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Consent Agreement

Consent Agreement

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Published by webteam2410

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Published by: webteam2410 on Apr 05, 2012
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04/05/2012

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FINANCIAL STABILITY AGREEMENT
WHEREAS, the City of Detroit (the “City”), like many industrial cities throughoutthe United States, has experienced a prolonged period of economic change stretchingover several decades which has eroded the quality of life of the City’s residents andbusinesses; andWHEREAS, the City currently confronts daunting challenges characterized bypersistent and systemic fiscal imbalances and deficit conditions, aggravated by thedeterioration in revenues received from property taxes, income taxes, interest earnings,utility revenues, and intergovernmental revenues resulting from the recent seriousrecession in the U.S. and Michigan economies; by the growth in the City’s legacy costsconcurrently with the City’s diminished ability to carry such costs; and by the difficulty inrapidly restructuring the City’s operations so as to bring short-term and long-termexpenditures in line with current and projected revenues; andWHEREAS, a financially stable and vibrant City is important as a catalyst for theState of Michigan’s overall image and success in economic development, businessattractiveness, quality of life, and a host of other factors; andWHEREAS, fundamentally changing the City’s current trajectory can restore thequality of life which families, businesses and visitors have a right to expect and enjoy;andWHEREAS, the City, through the Mayor and City Council, seeks to pursue thislong-term vision by achieving, first, financial stability for the City, and, second, asustainable and stable platform for growth ensuring the City's financial integrity in amanner that enables the City to grow, prosper and thrive; and
 
 
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WHEREAS, the People of the State of Michigan have required the establishmentof the Department of Treasury as a principal department of state government underSection 3 of Article V of the State Constitution of 1963 (the “Treasury Department”) andprovided that the State Treasurer, a constitutional officer appointed by the Governorwith the advice and consent of the Michigan Senate (the “State Treasurer”), shall serveas the head of the Department, which is vested with responsibilities related to localgovernment finance, budgeting and administration under state law; andWHEREAS, the City is a political subdivision of the State of Michigan organizedas a body corporate under Act 279, Public Acts of Michigan, 1909, as amended, theHome Rule City Act (“Act 279”), with the People of Detroit having created and providedfor their continuing control of the municipal government of the City by adopting a HomeRule Charter of the City of Detroit (the “Charter”), and the People of the State ofMichigan conferring comprehensive home rule power to the City through the StateConstitution of 1963, subject to the limitations on the exercise of that power contained inthe Constitution or the Charter, or imposed by statute;WHEREAS, the Treasury Department desires to undertake jointly with the Cityefforts for the betterment of the residents of the City and the State of Michigan (the“State”) as a whole through the adoption of this Financial Stability Agreement (this"Agreement"); andWHEREAS, as a commitment to the long-term cooperative process establishedin this Agreement, the Mayor and the City Council desire to authorize and performcertain initial restructuring actions detailed herein with the Treasury Department; and
 
 
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WHEREAS, the City is in need of specific and targeted operational and technicalsupport and consultation in such areas as information technology, payroll andaccounting, financial recordkeeping and reporting, internal controls, data managementand analytics, enterprise application implementation, actuarial analysis and benefitsmanagement, State and federal grant management, revenue assessment andforecasting, and other areas; andWHEREAS, this Agreement contains the terms and conditions authorizing acooperative undertaking between public agencies for efficiently restructuring the City'soperations and tackling the City's systemic issues and accumulated deficit with thegoals of (i) ensuring that the City remains a safe and secure environment whereresidents and visitors can live and work, (ii) promoting the delivery of quality, efficient,and effective public services to residents and businesses, and (iii) creating a civicculture and environment that attracts as well as retains investment, businesses, jobsand new residents to the City and the State; andWHEREAS, approval of this Agreement is intended to reaffirm the role of theCity’s executive and legislative branches under the Charter in the development of thestrategy, policies and long-term vision of a revitalized City; andWHEREAS, under this Agreement the City and the Treasury Department agreeto jointly exercise powers relating to public finance, budgeting, and administration thatthey share in common and that each may exercise separately, including, but not limitedto, the powers, privileges and authorities of the Treasury Department to protect thecredit of the State and municipalities in the State, and to aid, advise and consult with themunicipalities with respect to fiscal questions and certain other matters under Act 34,

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