Suit says state owes city $230.4 million, asks for “declaratory judgment, permanent injunctive relief” against agreement
Emergency hearing Wed. June 13, 10 AM before Ingham County Circuit Court Judge William Collette in Mason, MI; two buses scheduled to leave from Bethany Baptist Church at 8 a.m. June 13, 15122 W. Chicago. Be there at 7:30 a.m.
By Diane Bukowski
June 6, 2012
DETROIT – An initial hearing on an historic lawsuit challenging Detroit’s consent agreement with the state, which essentially handed over control of the world’s largest Black-majority city outside of Africa, is set for Wed. June 13 at 10 a.m. Ingham County Circuit Court Judge William Collette will preside as a representative of the State’s Court of Claims, in Mason, Michigan. (See map at end of story.)
The lawsuit, #12-000066-MK, asks for “declaratory and injunctive relief” to permanently void the agreement, reached under provisions of Public Act 4. The city’s Corporation Counsel Krystal Crittendon and Law Department attorney James Noseda filed the suit June 1 on behalf of the City of Detroit.
Defendants are the State of Michigan, its Department of Treasury, and Andy Dillon in his capacity as State Treasurer.
“There is no valid contract between the parties because, on or after the date when the Contract [consent agreement] was made, the State was in default to the City,” Crittendon and Noseda say in the suit.
It says state and city statutes bar the agreement because the state owes a total of $230,427,205.99 to Detroit (see sidebar). Those debts, if paid, would eliminate the alleged need for $250 million in city budget cuts for 2013, save 2,566 jobs, and otherwise put the city in the black.
State Treasury Department apokesperson Terry Stanton responded in a statement, “”The claims in the city’s complaint against the Consent Agreement have no merit. The State is not in default to the City of Detroit.”
Judge Collette is the same judge who ruled that Financial Review Teams must be open to the public, along with another colleague in Ingham County Circuit Court. Their rulings were later overturned on appeal by the staet.
Dozens of Detroiters packed Council chambers and hallways for two and a half hours June 5, condemning the City Council “Fatal Five” who voted for the agreement, as well as council members who voted for the 2013 budget.
Midway, Councilwoman Saunteel Jenkins, one of the Five, haughtily led her entire staff out of the room, angry because Tina Person, the “East-Side Lady,” had challenged her proposed reduction of public TV airing of Council sessions. Charles Pugh, Gary Brown, Kenneth Cockrel, Jr. and James Tate are the other four who voted for the consent agreement.
“Charles Pugh, you said during hearings on the consent agreement that we will still get our city service,” Valerie Burris said. “That was a lie. Our neighborhood’s garbage pick-up was three days late, and there are no streetlights working on Outer Drive. You five on the Council voted yes on an agreement you didn’t understand. You don’t care about the citizens. It’s going to be up to us to organize ourselves to resist this decree.”
Bing has already announced he plans to turn off 42.000 street lights in the city. The consent agreement calls for privatization of both the Public Lighting and Transportation Departments. The Council, by a unanimous vote on June 1, reduced Bing’s recommendations for general fund support for D-DOT from $52.3 million to $40 million, calling D-DOT “unsustainable.”
Former City Charter Commissioner and long-time attorney Rosemary Robinson told Council members, “You have effectively destroyed representative government in this city. We are organized and being awakened. You have given away the city’s assets, sold us out to Lansing. WE DO NOT CONSENT!”
Sandra Hines told the Council, “We have already lost control of the Detroit Public Schools, but we are not about to consent to losing Detroit. The consent agreement is illegal, it violates the Headlee Amendment and the 14th Amendment to the Constitution. The city’s power was not taken–you gave it away! You have no respect for the people. We are going to do everything we can to get you indicted.”
Tyrone Travis declared, “We’re in a fight against violent people, because you are bringing death to our community.”
Many members of the audience held up signs declaring “NO CONSENT!” as Robinson and others spoke.
“Free Detroit-No Consent,” a group of prominent citizens led by Robinson, presented a letter supporting Crittendon’s action to the Council. It also denounces the Council vote to approve the budget, saying it was based on an “illegally authorized fiscal stability agreement.”
The Council has not yet voted to appoint its two members to the nine-member Financial Advisory Board that is part of the agreement, which requires the Board to approve city budgets.
The letter asks the Board of Ethics to investigate the officials involved, “initiate forfeiture proceedings and take all necessary and sanctioned action including and not limited to judicial prosecution.”
Many of those who spoke denounced the pending shutdowns of the city’s Departments of Health and Wellness Promotion (DHWP), Human Services (D-DHS), and Workforce Stability Development under the new budget. Those departments are primarily funded by federal grants and cost the city little.
The Council voted unanimously June 1 to temporarily restore partial funding to these departments pending their transfer to private entities, a compromise with Bing’s recommendation that funding be immediately cut.
“How does a human being get out of the business of helping other human beings?” asked Brenda Hurt, a signer of the letter and a DHS worker. “You are giving away funds that the federal government has granted to the people of Detroit, and throwing us workers out in the street.”
