LANSING – The much-anticipated 11-bill package defining the state?s role in resolving the Detroit bankruptcy was submitted for introduction late this afternoon with a call for the state to provide $194.8 million from its Budget Stabilization Fund that would then be repaid through tobacco settlement dollars.
Under the legislation, a seven-member commission would be established to oversee the city?s finances for the next 20 years. The bills also would require the city to move all new employees to a defined contribution retirement benefit instead of the existing defined benefit system.
The Investment Committees proposed in Detroit Emergency Manager Kevyn Orr?s Plan of Adjustment that would exercise broad control of the city?s pension systems would be placed into statute under the legislation.
Additionally, the legislation would bar Detroit from opting out, as current law allows, from a requirement that governments cover no more than 80 percent of their employees? health insurance premiums with employees responsible for the rest.
?We will be introducing a 10-bill package that will address the city of Detroit and what has come to be called the Grand Bargain,? said Rep. John Walsh (R-Livonia) prior to the unveiling of the bills. ?It will reflect the state?s participation, potentially, in that Grand Bargain, and bringing the bankruptcy to an end and assure our taxpayers that if in fact we do make an investment that there will be some controls on that investment.?
The seven-member oversight committee would include appointed members from House speaker, Senate majority leader, the governor, the Detroit mayor and the Department of Treasury director. Mr. Walsh said there was at least one other official who would receive an appointee, but the Detroit City Council would not be included.
?(The) controls would be an oversight committee that would take a look at finances, budgeting, certain contracts, large contracts over $750,000,? he said. ?Additional oversight on pension boards, that?s the kind of controls that we?re looking at.?
Walsh said the commission would provide oversight for at least 20 years, but if there are periods of time where the city is in fiscal health, shown through various reports, then the commission could go dormant. He said if reports showed trouble, the commission would reactivate.
Walsh said the House Committee on Detroit’s Recovery and Michigan’s Future, which he chairs, could meet as soon as Tuesday, and would meet at least two to four times.
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