The authority that will oversee the disbursement of $195 million of state money to Detroit’s pension funds if the bankruptcy restructuring plan is approved is holding its first meeting at 9 a.m. Friday.
We’ll have updates from the meeting. Meanwhile, here’s some background:
The Michigan Settlement Administration Authority was created as part of the “Grand Bargain” legislation, specifically House Bill 5575. Rep. Fred Durhal Jr. (D-Detroit) was its sponsor. It exists to pay the $195 million to the city’s retirement systems when (if) Judge Steven Rhodes approves the city’s Plan of Adjustment to exit bankruptcy. The authority, according to the statute that created it, dissolves on May 2.
Members of the Authority are State Treasurer Kevin Clinton, State Budget Director John Roberts and I. William Cohen, who was a senior partner at Pepper Hamilton, one of the law firms advising Detroit in the bankruptcy case, before he retired in 2009. Gov. Rick Snyder named Cohen to the Authority last month.
We’re back in open session after the roughly 40-minute closed session. Members said they were discussing a “written memorandum of legal advice.”
The authority adopted a motion to limit public comment to 5 minutes at future meetings.
And we’re adjourned.
These are the reasons a public body, such as the new Authority, may go into a closed session (as printed in the handbook) with comments on the likelihood today’s session relates to each reason.
(1) To consider the dismissal, suspension, or disciplining of, or to hear complaints or charges brought against, or to consider a periodic personnel evaluation of, a public officer, employee, staff member, or individual agent, if the named person requests a
Note: As this is the first ever meeting of this Authority, this seems nearly impossible as the reason for this closed session.
(2) For strategy and negotiation sessions connected with the negotiation of a collective bargaining agreement if either negotiating party requests a closed hearing.
Note: The statute creating the authority does not explicitly give it the power to negotiate contracts. Also, the city has reached collective bargaining agreements with its unions as part of the bankruptcy process. The latest was with police and fire unions. Earlier this year, a coalition representing about 3,500 other city workers agreed to terms.
(3) To consider the purchase or lease of real property up to the time an option to purchase or lease that real property is obtained.
Note: This in no way relates to the authority’s mission.
(4) To consult with its attorney regarding trial or settlement strategy in connection with specific pending litigation, but only if an open meeting would have a detrimental financial effect on the litigating or settlement position of the public body.
Note: Ah, OK. As we’ve noted below, Steven Howell is in the closed session. He’s an attorney with the Dickinson Wright firm, but he’s been part of the bankruptcy trial, representing the state of Michigan. As the city’s trial — technically a confirmation hearing on the Plan of Adjustment — is ongoing, perhaps this is the reason. Although with the vast majority of creditors no longer objecting to the plan, it’s unclear how much state strategy is needed. On another note, pending litigation remains challenging the state’s emergency manager law, although some of it goes away per the terms of the Grand Bargain.
(5) To review and consider the contents of an application for employment or appointment to a public office if the candidate requests that the application remain confidential. However, all interviews by a public body for employment or appointment to a public office shall be held in an open meeting pursuant to this act.
Note: The authority has no employees.
(6) To consider material exempt from discussion or disclosure by state or federal statute. But note – a board is not permitted to go into closed session to discuss an attorney’s oral opinion, as opposed to a written legal memorandum.
One of the people still in the room is Steven Howell. He’s an attorney with the firm Dickinson Wright, representing the state of Michigan. He’s been involved in Detroit’s bankruptcy case, appearing during the ongoing trial.
It took the new Authority about two minutes to go into a closed session (that means members of the public, including media) were kicked out. Staff from the state Attorney General’s office stayed in the room. The only thing the panel did before they “closed the door” was to appoint a secretary and discuss the process for posting meetings.