Changing Gears is a public media project about the future of the industrial Midwest. Each week, reporters Dan Bobkoff in Cleveland, Niala Boodhoo in Chicago and Kate Davidson in Ann Arbor cover issues of interest to the Great Lakes region. Changing Gears also sponsors public events and conversations.
The city of Detroit, which recently reached a deal for the state to oversee its finances, is
proposing a budget that cuts more than 2,500 jobs in an effort to reduce its annual expenses by $250 million.
The Detroit Free Press says the 2,500 layoffs would be on top of 1,000 job cuts Mayor Dave Bing sought earlier.
The proposed budget, laid out for city council’s review, also calls for the Detroit Department of Transportation, the city’s troubled bus system, to be privatized. It would transfer operations of the city’s lighting department to an independent authority.
Many homeowners have complained about broken street lights and problems with Detroit’s power grid, which is separate from the rest of the area.
Not tracking incentives Few states are doing a good job tracking their business tax incentives. That’s according to a new report from the Pew Center on the States. The AP has a writeup. Among Midwest states, Pew says Wisconsin, Minnesota, Iowa and Missouri are “leading the way.” Michigan and Ohio have “mixed results.” And Illinois and Indiana “trail behind.” The full report is here.
Revved up for RVs PBS Newshour reports on the rebounding RV industry in Indiana. The town of Elkhart was struggling just a few years ago because of a downturn in RV sales. Elkhart turned to electric vehicle maker Think to help boost jobs. Now, Think is in bankruptcy, and the RV companies are hiring again.
After weeks of debate and sometimes raucous dissent, leaders in Detroit and Lansing finally signed off on a financial stability agreement for the city yesterday.
You can read the full agreement here. But as important as the agreement is, it doesn’t actually solve any of Detroit’s pressing financial problems. It merely lays out the structure and the powers of the new group that will.
So today is when the real work begins.
The Detroit Free Press reports today that the first step in the process is to hire 11 people. Mayor Dave Bing is in charge of finding the first two:
Mayor Dave Bing now has six days to create the positions of the city’s chief financial officer and program management director and 30 days after that to hire the people for the positions. Those holding the jobs must have experience in municipal finance and balancing the books of a government operation of at least $250 million. The candidate list and ultimate hires will have to be approved by Snyder and Bing.
The mayor, governor, state treasurer and city council will also each have a say about who goes on the nine-member financial advisory board that will oversee the city’s finances for the next few years.
Detroit’s deal Last night, the Detroit City Council voted to approve a consent agreement with the state to avoid takeover by an emergency manager. That means, as long as the governor signs the deal as expected and the courts don’t strike the deal down, Detroit finally has the first step in a plan to avoid bankruptcy. Partner station Michigan Radio reports on what it all means.
Chicago’s debt problem The Chicago Sun-Times went looking for reasons why Chicago would turn to private partnerships to fund its new multi-billion dollar plan to rebuild infrastructure. One major reason: the city’s staggering debt. Chicago can’t take out any more bonds to pay for improvements because the city spends almost 23 percent of its annual budget paying off the $7.3 billion in debt it already has.
No more coal ash The Ludington Daily News reports the city’s historic car ferry has received a grant to convert its fuel source. Without the grant, the coal powered ferry would have been forced to shut down by the EPA. The historic vessel dumps about 500 tons of coal ash into Lake Michigan every year.
On Monday, the state appointed financial review team for Detroit held its final meeting, and members got an earful from Detroiters who are worried that their city could face a takeover. Today, governor Rick Snyder is speaking in the city, and he’s expected to take questions. The governor has until April 5th to reach a consent agreement with Detroit leaders. If that doesn’t happen, he’ll likely appoint an emergency manager to run the city.
The state-appointed financial review team for the city did hold a meeting, as expected. It was a pretty raucous meeting, as our partner station Michigan Radio reported. The reviewteam was required by law to make a recommendation to the governor about how to handle Detroit’s “fiscal crisis.”
There were basically two options: Recommend a consent agreement with the city, or recommend appointing an emergency manager who has the power to toss out union contracts, sell assets and balance the books. At the time of the meeting, no consent agreement had been reached with the city, so the emergency manager option – an option no one really wants – was starting to look more likely. But instead of taking option 1 or 2, the review team took option 3: Restate that there is a fiscal crisis in the city, restate that the team prefers a consent agreement and restate the obvious fact that there is currently no consent agreement. Not exactly a historic decree.
One way or the other, today is likely to go down as a historic – and possibly transformative – day for the city of Detroit. The city is burning through its cash, and fast approaching bankruptcy. By the end of the day, we could know more about what approach the state will take to help avoid that bankrupcty.
But the negotiations over Detroit’s future have taken a lot of confusing turns in the past couple of weeks, so we’ve tried to put together some answers to the city’s most pressing questions.
What’s happening today? Today is the deadline for the city to sign off on a proposed consent agreement with the state. The agreement would lead to the creation of a new panel to restructure Detroit’s finances.
What happens if the consent agreement isn’t signed today? Some say the state’s financial review team will be forced to recommend that Gov. Snyder appoint an emergency manager. Then, the governor will have 10 days to do so. But the Detroit Free Press says some of the details are still up for debate.
Over the past week, “consent agreement” became the two most important words in the city of Detroit.
Michigan governor Rick Snyder offered a proposed “consent agreement” as a way to avoid appointing an emergency manager for the city. We did our best to explain the proposal last week, and our partners at Michigan Radio have had extensive coverage.
But the governor’s consent agreement is a long and sometimes confusing legal document. The folks at Code for America seem to have found a unique way of breaking it down. They’ve published the entire proposed agreement to detroitagreement.digress.it, and opened it up so people can comment on each individual paragraph.
So far, commenting has been light, but plenty of people have questions about how certain sections of the agreement will be interpreted.
We talked to Matt Hampel, who created the website as part of his fellowship for Code for America. He and two other fellows are working with the city of Detroit on web-based apps to help the city. Hampel says the consent agreement site is kind of a side project, but the Code for America Team will have new web projects coming out over the next few months.
“We’re looking at issues of transit information, and we’re looking at building some tools around community mapping … We wanted to build online tools that make it easy to collect information about your neighborhood.”
Hampel says he also plans to follow up on the consent agreement site, as new proposals are released. You can find updates at codeforamerica.org/detroit.
Lot o’ Lollapaloozas The Chicago Park District signed a new nine-year agreement with organizers of the Lollapalooza music festival, according to the Chicago Tribune. One park official says the deal will give the city a $1 billion boost over the next decade. But ticket prices for music fans will probably be going up.