Detroit City Council delays vote on law firm contract; could lead to cash crisis in December

The Detroit City Council voted last week to delay a vote on one of two key contracts the state said the city had to approve to avoid running out of cash by next month, throwing into doubt whether the state will release funds the city needs to meet payroll and pay other bills.

The city’s top lawyer, Krystal Crittendon, told the council she could not recommend approving the contract because of concerns including whether it’s a conflict of interest.

Specifically, Crittendon said the $300,000 contract for the law firm Miller Canfield, which Mayor Dave Bing has hired to advise him on the city’s financial stability agreement matters, could pose a conflict because the same firm wrote the so-called milestones agreement laying out reform benchmarks the city must meet in order to be able to get bond-sale proceeds — $10 million this month and $20 million in December.

It wasn’t immediately clear how the council’s 8-1 decision to table the contract would impact the city’s ability to get funding the Bing administration says it must have to avoid going broke.

The city’s program management director, William (Kriss) Andrews, who spoke in favor of the contract at the council meeting, left immediately after the vote.

Asked if the council’s vote put the city at risk of a cash crisis in mid-December, Andrews said: “I would think so, yes.”

“We have to see,” Andrews said. “Right now, we haven’t met one of the milestones of the agreement.”

The milestones agreement is a series of reforms the Snyder administration wants the city to meet in the coming months. The governor’s office wanted the city to approve a contract extension for the financial firm Ernst & Young, which the council approved earlier today, as well as the Miller Canfield contract.

Terms of the milestones agreement were released earlier this month at a meeting of the Financial Advisory Board, a city-state group that has major sway over city finances. Bing and the Snyder administration agreed to the plan, but contracts must be approved by the council.

Whether the council’s tabling of the Miller Canfield contract — an object of heated discussion for months, with the Bing administration refusing to make its details public — will indeed mean a default is not immediately known.

The advisory board meets again Dec. 10.

Bing’s office issued a statement this afternoon about the council’s action:

Click Here for full Article

Print Friendly, PDF & Email

Leave a Comment