Michigan to Appeal Court Order On Detroit Financial Deal

Michigan officials said they will appeal a court ruling requiring a judge’s pre-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.

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.

Ingham County Circuit Court Judge William Collette in Mason 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.” A hearing before Collette in a suit over the team’s meetings is set for March 29. The group has until March 26 to recommend action to the governor.

“We are filing an emergency appeal,” Treasurer Andy Dillon said yesterday following a meeting of the review team.

Detroit Mayor Dave Bing, who has rejected Snyder’s plan and yesterday submitted a counterproposal, said the judge’s decision won’t stall any agreement between the city and the state.

“We’re continuing to negotiate,” Bing said in an interview. “We could have an agreement without going to the judge.”

Court Order

Michigan’s Treasury Department views the court order as problematic, said Caleb Buhs, a spokesman for the agency.

“It essentially enjoins us from acting on a consent agreement until March 29,” Buhs said in an interview.

Collette’s ruling came as part of a lawsuit in which he 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.

Attorneys for the state said the study group wasn’t a public body as defined under Michigan’s Open Meetings Act. Collette disagreed, and ordered the team to hold open meetings.

Davis subsequently claimed the review team violated Collette’s earlier order by setting up a five-person subcommittee that met in private last month. Davis asked Collette to find Dillon and individual members of the review team in contempt for violating his order.

The hearing on that request is set for March 29, at which Dillon and four members of the team have been ordered by the judge to provide sworn testimony.

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

To contact the reporters on this story: Steve Raphael in Detroit at sraphael5@bloomberg.net; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; Chris Christoff in Lansing, Michigan, at cchristoff@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Mark Tannenbaum at mtannen@bloomberg.net

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