Detroits budget is springing more leaks than the Edmund Fitzgerald, and may lead to a very similar fate. Yet Mayor Kwame Kilpatricks most recent proposals arent going to patch those holes any time soon.
Three months into the fiscal year, Kilpatrick is finally acknowledging that the citys 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 havent materialized. Thats a big reason why the citys 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.
The citys 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 Kilpatricks warnings that unless the unions that represent the citys 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 citys lease with the Detroit & Canada Tunnel Corp., whose deal with the city runs through 2020.
Tunnel Corp. General Manager Neal Belitsky wouldnt discuss his companys deal because of a confidentiality agreement signed by both parties. But city Auditor General Joe Harris says hes 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. Thats 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 doesnt make sense to me. Im not going to stand here and tell you its baloney, Im just going to tell you I dont understand.
Without a deal signed, City Council Fiscal Analyst Irv Corley Jr. says its 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 hes urged council members not to vote on the amendment until a copy of the renegotiated lease agreement can be analyzed.
If the tunnel savings dont come through or if City Council doesnt pass the amendment then the administrations 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. Were still in the land of playing budget roulette, Cockrel says.Send comments to [email protected]