News Column

Detroit Mayor Says City Won't Run Out of Cash

Oct. 12, 2012

Matt Helms

Mayor Dave Bing insisted Wednesday that Detroit will avoid running out of cash later this year as his reforms pick up speed, but he acknowledged dissatisfaction with slowed progress on fixing the city's dire finances.

Bing said during an hour-long interview with Free Press reporters and editors that he wants to:

--Have an outside vendor perform payroll services at a savings of $11 million a year.

--Send letters to those who owe city taxes from as far back as 2006.

--Continue to meet with state lawmakers to push through legislation for a public lighting authority.

--Work with the City Council to approve a state lease of Belle Isle.

"We're a fighting population, and we don't give up, and I hope people don't give up at this point," an occasionally animated Bing said of Detroiters.

Bing defended his administration, saying the city's deep-rooted problems were more than he or any one mayor could expect to resolve smoothly.

"A lot of the things that we inherited were a reflection of 30 or 40 years of not doing what needed to be done," Bing said. "For anybody that had expectations that in a three-year period there was going to be significant change, the expectations were misguided."

His comments came two days after the joint city-state financial advisory board, which has significant sway over Detroit's fiscal matters under the financial stability agreement, warned that Detroit risked running out of cash by year's end because restructuring of city government has been far slower than expected.

Detroit must meet crucial reform goals before the state releases more than $80 million in bond revenue now in escrow. Board members said Monday that they're concerned the city isn't making enough progress, particularly with savings from reduced employee health care not kicking in until Jan. 1.

Bing conceded as much but said his administration believes a cash-flow crisis will be avoided, despite huge challenges.

For one, the state's emergency manager law faces a crucial test Nov. 6, when voters decide a referendum on it. Equally difficult, he said, is opposition from the city's unions, a lack of cash to upgrade outdated technologies and low morale in battered city departments that have endured pay cuts, furloughs and work force reductions.

"I've not tried to promise people too much," Bing said. "We've got to work through this, and I think we've set a foundation that we are going to take forward with all the initiatives and the improvements that we're making, and hope people will believe in us and say that things are going to change. But it's not going to happen overnight."

Residents weary

The city's troubles weigh on residents such as Olivia Hazziez-Shakoor of northwest Detroit, president of the Crary St. Mary's Community Council.

She said there are too many vacant properties owned but not maintained by the city, crime is high and streetlights are out. Yet she said all she hears coming out of City Hall is word about cuts to workers and departments and not enough about finding new revenues.

"I don't think you can cut the people in Detroit and balance the budget on the backs of people who've stayed here for years," she said. "I think you need to be creative in finding other ways of financing, and that I haven't seen."

She was hesitant to place too much blame on Bing, but said, "I'd like to see better."

In the wide-ranging interview:

--Bing said it's crucial that the council and the state Legislature work cooperatively to implement his initiatives, including setting up an independent authority to take over the city's troubled lighting department. Legislation setting up the authority has been stalled in Lansing, but Bing said he believes there could be action on the issue in the next couple of weeks.

That may be optimistic.

State Sen. Bert Johnson, D-Highland Park, said he's not expecting much movement on either the public lighting measure or, separately, legislation to create a regional transit authority to oversee a new, four-county rapid-transit bus system until after the election.

"Once the election has come and gone, there will be more of an appetite to get things done before year's end," Johnson said.

--Bing said he was surprised and disappointed by the level of union opposition to his moves to pare city government, including outsourcing management of the city's bus system and transferring the public health and work force development departments to independent agencies.

--Changes at the Police Department, including 12-hour shifts, will dramatically reduce overtime and make it easier to have more officers on the streets around the clock, Bing said. He also said he's fine with conducting a national search for a replacement for former Police Chief Ralph Godbee Jr., who retired this week amid a sex scandal. But he also said the next chief could come from within the department.

Hopeful for Belle Isle

Bing also said he was optimistic that he'll be able to overcome council opposition to the Belle Isle lease issue and eventually run it as a state park, freeing up $6 million a year. Council members objected to the length of the lease -- 30 years, with two optional 30-year renewals -- and a lack of guarantees that the state will spend millions it pledged for improvements.

Council President Charles Pugh said Wednesday that he was fed up with Bing blaming the council when "we feel like there's not much of an effort to work with us."

"We feel like the mayor's wasting a lot of time by working around us and not with us," Pugh told the Free Press. "The man needs to do his job and stop blaming us and everyone else."

Despite the heated words, Pugh said he's encouraged by signs of progress and he remains "a huge cheerleader for Mayor Bing."

"And you know why? If he's successful, the city moves forward," Pugh said. "I want to make that very clear. But it's not my job to be a rubber stamp."

Bing deflected questions about whether he would run for re-election next year, despite widespread talk of the potential candidacy of Mike Duggan, the Detroit Medical Center CEO and former Wayne County prosecutor. State Rep. Lisa Howze, D-Detroit, has filed to run.

Bing dismissed criticisms from Duggan, who in Sunday's Free Press accused Bing of damaging relations with unions and not doing enough to reverse Detroit's financial decline.

"If you haven't been there, you don't know," Bing said of critics such as Duggan. "I thought when I came in from the outside that I could do things relatively quick."

More Details: Bing says city is making strides

Detroit Mayor Dave Bing said he's encouraged that, despite roadblocks, his administration is showing that it can make change on a number of fronts. Among the top achievements Bing's administration touted Wednesday:

--Savings from employees' 10% pay cuts, work rule changes -- including 12-hour shifts for police -- and lower health care and pension costs are expected to save the city $60 million in 2012-13 and $102 million a year thereafter.

--Higher income tax collections this year -- up $6 million compared with 2011-12 -- as the administration goes after individuals who don't pay their taxes and businesses that don't deduct taxes from employee paychecks. The administration said there's as much as $250 million in unpaid taxes by Detroit residents who work outside the city and people who work in Detroit but live elsewhere. The city has assigned six additional employees to go after delinquents, and it expects it will collect even more money following an upgrade to the city's income tax system technology next year.

--The city has much more work to do in getting more police officers out of desk jobs and onto street patrols, but the department already has redeployed 60 officers to patrols by centralizing some costly timekeeping functions. Deputy Mayor Kirk Lewis said the city has reduced its runs for burglar alarms by 87% by implementing the alarm verification system earlier this year.

--Bing cut the city's recreation department budget 43% and needed to fill an $8-million annual budget gap. With financial support from individuals, civic foundations and businesses, Bing said he has raised $15 million toward a goal of $24 million to provide recreation activities for the city's young people and seniors during the next three years.

--Despite criticism from transit advocates who say the city's bus system isn't improving, Bing says the city has shaved $14 million off its annual bus subsidy while making the service more reliable and efficient and expects more of its management and operation to be privatized in 2013.



Source: (c)2012 the Detroit Free Press Distributed by MCT Information Services


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