Detroit’s budget is springing more leaks than the Edmund Fitzgerald, and may lead to a very similar fate. Yet Mayor Kwame Kilpatrick’s most recent proposals aren’t going to patch those holes any time soon.
Three months into the fiscal year, Kilpatrick is finally acknowledging that the city’s not meeting its budget, although he favors referring to the shortfall not as a deficit, but as a “gap.” Union pay cuts and health care concessions that were supposed to be in place by July 1 still haven’t materialized. That’s a big reason why the city’s still spending about $13 million a month over its budget. Kilpatrick presented an amendment to council Sept. 27 that was supposed to start closing the “gap.”
In theory.
The city’s dire cash flow situation (with $116 million in the bank, cash will be tight by December, warns Chief Financial Officer Sean Werdlow) is old news by now, as are Kilpatrick’s warnings that unless the unions that represent the city’s workers are ready to deal, layoffs will ensue.
Documents submitted to council with the amendment spell out $139 million in budget “challenges” that must be dealt with. But the remedies Kilpatrick outlined are far from becoming a reality.
The single biggest proposal is a major new source of funding: $20 million in revenue from renegotiating the city’s lease with the Detroit & Canada Tunnel Corp., whose deal with the city runs through 2020.
Tunnel Corp. General Manager Neal Belitsky wouldn’t discuss his company’s deal because of a confidentiality agreement signed by both parties. But city Auditor General Joe Harris says he’s not sure how the administration plans to parlay the renegotiation of a lease (said by Deputy Mayor Anthony Adams to be worth $600,000 a year) into $20 million in revenue.
“The lease expires in 2020. That’s 15 years,” Harris says. “Paying $600,000 a year, times 15 years, is $9 million. How do they get $20 million from that? Just like so many other things in that plan, it doesn’t make sense to me. I’m not going to stand here and tell you it’s baloney, I’m just going to tell you I don’t understand.”
Without a deal signed, City Council Fiscal Analyst Irv Corley Jr. says it’s misleading for the administration to include the tunnel renegotiation in a plan designed to help balance the books. And to list the amendment as a given without council approval, Corley says, is presumptuous. Corley says he’s urged council members not to vote on the amendment until a copy of the renegotiated lease agreement can be analyzed.
If the tunnel savings don’t come through — or if City Council doesn’t pass the amendment — then the administration’s plan to eliminate the budget gap will be thrown even further out of whack.
Councilmember Sheila Cockrel says she and her colleagues have other questions that must be answered before council can vote on the amendment. For starters — the specifics of how layoffs and cuts in service would affect residents. “We’re still in the land of playing budget roulette,” Cockrel says.
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