Ingham County Court to hear from Mayor’s law firm and city attorneys on merit of ‘consent agreement’ #TellUsDetroit

DETROIT (Tell Us Det) – Legal challenges from Detroit’s city attorney, who is supported by a radical wing of City Council, has had a negative impact on the city’s bond ratings in the credit market.

Tuesday downgrades announced by the Fitch and Moody’s ratings agencies were not totally unexpected, said Mayor Bing’s Chief Operating Officer, Chris Brown. “Although the administration sought to avoid this, the downgrade is, in part, a consequence of the legal challenge of the Financial Stability Agreement between the City and the State.”

The Mayor’s office has hired Miller Canfield, a local law firm familiar with the consent agreement with the state,- to file a motion to intervene against the city’s corporate council, Krystal Crittendon, who is expected to file her request today in Ingham County Circuit Court, for an expedited decision on whether the consent agreement is legal.

In a letter released by Crittendon, she said claims that her request for a judge to decide whether her findings are valid jeopardizes the city’s financial future are “nonsense.” She laid the blame for the impasse over her legal challenge at the feet of the private law firm, Miller Canfield, that Bing hired to handle the consent agreement and the bond deal with the state.

Crittendon’s letter also says she was duty-bound to investigate these concerns, at the request of councilwoman JoAnn Watson, who many feel is behind this firestorm, felt that the state’s debts to Detroit invalidated the consent agreement.

In a statement obtained by Tell Us Detroit, the Mayor claimed Crittendon exceeded her authority under the city charter and reiterated that the lawsuit puts the city’s finances at serious risk.

Tuesday morning, Gov. Rick Snyder told the media, Detroit is in a “crisis” and if the city runs out of money, he’s prepared to step in to protect the city and state. Snyder went on to say that if the agreement is breached, there are a “variety of steps” to follow through on.

“If (city officials) fail to perform their part of the agreement or they have issues where they don’t perform, I will take action.”

Council President Charles Pugh, who believes the state is bluffing said, “You don’t put the city at risk of not being able to pay police officers, firefighters and scaring the hell out of citizens saying we’re going to run out of cash. That’s irresponsible, and it makes me angry because we didn’t have to get to this point.”

In April, following the signing of the Financial Stability Agreement, the general credit community, including Moody’s, viewed the consent agreement “credit positive” and as a result, reduced the City’s near-term risk of bankruptcy. Now the city’s bonds are viewed as junk.

“Ultimately, we are working to restore our financial reputation with the rating agencies by stabilizing the City’s finances,” said Brown.


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