Detroit council to consider pension budget amendment - DC News FOX 5 DC WTTG

Detroit council to consider pension budget amendment

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By Roop Raj
Fox 2 News


DETROIT (WJBK) -- Detroit's top money experts, the budget and finance directors, asked the city council on Tuesday to help put a bandage on a bleeding pension fund that they discovered was under funded.  It's the latest chapter in Detroit's own fiscal cliff.

"We're to a point now where I don't know that we can cut any more without really having a negative impact on services in the city, so there are things that we're going to have to do to change the trajectory," Mayor Dave Bing said by phone.

The mayor is in San Francisco as part of a bet he lost after the Tigers were defeated in the World Series.

The city itself is losing money, $84 million in the hole by June it's approximated.  The first step is to figure out a way to budget for the pension fund.  That's Wednesday morning.

"Many of these projects are worked on by the administration for weeks and months in advance, and then it's brought to council and they want us to vote on it in 24 hours when they've had 24 weeks, in some cases, to work on it," said council member Saunteel Jenkins.

The idea of furlough days has been tossed around as a way to save the city some cash, but City Council President Pro Tem Gary Brown said that's not a long-term fix.

"Furlough days allow employees to maintain health care and benefits, so you don't create the savings you do with layoffs, and as draconian as that sounds, that's the reality.  We have to save money, and furlough days we've already seen, at least on the surface, don't save us very much."

So what's next?  A group is being put together to tackle the financial crisis -- three members from the mayor's office and another three from city council.  The council meets Wednesday morning to vote on a pension budget amendment.  Then there's money the State of Michigan will release to Detroit, up to $30 million of bond money, if the city approves a contract to bring on the Miller Canfield law firm.  Many on council don't want the firm on board.  The mayor's office is encouraging them to approve it or the state may hold back that money.

"Hopefully council will be able to act up or down on the issues that we'll bring to the table, but we want to work collaboratively with council so that we can make the structural changes that are necessary," Bing said.

"The key for us right now is that we have to react, and that reaction really comes by us looking at furloughs and looking at layoffs," Deputy Mayor Kirk Lewis said.

Lewis claims the city is not at risk of losing money in the month of December. In fact, he thinks they have enough cash to last until the spring, but it's time, he feels, to find long-term solutions.

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