The mayor of Detroit, Dave Bing, has seemed keen to negotiate a “consent agreement” between the city and the state. This would avoid a takeover, but would still set out exactly how the city must extricate itself from the crisis and manage itself in future. However, the agreement had to be signed and sealed by April 5th; if the deadline was missed, an emergency manager would probably be appointed.
Aspects of the agreement are controversial, particularly with the city’s labour unions. It would set up a Financial Advisory Board to oversee the city’s restructuring, recommend cuts in services and appoint a chief financial officer (CFO). It imposes tough terms on future union contracts, a chief cause of Detroit’s financial malaise, and insists that all existing contracts, even those recently ratified, can be reopened. The financial advisory board would be appointed by both city and state, and would have to approve new labour agreements before they went to the mayor and city council for ratification. The CFO would be chosen by the mayor from a list of at least three names submitted by the governor. And if, after all this, the city failed to meet the required savings targets, Mr Snyder could still appoint an emergency manager.
The city council’s response to the consent agreement has ranged from resigned to downright hostile. As The Economist went to press early on April 4th, the nine members had delayed voting on it. One even asked,“What is the hurry?” The hurry was the next day’s deadline. Meanwhile, a coalition of unions has gone on the attack. They argue that the agreement was negotiated behind closed doors, rather than openly as the law requires, and want a federal judge to stop the city and state signing it. The judge said late on April 3rd that he will rule on the matter by April 9th: in other words, after the deadline.
Mr Snyder has laid out the state’s case on a new website, “Detroit can’t wait”. It includes a personal commitment from him to ensure that, “in the short term…the streetlights are on at night and trash is picked up”, and,that “buses run on a reliable schedule so people can get to work”. Whether by a consent agreement or an emergency manager, Detroit’s freedom of action is already tightly constrained. The alternative, though, is bankruptcy.