Deena Johnson said the dismantling of D-DHS is already taking place.
“They are taking Human Services out of the Six Mile Water Board office,” she said. “They already took our offices on Grandy. What about Detroiters—where can we go? We pay higher car insurance, light and gas bills. I expect the City Council to keep Human Services open. We want this to be a public service, not a private agency. Help us.”
D-DHS services include prevention of foreclosures, evictions and utility shut-offs, provision of food, clothing, day-care and transportation, and funding to non-profits like Young Detroit Builders. It also ran the city’s home weatherization program, which was turned over to WMCAA April 1, with hundreds of workers and contractors left unpaid, and work on homes unfinished.
The city’s Head Start Program, which D-DHS coordinates through contractors, receives $55 million in federal funding which is being transitioned.
“This means grant-funded programs are being privatized and will not be subject to City Council approval,” said Cecily McClellan, Vice-President of the Association of Professional and Technical Employees (APTE) and a member of Free Detroit. “Civil service requirements will not apply. This is going on across the nation.”
Susan Glaser, a member of the city’s Pension Board, said, “Once others find out the city is not going to be providing these services, private agencies will be scampering to get tens of millions of dollars in grant awards. I started working for the city during the years of the Fight Against Poverty, but poverty has not ended, the only thing that has ended is the fight. I would never have imagined then what is happening now. “
She said the city’s pension system is now 90 percent funded and gaining. Greg Murray, President of the Senior Accountants, Analysts and Appraisers Association (SAAA), warned that the cuts may be the first step in dismantling the pension system.
“Has anyone recognized the impact the lay-offs of 3,000 employees will have on the pension fund?” he asked. “This is a long-term plan to destabilize the pension fund so it can go to an outside entity like the Michigan Employees Retirement System (MERS).”
Bing unsuccessfully tried to give the city’s two pension systems, worth over $6 billion, to MERS two years ago. The Lansing-based MERS is a private organization which ousts member systems when they fall below the requisite funding percentage. When it took over the Highland Park system, many retirees were not regularly paid.
DeAngelo Malcolm, staff representative for AFSCME Council 25 implored the Council to stop the destruction of Detroit.
“On my way here today, someone told me a dead body had just been found in a dumpster. There are dead bodies in the streets all through the city. You have children coming to Council today complaining that the grass is not being cut in vacant lots, which is dangerous for them. The Detroit Workforce Development Department (DWDD) and Health Departments (DHWP) are closing. I thought this body had to approve transfers to neophyte private entities.”
Councilwoman JoAnn Watson said she did not support getting rid of the three grant-funded departments, and that if Public Act 4 did not exist, the Council would have had to approve the move. In effect, however, the Council did so in its June 1 resolution.
While the Council restored $7 million to DHWP, it is still slated to be given over to the Institute for Population Health after a transition period and public hearing. The Council restored $48 million to the Detroit Workforce Development Department, “while plans to collaborate with a non-profit entity are thoroughly discussed with the administration.”
Bing’s budget identified that agency as the Detroit Workforce Board, Inc.
It said that the board “will assume the role of fiscal agent and grant recipient for those funds currently administered by the DWDD, subject to the designation by the Chief Elected Official of the City and concurrence by the Governor of the State of Michigan.”
It also said the “Corporation will hire staff in a variety of positions to administer the funds awarded to the Local Workforce Area and other funds directly granted to the Board to train, re-train, secure employment, operate local One-Stop Career Centers and provide various other training through a network of Vendors and Contractors selected by the Workforce Development Board . . .”
A woman carrying a DWDD bag on the People Mover today told this reporter that DWDD has helped many people she knows get decent jobs, with companies like Comcas
Several speakers denounced the numerous closed sessions the City Council has held, as well as its continuing policy of holding meetings in chambers instead of the Erma Henderson auditorium.
Towards the conclusion of public comments, Valerie Glenn of Free Detroit read a brief poem by acclaimed Detroit writer Khari Kimani Turner (published below) that denounces the consent agreement and the state takeover of Detroit. She was interrupted several times by Pugh, who claimed she was exceeding the time limit.
- To read full lawsuit, click CA lawsuit 6 1 12.
- To read City Council vote documents, click Council budget votes 2012.
- To read Consent Agreement, click on FSA Consent Agreement 4 4 12.
Buses to hearing in Mason, MI to leave from Bethany Baptist Church at 15122 W. Chicago (e. of Greenfield), Wed. April 13, 2012 at 8 a.m. Be there 7:30 am. Call Free Detroit at 313-444-0061 to register.
If going by car, map and directions are below.
- From Detroit, take M-10 N (Lodge Fwy.) to 1-696 Walter Reuther Fwy
- to Exit 18C left to Lansing
- Becomes I-96 W (a total of 53. 6 miles from Exit 18C).
- Take Exit 110 toward Mason/Okemos.
- Left onto Okemos Rd.
- Okemos becomes N. Okemoa.
- Turn slight left onto S. Jefferson St.
- 315 S. Jefferson St. Mason, MI 9s on the left.
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