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Judge Stands by His Detroit Financial Crisis Review Order

A Michigan judge refused to back off an order requiring his approval for implementation of any agreement between Detroit and a state financial review team to address the city’s financial crisis.

Michigan Governor Rick Snyder appointed the team in December after a preliminary study found the city was in “probable financial stress.” The group is considering whether Detroit, Michigan’s largest city, needs an emergency manager. The team found yesterday that the city was in a severe financial emergency.

Snyder, a Republican, last week proposed placing Detroit’s finances under a nine-member advisory board in an attempt to avoid appointment of an emergency manager who would have broad powers to rein in costs. Detroit Mayor Dave Bing has rejected Snyder’s plan and yesterday submitted a counterproposal.

Ingham County Circuit Court Judge William Collette ruled March 20 that the review team couldn’t “execute and/or sign a consent agreement or its equivalent” with the city “until further order of this court.” The state’s request to delay implementing that decision is “denied,” Collette said in a two-paragraph order issued today after a hearing in Mason, Michigan.

State Will Appeal

Michigan Treasurer Andy Dillon said yesterday the state would file an appeal of the March 20 ruling.

“We plan to appeal the decision of Judge Collette to deny our motion for a stay later this afternoon,” Caleb Buhs, a spokesman for Michigan Treasury Department, said in an e-mail today. “The decision to remove a key option for the Detroit Financial Review team is detrimental in the efforts to restore the city’s finance health.”

Collette last month barred the review team from holding closed-door sessions, in response to a complaint by Robert Davis, staff representative of the American Federation of State, County & Municipal Employees, which represents Michigan employees. Davis said the group is required under Michigan law to hold meetings open to the public.

The state appealed Collette’s earlier ruling yesterday. Attorneys for the state maintain that the study group isn’t a public body as defined under Michigan’s Open Meetings Act.

A hearing before Collette in Davis’s suit over the team’s meetings is set for March 29. The group has until March 26 to recommend action to the governor.

The case is Davis v. City of Detroit Financial Review Team, 12-112-CZ, Circuit Court, Ingham County, Michigan (Mason).

To contact the reporter on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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