The City Council of Detroit on Wednesday passed a financial consent accord with a vote of 5-4. The agreement gives Detroit the power to slash costs and void contracts but not to provide state loans or funding to relieve the city of its financial problems.
By signing the agreement, state and city officials avoided a deadline set for Thursday to save the city that is being threatened by financial insolvency and the possible takeover of the city government by the state of Michigan.
Both Rick Snyder the Governor of Michigan and Dave Bing the Mayor of Detroit consented to the agreement. Bing is currently recovering from a stay in the hospital and was represented by Kirk Lewis the deputy mayor who signed off on the deal.
The city council was being attacked from both sides. The unions and public did not want the state deal, but if they rejected it the state could step in and take all its powers away. If the governor had named an emergency city manager, they all would lose out.
Detroit has been pushed into deep financial problems because for years businesses and the population have declined causing the tax base to shrink. A recent estimate had the city bank accounts down to just $21 million at the end of the week.
