during public comments. Email addresses are: councilmembertate@detroitmi.gov, WatsonJ@detroitmi.gov, K-Kenyatta_MB@detroitmi.gov, CouncilPresidentPugh@detroitmi.gov

Points of information to consider:

  • The greenhouses on Belle Isle remain operating under the City of Detroit. They have been in disrepair for a number of years. Nearby are the Aquarium (oldest municipally ran aquarium in the world), and Conservatory - both of which would be transferred to Michigan Department of Natural Resources (MDNR). The Aquarium has received corporate and foundation grants allowing the roof to be repaired and it has been staffed by volunteers to open it on weekends to the public. It was closed April 3, 2005 until August 18, 2012.
  • Roads servicing the park would be transferred to Michigan Department of Transportation (MDOT). Funds to service them would come from the trunkline roads budget. Does this mean these roads will be improved beyond being park service roads?
  • Does the State of Michigan have any restrictions on development through the lease agreement? Will we see skyscrapers, condominiums, or other dwellings erected on the island?
  • All funds will be paid to State of Michigan with nothing to the City of Detroit. There is a current deal on the table with the City of Detroit for the Orion Music and More Festival scheduled for June 8-9 being arranged through internally know headlining act Metallica. This festival is scheduled to return in 2014 and 2015. Proceeds from that festival are $100,000 in 2013, $100,000 in 2014, and $250,000 in 2015. Park hours are stated to be normal hours 11am-10pm both days of the event. Given the contract is coming through the city, will it remain city revenues or be usurped by the State of Michigan?
Upcoming City Council meetings where a quorum of the whole may be present include: Friday 9:00am (PUBLIC HEARING regarding Reduction in hours), Monday 10:00am (Public Health & Safety), and Tuesday 10:00am (Council Of Whole). We encourage those attending to be onsite waiting at least a half hour in advance.