Detroit’s top lawyer advised city officials that they could still hold the state in default for $224 million in disputed revenue sharing — even though they had been told in 2006 by another city attorney that they had no legal claim to the money, according to secret documents released Friday.
The issue of the state being in default would be crucial to Detroit’s case should the city try to stop the consent agreement with the state — a possibility City Council President Charles Pugh would not discount.
Pugh was the council’s lone vote Friday against releasing a privileged legal opinion from the city’s Law Department chief challenging whether the April 4 consent agreement between the city and state is legally binding.
The document says Councilwoman JoAnn Watson requested the Law Department explore the validity of the agreement and whether it violated the city charter. Watson couldn’t be reached for comment after the meeting.
Pugh said he voted to keep it secret only because Krystal Crittendon, the city’s corporation counsel and the document’s author, requested it remain confidential.
As the Free Press first reported Thursday, Crittendon sent Gov. Rick Snyder a letter informing the state that the consent deal is “void and unenforceable” based on her legal opinion that was kept secret until Friday.
“Politically, I think we should have released it first — that we should have fired the first shot to explain” why city officials are concerned about whether the consent agreement violates state and city laws, Pugh said Friday.
But exactly what’s so legally sensitive about Crittendon’s analysis remained unclear. The city long has argued that the state owes it money. And city officials have expressed concerns publicly that the consent deal — preventing, for now, the appointment of an emergency manager but giving the state broad oversight of the city’s finances — could violate the city charter and state law on how cities govern themselves.
Crittendon wrote that, in addition to the revenue-sharing funds, the state owes Detroit $4.75 million for a water bill from a broken main at the state-owned Michigan State Fairgrounds and $300,000 for 600,000 unclaimed property claims being held by the state.
But Crittendon also acknowledged at a meeting last week — and attached as an exhibit — a 2006 opinion by John Johnson Jr., the city’s former law chief, that Detroit “does not have a legally enforceable claim against the state for the difference in amounts of revenue sharing actually received and the $333,900,000 initially provided in 1998 … as there is no clear legal duty incumbent on the state to provide the $333,900,000.”
Council members, Mayor Dave Bing and city attorneys met last week in the closed session to discuss Crittendon’s findings. It was at the meeting where it was discussed and decided that Crittendon send a letter to Snyder informing him that the consent agreement is void based on the state owing the city money.
On Thursday, Bing said he did not authorize the sending of the letter. But some council members told the Free Press that the mayor made it clear he approved of sending the letter.
Earlier Friday, Bing seemed to retract assertions that he did not approve of sending the letter. Bing conceded at an event in Birmingham that he had supported it.
But “when we look into the legal ramifications, I don’t think we have the capacity to get into a lawsuit and still concentrate on fixing the city,” Bing said. “There’s a signed consent agreement in place, and we’re moving forward with that.”
His statement came during the Pancakes and Politics forum that also featured and the county executives of Wayne, Oakland and Macomb counties: Robert Ficano, L. Brooks Patterson and Mark Hackel, respectively.
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