Gov. Rick Snyder says he's not backing down, Detroit must find solution to cash problem

Published On: Jun 12 2012 03:10:56 PM EDT
Updated On: Jun 12 2012 04:54:15 PM EDT

DETROIT -

The clock is ticking in Detroit and unless something changes, the city could run out of money on Friday.

There was hope that Gov. Rick Snyder might step in and let Detroit off the hook.  But, the governor is now making it clear that he’s not backing down from his position and the city’s fate is in its own hands.

"The mayor and the city council and the corporate counsel are not on the same page and they need to get on the same page and resolve this issue," Snyder said Tuesday, speaking with Local 4 Business Editor, Rod Meloni.

The governor added that the consent agreement deal he cut with Detroit remains in place and stands behind the bluntly stated message the state deputy treasure sent to the city a week ago.

Thomas Saxton told the mayor and council in a letter, “Our position has been and remains that the city‘s claims have no merit and that the State of Michigan is not in default to the City of Detroit, at any level."

And, "It is unclear how one could conclude that a subsidiary of a sovereign state could nullify the power of the sovereign.”

Translation: The state has the money and the power in this situation.

"We did a good faith agreement to be a great partner as a practical matter and I thought we were working in partnership and part of the city government disagreed," Snyder said.

READ: Teaching Detroit's leader the golden rule

The governor was in Detroit speaking to automotive engineers working on the driverless car and he was far happier to look forward to new business challenges than the seemingly never ending one from the city.

In a conversation about the fate of the city, Rod Meloni asked the governor if he wished the city would drop the suit.

READ: Detroit lawsuit against Michigan Department of Treasury     

"That would be the best outcome because then we could all move forward,” Snyder replied.

And what would happen if they don’t?  

"There are consequences and that was outlined in the letter that the ability to do essentially what would be a takeout financing to allow the refinancing of some of the debt, and it can't be done unless the lawsuit is out of the way,” he added.

Snyder didn't want to answer the question of weather he might be looking at a list of emergency managers to prepare for that possibility. But, clearly the governor has to have someone in mind if the council and the mayor can’t get on that same page with the corporate counsel.

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