• Mayor, City Council plan severe cuts based on faulty report
  • Even Ernst & Young disavows results: “reliance on this report prohibited by any third party”  

By Diane Bukowski 


November 21, 2011  

Mayor Dave Bing with buddies the Rev. "Swindell" Anthony and Confederate flag waving Kid Rock

DETROIT – Mayor Dave Bing and the City Council are basing their demands for up to 2,300 lay-offs, an increase in city income taxes,  privatization and/or regionalization of Public Lighting, D-DOT and Health, 10 percent wage cuts, and 30 percent health care co-pays (amounting in reality to a 300 percent increase in all health costs), on a financial report from Ernst & Young that  may be no more than another example of Wall Street cooking the books.  

The report claims the city will face a $44.1 million cash “shortfall” by June 30, 2012. But EY disowns the report in a disclaimer, prohibiting reliance on it by “third parties.” Their report also makes clear that the “shortfall” is primarily due to the city’s debt payments. 

Bing and the Council have talked about “shared sacrifice” from workers and residents, and even miniscule corporate cuts and taxes along with the $220 million the state owes Detroit (and, as Bing admitted on Channel 4’s “Flashpoint” Nov. 20, will not pay any time soon, such as before June 30.)  

Occupy Wall Street protesters target the banks

But the one entity they have left out of the discussion is THE BANKS!    

How could they miss that? What have tens of thousands of people been occupying Wall Street and more than 100 cities across the U.S. about? IT’S THE BANKS, STUPID!  

According to Ernst & Young’s figures, the banks will get over one half-billion dollars from the city this year. Previous analyses by VOD show that half of that is interest. SO MAKE THE BANKS PAY  the alleged $44 million cash shortfall out of the interest. After all, they got ftrillions from taxpayers in bail-outs.

In the 1930’s, Detroit Mayor Frank Murphy declared a moratorium on the city’s debt to the banks and campaigned for national legislation to allow it.

After his address to the city Nov. 16 (see video below) Bing published the EY report on the city’s website, first discussing it in an illegal secret session with the City Council October 26. (Click on Ernst Young Cash Flow Update[1] for the entire 29 PAGES of the report, which the  city paid EY $1.7 million to produce.)  

While this reporter is not an accountant or a rocket scientist, as most Detroiters are not, one really only needs common sense to review the report and see what’s wrong.  

Even Ernst & Young, a global auditing firm which faces lawsuits from New York and New Jersey for cooking Lehman Brothers’ books before the sub-prime mortgage meltdown, disowns the report.  

In a strict disclaimer, it states on page 29 that the “Cash Flow Forecast Report” is the product solely of City of Detroit management. (Are they afraid of being sued again?)

“With respect to prospective financial information relative to COD, Ernst & Young LLP (“EY”) did not examine, compile or apply agreed upon procedures to such information in accordance with attestation standards established by the AICPA [American Institute of Certified Public Accountants] and EY expresses no assurance of any kind on the information presented. EY did not assist in the preparation or assembly of COD’s prospective financial information or in the development of any assumptions therein.”  

Robbing the poor to pay the rich: Council members (l to r) Gary Brown, Saunteel Jenkins and Charles Pugh have all demanded that tcity workers take more concessions

The disclaimer concludes, “Accordingly, reliance on this report is prohibited by any third party as the projected financial information herein is subject to material change and may not reflect actual results.”

(Excuse me–does that include third parties like the city’s unions and workers, who are to be at the table with first party Bing Nov. 22 to “negotiate” possible concessions, the city’s residents, and even — heaven forbid–the City Council?) 

VOD compiled a summary of key information from the report, which includes the city’s actual and projected receipts, disbursements, and debt payments, from July 1, 2011 through June 30, 2012. Review the chart above–hopefully it won’t spoil your turkey day.

For those who missed it, below is the video of Bing’s vaunted speech to the city Nov. 16. But, poor man, despite the fact that he demanded 1,000 lay-offs, a 10 percent wage cut and health care cuts from the city workers, the City Council and the city’s daily media declared him a total wuss with not enough backbone to bring in the guillotine.

More on what our illustrious City Council members views shortly.


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  1. S. Mack says:

    confirmation: Forensic Audit is needed to catch these crooks fr the pst 2 the present administration. Need an honest outsider 2 do the Audit. It’s not hard 2 see things are purposely in plc 2 continue 2 giv away assets & 2 privitize, regionalize and corportize the city. Population control 2 remove one grp for another. Attack on the poor & a cause and effect 2 raise the provety numbers in this City While they give the banks, & corporations, Cansino’s and Big Businesses a pass. Tax Abatements shd be a thing of the pass. There are business’s who haven’t paid taxes in 30yrs or more Rich tax payers who don’t live in the city have not paid taxes owed the list go’s on Federal $’s millions are sent back instead of being utilized to bldg economic wealth for the city gotta believe things are being done delibertly

  2. Michael Mulholland says:


    Thanks for the shot at the banks EY. Just so you know, Bing’s “10%” healthcare increase is a blatant lie. More city workers have signed up with BC/BS’s PPO (Community Blue) than any other single carrier, largely because we only pay 10%–which averages out to 20% when you factor in the deductibles, coinsurance and copays that HMOs don’t charge. HMOs like HAP cost 20% out of your check, but have no big out of pocket costs. In May Bing demanded that city workers pay 20% of our health insurance. But since 1996 city workers have always paid 20% of the costs (he’s a fuckin idiot really). So then he changed it to 30% for his latest act. I have Community Blue. I pay about $50 every two weeks which is deducted from my check for family coverage. If Bing gets his way that will increase to about $150 (a 300% increase)! Also my already considerable coinsurance, deductibles and copays will increase a lot. HMO users will only (!) see their costs from their checks increase by 50%, but will be shocked with the same level of increased coinsurance, copay and deductibles visited upon me. 10% MY ASS! Seeya, Michael Mulholland

    • Diane Bukowski says:

      Sorry, Mike, I didn’t mean Bing was asking for 10 percent of workers’ pay, but that he is asking for a 10 percent INCREASE on top of the 20 percent city workers already pay. I’ll clarify that in the article. I posted this on several Facebook pages that I found, including Catherine Phillips. Cecily McClellan and Henry Gaffney’s. I’m hoping it has some impact if the unions go to the table today–THE REPORT SAYS “THIRD PARTIES” (LIKE THE UNIONS) ARE NOT TO DEPEND ON IT! NO CONCESSIONS! MAKE THE BANKS PAY!

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