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Appeals court clears way for Detroit's pact

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By Ben Klayman | Reuters – 5 hrs ago

DETROIT (Reuters) - The court of Appeals in Michigan has cleared the way for a governor-appointed team to come up with a consent deal to keep the city of Detroit, which could run out of money in months, financially afloat.

The court late on Friday reversed an order from earlier in the week that questioned whether the team - facing a deadline on Monday - could meet in private and barred it from issuing a recommendation until a hearing set for March 29.

The review team, appointed by Governor Rick Snyder, has until Monday to issue recommendations to repair Detroit's crumbling finances, the result of a steep population drop, sinking revenue and a huge debt load.

Once the recommendations are issued, Snyder has 10 days to act. The 10-member team, which includes State Treasurer Andy Dillon, is slated to meet Monday afternoon.

If a consent agreement is not reached, the state could cut off revenue-sharing funds or appoint an outside emergency manager to run Detroit.

A spokeswoman for Snyder said the administration was "thankful" the appeals court had allowed the review team to work toward a resolution of the financial crisis.

"Resolving this crisis in a timely matter is crucial for the residents of Detroit," Geralyn Lasher, Snyder's spokeswoman, said in a statement.

Snyder, who has said repeatedly that he does not favor the option of appointing an emergency manager for Detroit, was to return on Saturday from a trade mission to Europe.

Detroit and Michigan state officials continued negotiations on Saturday on how to come to grips with the city's finances, according to a city spokesman, who declined to say when they might reach a deal.


Opponents of any kind of state takeover of the city were disappointed.

"We obviously are still very, very concerned about state occupation of Detroit," Rainbow Push Detroit President Reverend D. Alexander Bullock said. "I'm worried that now there will be a top-down, paternalistic approach to public policy that will displace the Democratic process."

Andrew Paterson, an attorney for Robert Davis, a local school board member and union activist who challenged the financial review team in court, said: "We will review this hastily issued order and will be considering our legal strategy."

Detroit's long-term liabilities are estimated to top $12 billion, while the city's annual budget is put at around $3.1 billion.

Both Fitch Ratings and Moody's Investor's Service slashed the city's ratings and said more cuts were possible as the city and the state of Michigan struggle to agree on a plan to avoid the city running out of cash.

On Friday, roughly half of Detroit's unionized public employees accepted pay cuts and other concessions to save $68 million a year, actions that a spokesman for Snyder said did not go far enough to address the city's long- and short-term troubles.

The agreements announced on Friday did not include Detroit's police and fire unions, which also had tentative deals.

Detroit, Michigan's biggest city, has faced hard times for decades and is expected to run out of cash within months as a result of a huge debt load, a steep population drop and sinking revenue.

Long synonymous with the U.S.-based auto industry, "Motor City" was once home to nearly 1.9 million people in the 1950s, and now has a population of about 714,000, shrinking its revenue base With the U.S. auto industry's contraction, the city lost 25 percent of its population between 2000 and 2010.

http://www.rainbowpush.org/ <----- Rainbow PUSH Coalition


"I want to take this opportunity to mention how thankful I am for an Obama re-election. The choice was clear. We cannot live in a country that treats homosexuals and women as second class citizens. Homosexuals deserve all of the rights and benefits of marriage that heterosexuals receive. Women deserve to be treated with respect and their salaries should not depend on their gender, but their quality of work. I am also thankful that the great, progressive state of California once again voted for the correct President. America is moving forward, and the direction is a positive one."

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