|Gary Brown||President Pro Tem|
|Kenneth V. Cockrel Jr.||Member|
On October 26, 2011, Detroit City Council President Charles Pugh closed a council meeting between the council and Detroit Mayor Dave Bing. He said he closed the meeting to avoid panic about the meeting's subject: Detroit's possible impending insolvency. His action, however, may have violated the Open Meetings Act.
The city is considering filing for bankruptcy. The Mayor, Dave Bing, is proposing a $3.1 billion annual budget, which would increase casino taxes but would cut public employee's health care and pension benefits in an effort to close the city's $200 million budget gap. Council President Pro Tem Gary Brown says the city is expected to run out of cash by April, but may not be able to meet payroll as early at December.
City officials said they will lay off hundreds of workers in addition to putting some on unpaid leave to stave off increased state oversight. Mayor Dave Bing and top officials outlined plans to lay off 400 to 500 employees over the next two to three months in all non-revenue generating departments, including police and fire, exempting beat officers.
2014 Pacific Research Institute report
In January 2014, the Pacific Research Institute, a California-based public policy organization, issued a report on the largest Chapter 9 municipal bankruptcies across the United States as well as other municipalities facing financial straits. The municipalities included in the report are Detroit, New York City, Harrisburg, PA, Stockton, CA, San Jose, CA, and San Bernardino, CA. According to the report, Detroit is insolvent due to economic decline, financial mismanagement, and unfunded pension liabilities. The city’s total debt and long-term obligations were estimated at $18 billion as of January 2014. This was 7 times larger than the city’s $2.5 billion municipal budget. Detroit’s economic decline has included 78,000 unoccupied homes and an estimated 50% of the city’s 305,000 properties not paying any tax, as well as continued decline in the property and income tax bases.
Public employee salaries
- See also: Detroit employee salaries
Detroit's Water and Sewerage Department (DWSD) will be eliminating four out five jobs, or 81 percent of its work force as a result of a city consultant's evaluation. In the past decade the department has doubled its rates to cover the cost of labor, and the city is hoping cutting these jobs will save $900 million. In total it would cut jobs from 1,978 employees currently to about 374. The city used twice the number of employees per gallon of water compared to cities like Chicago.
It was also made public in the report that the DWSD still employs a horseshoer for $29,245 in salary and about $27,000 in benefits. According to a construction contract manager, DWSD has a blacksmith shop in our Central Services Facility and the horseshoer position was transfered there.
- See also: Michigan public pensions
The Detroit Pension Fund has reported losses of $480 million since 2008. Recently, the pension fund came under scrutiny for spending $30 million renovating a building which is worth $1 million.
According to a report published at Northwestern University in 2010, Detroit is one of the ten municipalities with the largest amount of unfunded pension liabilities. Nationwide there is $574 billion in unfunded pension liabilities for local pension plans, and this is in addition to the $3 trillion in debt facing state-sponsored pension plans. The report states that the pension plans could be out of money as early at 2025.
(number of plans)
|Liabilities, Stated Basis, June ’09 ($B)||Liabilities (ABO), Treasury Rate||Net Pension Assets ($B)||Unfunded Liability ($B)||Unfunded Liability / Revenue||Unfunded Liability per Household ($)|
Ronald Zajac and Paul Stewart, former pension officials for the city of Detroit, were indicted by a grand jury in a bribery and kickback scheme that the U.S. Attorney's office said involved more than $200 million in Detroit pension fund investments. Four people have now been indicted in the suspected pension scheme, the U.S. Attorney's office said. The others were investment sponsor Roy Dixon and former treasurer Jeffrey Beasley, a fraternity brother of Kilpatrick's.
Public records requests
Ex-Detroit Mayor Kwame Kilpatrick's computer has gone missing. Both Kilpatrick and city officials have been unable to locate the computer. The city has admitted that even if the computer is located, e-mails are purged on a weekly basis by the city. The city's practice ignores the recommendations of the Department of Technology, Management, and Budget to modify and store pertinent e-mails.
|Transparency grading process|
- See also: Evaluation of Michigan city websites
- Budget documents are posted.
- City Council meeting agendas are posted.
- City Council members have complete contact information.
- Telephone contact details are posted on some department webpages for some officials.
- Audits are online.
- Permit forms, building codes, and zoning details are posted.
- Public records request forms are available for some individual departments.
- Items currently out to bid are available.
- Income tax details are posted. Property taxes may be paid online. Tax rates are included within budget documents.
- City Council meeting minutes are not posted online.
- Information about the dates, times, and locations of City Council meetings is not clearly posted.
- No contact information for public records requests is provided.
- There is no information on current vendor contracts.
- No information on city funded lobbying efforts is available on the Web site.
- Official City of Detroit website
- Detroit Regional Chamber of Commerce
- Detroit Public Schools
- The Detroit News
- Detroit Free Press
- Forgotten Detroit
- USA Today "Motor City population declines 25%," accessed October 19, 2011
- U.S. Census Bureau "U.S. Census Bureau Delivers Michigan's 2010 Census Population Totals, Including First Look at Race and Hispanic Origin Data for Legislative Redistricting," accessed October 19, 2011
- Detroit Free Press "Mike Duggan sworn in as mayor of Detroit," January 1, 2014
- Official City of Detroit website "City Council," accessed November 10, 2011
- Detroit Free Press "Charles Pugh defends Detroit City Council's closed-door meeting with Mayor Dave Bing," accessed November 10, 2011
- National Review Online, The Next Crisis Will Come from the States, Sept. 29, 2010
- Wall Street Journal, Detroit Moves Against Unions, April 18, 2011
- MLive, Gary Brown: Detroit could run out of cash in December, plan must include layoffs, Nov. 18, 2011
- Reuters, Detroit eyes layoffs, other actions to avoid state control, Dec. 7, 2012
- Pacific Research Institute "Going Broke One City at a Time: Municipal Bankruptcies in America," January 10, 2014
- Detroit Free Press, Detroit water department to cut 81% of workers under new proposal, Aug. 9, 2012
- Michigan Capital Confidential, No Horses, But Detroit Water Department Employs 'Horseshoer', Aug. 20, 2012
- Detroit Free Press, Detroit pension fund spends $30 million to fix $1-million building, Dec. 27, 2010
- MacIver Institute, City of Milwaukee Pension a Ticking Time Bomb According to Northwestern Study, Oct. 12, 2010
- Reuters, Two Detroit pension fund officials indicted, March 20, 2013
- Detroit Free Press, Kilpatrick ordered to testify about his e-mails, Dec. 2, 2010
- Budget Department
- Council Calendar Events
- City council
- Office of the Auditor General
- Buildings Division
- Public Records
- Income Tax Division
- Property Tax