Judge Dismisses Challenge to Consent Agreement in Detroit

By Rick Pluta

A judge in Ingham County has dismissed a legal challenge to the consent agreement between the state and Detroit on fixing the city’s finances. Ingham County Circuit Judge William Collette said Detroit’s corporate counsel did not have the right to file the lawsuit over the objections of Detroit Mayor Dave Bing. Bing says he hopes the ruling puts the issue to rest and the decision is not appealed. Michael Hodge argued the case on the mayor behalf. He says that could have forced the city into bankruptcy as soon as the end of the week.

“The judge understood that financially the stabilization agreement between the city and the state was an essential agreement to go forward and to continue to address the financial issues involving the city," Hodge said. 

“This ruling says that we made the right decision, and that we need to get on with running the city. The city is still in a crisis, and we can’t have all of these distractions and think that we’re going to bring the city back,” Bing said.

Bing says the ruling means state payments to the city will not be frozen, and Detroit will be able to make a loan payment that is due Friday. That will also be the first meeting of a financial advisory board that will provide oversight to city spending decisions.

Governor Rick Snyder’s administration said the lawsuit cast doubt on whether the city was eligible to receive its next revenue sharing payment. The governor says he’s pleased with the ruling because it ends confusion over the city’s abilities to pay its debts.

“So I view that as a positive development. I mean, we didn’t believe it was a valid lawsuit to begin with. It’s good to see progress there, and during this entire time, from the state perspective, our team has been working to fulfill our side of the agreement in good faith,” said Snyder.

Detroit Corporate Counsel Krystal Crittendon argued the agreement is not valid because the state owes the city millions of dollars. The judge’s decision does not address the question. The state Treasury says Detroit is not owed any money.