Detroit at risk of running out of money

Published On: Nov 13 2012 06:16:24 PM EST
Updated On: Nov 14 2012 09:47:52 AM EST

It's something many in the city have been reluctantly waiting to see happen. Will it?

DETROIT -

The city of Detroit could run out of money by the end of the year, unless state government frees up money the city borrowed earlier in the year.

Acting under the city's consent agreement with the state, Michigan Treasurer Andy Dillon is not happy with the city's progress in cutting costs and will not release the money until he sees better performance.

The threat of the city being unable to meet payroll has been heard before, as city employees union leader Ed McNeil told city council Tuesday.

"I heard we're running out of cash in October. I heard before we're running out of cash in September. I heard we're running out of cash in July," McNeil said.

City Council member Ken Cockrel feels Mayor Dave Bing is moving too slowly to control the city's budget, but he said the state seems to be acting unreasonably.

"To come in now and say we don't see enough progress, so we don't know if we're going to give you the money, that's kind of like moving the goal post. You can't tell me that the goal post is here and in the middle of the game move it back yards," Cockrel said.

Ed McNeil said the concessionary contracts union agreed to last year would have prevented the problems the city is facing now.

"The only answer at this point is to vet the mayor out and the people in Lansing out and you put in place what should have been put in place and the city of Detroit will be fine," McNeil said.

Detroit city council member Gary Brown disagreed. He said the city has to do more.

"We're going to have to reduce the number of city employees that are on the payroll and until that happens, we are not going to structurally fix this problem," Brown said.

  City Hall observers believe the mayor and city council will move quickly on several fronts to cut costs and get the state to release the money to allow the city to meet its payroll in December.

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