CHICAGO — Detroit Mayor Dave Bing on Thursday publicly raised the specter that perhaps only a state-appointed emergency manager will have the tools necessary to solve the long-troubled city’s financial woes. He left the door open to the possibility of taking on the role.
In a closed-door meeting with City Council members, and later Thursday with local reporters, Bing warned that the city could run out of cash by February unless unions agree to deep cuts and that Michigan may soon be forced to appoint an emergency manager.
An emergency manager would have the power to amend or break labor contracts. Current labor contracts expire next June.
In a statement issued late Thursday, Bing said the city’s financial condition is “extremely serious.”
“The last thing I want is for Detroit to be run by an emergency financial manager, whether it’s me or someone else,” he said. “We must address pension and health care costs and inefficient services that have been broken for many years.”
Bing’s comments come as the administration is negotiating with its public employees over health care and pension costs, which the mayor said are too costly for the city. Pension and medical contributions are on track to eat up 50% of the city’s operating budget by 2015 without changes.
The only way to avoid an emergency manager is for the unions to agree to about $100 million in retirement and medical benefit cuts this year, Bing said in an interview with the Detroit Free Press.
“This is not a ploy,” the mayor said. “If we don’t get this done, we’ll have to get an emergency manager. We don’t have a choice. We’ll be out of money.”
He added that he would be willing to take the job if Gov. Rick Snyder asked him. “I don’t want to be an emergency manager, but I came here to help the city, and if I was asked, I would consider taking the job,” he told the Free Press. Michigan’s expanded EM law gives the state greater power to intervene in local governments.
Junk-rated Detroit already meets several of the triggers. The state can appoint an emergency manager or craft a consent decree with local officials. Both options allow for the modification or termination of labor contracts.
Bing’s comments appeared to infuriate some City Council members, who said the mayor had not yet cut enough to offset the city’s estimated $200 million deficit.
“The City Council will support smart, tough decisions, but we need the mayor to show leadership on this issue,” council President Charles Pugh said. “We should be talking about bold ideas — an emergency manager is the last thing we should be talking about.” q
Last April, when Bing unveiled his 2012 spending plan, he warned City Council members that a state takeover was inevitable if his budget proposals were not implemented.