Mayor Bing calls emergency City Council meeting; Detroit could run out of cash this week

DETROIT (WXYZ) - The city is once again on the brink of financial collapse as the top city attorney refuses to drop a lawsuit filed against the state.

According to Mayor Dave Bing City Attorney Krystal Crittendon will not drop the city's suit which seeks to undo the consent agreement signed off on last April by the majority of council and the mayor.

Because of the new city charter Mayor Bing and the council do not have the power to force Crittendon's hand. Meanwhile, the state treasurer's office says they will withhold millions of dollars in revenue sharing if Detroit moves forward with the lawsuit.

Bing called an emergency meeting of City Council Monday.

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While meeting with reporters last Friday, Detroit Chief Financial Officer Jack Martin said the city could run out of money in one week if it does not receive refinancing from the state on schedule.

However, Martin also said that the city would probably be able to make payroll.

Detroit Mayor Dave Bing and Martin met with the media following a short special City Council session during which it was determined that any meeting would have to be held at a later date in order to avoid a violation of the state's Open Meetings Act.

"I think from a leadership standpoint, it's incumbent upon us as leaders to deal with this ASAP," says Mayor Bing.

The Mayor and City Council will now meet in a special session at 8:00 a.m. Monday.

Bing also addressed the media, saying his frustration level is "off the charts" because of recent developments in the city's financial crisis.

Earlier Friday Bing released a statement addressing the situation.

Over the past three weeks, I've had several discussions with the Corporation Counsel and the Detroit City Council, voicing my concerns about the ramifications of any legal challenge to the Financial Stability Agreement.

As recently as last Friday, I met with the Corporation Counsel to discuss the negative impact of the complaint she filed on my administration's ability to implement fiscal reforms necessary to move the City forward.  I informed her, the lawsuit is a distraction and would put the City's finances at great risk.

I appreciate Deputy State Treasurer Thomas Saxton's letter and share his concerns about the needless risk created for the City by the filing of the complaint, however, one point must be clarified.  The letter implies that, as Mayor, I can direct Corporation Counsel to stop the legal proceedings. This is not true under the 2012 Detroit City Charter. Section 7.5-209 of the Charter gives the Corporation Counsel the independent right to take whatever action she deems reasonable in her sole discretion, including judicial action, if she believes the Charter has been breached.

I have, in fact, urged Corporation Counsel to withdraw the lawsuit and her prior opinion about the Financial Stability Agreement.

The latest chapter of Detroit's financial crisis as kicked off Thursday when the Michigan Treasurer's told Detroit officials the city could lose the money if a lawsuit challenging the Consent Agreement between the city and the state to fix the Detroit's finances isn't dropped.

Bing, City Council and Gov. Rick Snyder approved the consent agreement in April. Martin was appointed under the agreement.

Detroit Corporation Counsel Krystal Crittendon recently filed a lawsuit asking a court to overturn the consent agreement.

We don't think there's any value in getting involved in the lawsuit. We hope that she drops it," says Mayor Bing.

In the letter from the state to the city, the state said that Bing could instruct Crittendon to drop the lawsuit. However, during today's meeting with reporters, Bing said that was not the case under the city's new charter.

Bing says that under the new charter, the Corporation Counsel had the independent authority to file the lawsuit. However, Bing also said he does not agree with the lawsuit at all.

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