Judge rules in Detroit financial review case

By Tim Martin

Associated Press

MASON, Mich. (AP) -- A state-appointed review team analyzing the city of Detroit's finances should meet publicly, a judge ruled Monday, a legal setback for Gov. Rick Snyder's administration that may leave the review team's process in limbo.

Ingham County Circuit Judge William Collette issued a preliminary order barring the review team from meeting unless it complies with the state's Open Meetings Act. Collette said that in his opinion the review team has more authority and scope than an advisory committee, making it subject to the state's open meetings law.

Snyder's administration has argued that state-appointed review teams analyzing finances of local governments and schools aren't public bodies and aren't subject to the Open Meetings Act. Michigan Department of Treasury officials say that's been their interpretation for more than 20 years.

Treasury officials and a spokeswoman for Snyder, Sara Wurfel, said they were "disappointed" by the ruling. The Snyder administration said it will meet with the state attorney general's office to determine their next steps in the case.

It wasn't immediately clear how the order might affect the 10-member review team's work or timeline. The Detroit review team is expected to report back to Snyder before the end of the month. Snyder then would decide whether an emergency manager is needed to help fix the city's finances.

Detroit officials are trying to avoid the appointment of an emergency manager.

"Today's injunction does not stop the review team process, it simply means that review team meetings must be open, unless or until the court rules otherwise," the Treasury department said in a statement.

The lawsuit was filed by Robert Davis, a Highland Park school board member and union staff representative with AFSCME Council 25. He says the Detroit review team violated the Open Meetings Act by meeting in "secret." Davis filed a similar suit related to the appointment of an emergency manager in Highland Park schools, but Collette did not grant a request for an injunction in that case because the review team's work is already done.

Further hearings in both cases are expected next week. Davis plans to argue that the actions taken by the Highland Park review team should be invalidated because the review team violated the Open Meetings Act.

Emergency managers are in place in the cities of Benton Harbor, Ecorse, Flint and Pontiac along with public school districts in Detroit and Highland Park.

The lawsuit is just one way opponents are trying to slow down or derail a state law that was altered last year to give emergency managers sweeping new powers. Managers now have the authority to strip power from locally elected leaders and toss out union contracts in some cases.

The Sugar Law Center for Economic and Social Justice sued over the emergency manager law in June, saying it violated the state constitution. Snyder has asked the Michigan Supreme Court to fast-track the case so it isn't hung up for years in the appeals process. The Supreme Court has not yet decided whether it will review the case early.

Other opponents are gathering voter signatures to try to force an election aimed at repealing the revised law, known as Public Act 4. If enough signatures are collected to make the ballot, the law could be suspended while waiting for the November election.

Collette noted that financial review teams can negotiate and sign consent agreements with local governments, issue subpoenas and exercise other powers.

"This certainly goes far beyond what an advisory committee-- in my opinion, based on what I have seen -- would do," Collette said.

The judge said that allowing the Detroit review team to meet without complying with the Open Meetings Act would "fly in the face" of the law.

Andrew Paterson, an attorney for Davis, said the ruling was a victory for the public.

"That's kind of the whole reason why the Open Meetings Act exists," Paterson said. "If people do things in secret, everyone's suspicious."

Published: Wed, Feb 8, 2012