making quick cash in a city

Nolan Finley

Nolan Finley Column: Detroit nearing a cash crisis

Here's what Mayor Dave Bing and Detroit City Council members didn't want anyone to know when they met behind closed doors in late October to discuss a still unreleased $1.7 million report from Ernst & Young on the city's finances: They're a lot worse than we thought.

Detroit is fast running out of cash. Already, roughly half the city's vendors aren't being paid each month, City Hall sources say, and some are waiting 18 months for their checks.

By late December, the acute cash flow problem may mean Detroit won't be able to fully cover payroll. And by April, it will be out of cash.

Gov. Rick Snyder hasn't accepted the deficit reduction plan the Bing administration submitted last summer because the numbers don't add up. Without approval, the city can't sell bonds to finance much-needed water department projects, or to get the Woodward light rail project started.

The budget gap pegged at $155 million last spring may now be twice that.

So what are the mayor and council doing with the cold, hard facts presented at that October meeting? Squabbling.

Icy relations between the 11th and 13th floors of City Hall are again standing in the way of swift and decisive action to avert a financial catastrophe.

Bing had been meeting with certain council members for weeks on a plan to cut spending, but those members felt sand-bagged when he announced he'd be open to having Gov. Rick Snyder appoint him as emergency manager.

Snyder isn't going to do that. And it's not necessary at the moment anyway.

The mayor and council ought to be able to resolve this themselves. Some on the council have been pushing the mayor to immediately lay off 1,500 city workers, including 500 cops and 300 firefighters. It is a painful choice, and one Bing is resisting out of public safety concerns, but it is likely to be unavoidable.

City unions have stonewalled the mayor on his demand for more concessions, and so far he has not acted on the September deadline he set for them to comply.

Newsalert: Detroit nearing a cash crisis

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