Bloomberg News

Detroit Finance Study Team Closed Sessions Barred by Judge

February 15, 2012

(Updates with state official’s comment in 11th paragraph.)

Feb. 15 (Bloomberg) -- A Michigan judge permanently barred a review team studying Detroit’s finances from holding closed- door sessions, handing a legal victory to city employees.

Michigan Governor Rick Snyder, a Republican, appointed the 10-member group in December after a preliminary study by the state treasurer found the city was in “probable financial stress.” The financial review team is considering whether Michigan’s largest city needs an emergency manager.

Ingham County Circuit Court Judge William Collette last week issued a temporary restraining order barring closed-door sessions after a union official claimed they violated Michigan’s open-meetings law. Collette made the order permanent at a hearing today.

The first foundation “of this society is that we have an open government,” Collette said today. “To meet in private is to meet in private.”

Robert Davis, an official with a union that represents city employees, sued Snyder, the treasurer and the review team, saying the group is required under Michigan law to hold meetings open to the public.

“This is a big victory for democracy,” Davis, who is staff representative of the American Federation of State, County & Municipal Employees, said in an interview after the hearing.

Emergency Manager

If the panel declares a financial emergency, the governor may appoint a manager with sweeping powers to fire people, sell assets, void union contracts and assume authority over the mayor and city council.

The Detroit finance study group isn’t a public body as defined under Michigan’s Open Meetings Act and isn’t governed by that law, Michelle Brya, an attorney for the state, told the judge at today’s hearing.

“The review team only makes recommendations,” she said. “The governor has options” on implementing the findings, she said, adding that no reports had been made by the review team.

“How do people know that if everything is private?” Collette asked.

Michigan’s Treasury Department and the Snyder administration are reviewing today’s ruling and consulting with the state attorney general “to determine appropriate next steps that will help ensure the fiscal and academic health and wellbeing of our communities and schools,” Terry Stanton, a spokesman for the Treasury Department, said in an e-mail. “The financial review team’s work will continue in accordance with the Open Meetings Act.”

Highland Park

Detroit Mayor Dave Bing and unions representing most city employees have reached tentative accords on concessions aimed at avoiding a state takeover. The agreements are pending ratification by union membership.

The mayor and the firefighters union continue to negotiate over concessions. Bing and Snyder have said they want to avoid an emergency manager.

Davis also sued over a separate review team, appointed to study the finances of the schools of Highland Park, which neighbors Detroit.

Collette today said in court that the review team considering Highland Park public schools also violated the open- meetings law, and he voided all of that team’s actions, which led to the appointment of an emergency manager.

Stanton said the state doesn’t believe Collette’s order erasing the review team’s actions would affect Snyder’s appointment last month of an emergency manager for Highland Park’s schools.

‘Only Basis’

“That’s not what the law is,” Andrew Paterson, Davis’s lawyer, said in an interview. The team’s recommendation “was the only basis the governor used to appoint an emergency manager,” he said. By erasing the Highland Park review team’s actions, this removed the governor’s right to appoint an emergency manager, Paterson said.

“The Highland Park School District is in a severe fiscal crisis that only will further jeopardize the district’s students and families and get worse without continued state support and assistance,” Stanton said. “The district has already needed two advances in state aid to avoid payless paydays, and the Michigan Department of Education expects yet another request for additional hardship funding.”

The case is Davis v. City of Detroit Financial Review Team, 12-112-CZ, Circuit Court, Ingham County, Michigan (Mason).

--With assistance from Chris Christoff in Lansing, Michigan. Editors: Stephen Farr, David Glovin

To contact the reporters on this story: Steve Raphael in Detroit at sraphael5@bloomberg.net; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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