House Introduces Detroit Bankruptcy Package

Posted on May 12, 2014 by Dene Westbrook

Late last week the House introduced a package of bills, House Bills 5566-5575, that seek to deal with the bankruptcy in the City of Detroit. The state will appropriate $194.8 million dollars that will go toward the city’s pension system.

In exchange there are a number of conditions set forth in the package. The bills create an oversight commission that will have approval over the city’s major financial decisions including contracts over $750,000 and collective bargaining agreements. Public Act 312 awards are also subject to review by the commission.

The legislation also requires the city to establish the position of chief financial officer. The bills require defined contribution plans for new hires and prohibits the City of Detroit from opting out under PA 152 of 2011.

The bills limit travel pay for retirement system board members. Additionally they prohibit new millages for the Detroit Institute of Art.

The bills very narrowly define eligibility for these provisions as a city over 600,000 that is in bankruptcy. Hearings begin for this package on Tuesday, May 13, and we expect they will move quickly through the legislature.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at [email protected]

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