DETROIT (AP) - With only a month left before Detroit could go broke, city council members have delayed the actions which could have ensured the city millions of dollars.
A majority council vote stopped the Miller Canfield law firm from moving forward with advising Mayor Dave Bing during the financial situation in the city. A shot against the Milestone Agreement which was put in place to ensure money for the city, $10 million in bond money in November and $20 million in December.
Another issue was council voting "yes" for Ernst & Young to continue to be the city’s financial advisor.
The city’s top attorney Crystal Crittenton advised council that there were a few conflicts of interest in the contract with Miller Canfield as it stands.
The majority of council members agreed with Crittenton, because Miller Canfield wrote the Milestone Agreement and helped write the Financial Stability Agreement.
The council voted 8-1 Tuesday afternoon to delay a decision. President Pro-Tem Gary Brown was the lone councilman in favor of Miller Canfield getting the deal.
Mayor Bing said in a statement to council’s decision, “The State has made it very clear that if the City of Detroit did not meet all three milestones as outlined in our agreement, money from the City’s escrow account would not be forthcoming. The Council’s rejection of the Miller Canfield contract means the City will not receive the first $10 million scheduled for release today. As a result, it will be more difficult for the City to maintain its liquidity until the receipt of property tax revenues beginning in January. Today’s vote is one more example of how City Council has stalled our efforts to bring financial stability to the City of Detroit.”
Council President Charles Pugh also released a statement early this evening in response to Mayor Bing’s statement: "Mayor Bing put the city at risk by negotiating Miller Canfield into the agreement. Of the four contracts that the city council must approve to comply with requirements for release of escrow funds, the council has already approved three. We approved a one-year extension of the Ernst & Young contract, the outsourcing of payroll administration to ADP, and a few weeks ago we approved the Milliman contract to audit our pension system. However, there were too many inherent conflicts to approve the Miller Canfield contract. We will work the mayor to choose another law firm immediately."
Pugh also spoke to 7 Action News at a community meeting Tuesday night regarding the decision.
"I think it's unfortunate that Mayor Bing would show such a lack of leadership," said Council President Charles Pugh. "It was shoved down our throat and we felt like we were being forced into accepting one particular law firm. The city of Detroit should not go broke due to one law firm. If that's the stance he's taking then I think he needs to sit down and rethink his position as mayor."
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