Detroit's Chief Financial Officer says Detroit will go broke in 1 week; state threatens takeover

Published On: Jun 08 2012 10:17:21 AM EDT
Updated On: Jun 08 2012 10:58:46 PM EDT

Jack Martin, Detroit's Chief Financial Officer under a consent agreement with the state of Michigan, said Friday the city would run out of cash within a week if the state withdraws $80 million in revenue sharing.

DETROIT -

Jack Martin Jack Martin, Detroit's Chief Financial Officer under a consent agreement with the state of Michigan, said Friday the city would run out of cash within a week if the state withdraws $80 million in revenue sharing.

"We're looking at a week from today, June 15, I think, would be the day," Martin said.

What is at stake

Detroit's City Attorney is suing to stop Detroit from entering into a financial stability agreement with the state of Michigan. The claim is that Michigan is in default to Detroit and that the state has not paid the city enough in shared revenue for years. It's to the tune of hundreds of millions of dollars.

The state of Michigan wants the lawsuit pulled immediately because of bond financing. The state floated Detroit $80 million to refinance bonds. Jack Martin said the city has already spent $35 million from the fund.

The state is threatening to send in an emergency manager. That's something Gov. Rick Snyder said he wants to avoid but will have to if the city can't settle on an agreement.

Meeting postponed

An emergency meeting between Detroit Mayor Dave Bing and City Council was postponed Friday, because Council members said not enough notice was given ahead of time and they were concerned about violating the open meetings act.

"If we were sued based on having a meeting that was not properly noticed, I would get in trouble, not mayor Bing," said City Council President Charles Pugh. "I am very fond of mayor Bing but I am not going to jail for him."

Detroit Mayor Dave Bing Detroit Mayor Dave Bing scheduled the meeting Thursday evening.

He said his frustration level was "off the charts."

"I never anticipated that it would be this difficult to get things done," Bing said. "It's really, really tough. When you start adding fuel to the fire like this, it doesn't help us from an administrative standpoint at all and it's no good for the city."

Bing released this statement Thursday night, but did not respond to interview requests.

"My team is working closely with the state to mitigate any negative impacts on my administration's plan to financially stabilize the city," the mayor's statement read. "We want this matter resolved expeditiously for the sake of the citizens of Detroit."

What happens next

The meeting has been rescheduled for Monday morning.

Related:

State to Detroit: Drop lawsuit or lose money

Detroit Mayor Dave Bing

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