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Officials warn Detroit running short on cash--again

A top Detroit appointee says the city is once again in danger of running out of money.

Program management director William "Kriss" Andrews told Detroit’s financial advisory board Monday that without state help or other adjustments, the city will run out of cash in December.

Andrews says that fate can be avoided, though. Detroit has bond money sitting in an escrow account controlled by the state.

But Andrews says state treasurer Andy Dillon will only release the money if he thinks Detroit is meeting certain benchmarks.

“It requires joint action by the administration, the City Council...And some elbow grease," Andrews aid.  "We need to work hard to make this happen. And people need to work together.”

Andrews says the state has outlined terms in a so-called “milestone agreement.”

One of those terms: the City Council must approve two big contracts:one with the financial firm Ernst & Young, the other with law firm Miller-Canfield.

Council member Andre Spivey says he expects those will be a "bone of contention."

Spivey said the impression that those firms-especially Miller-Canfield--had a hand in negotiating the city's consent agreement with the state, has raised some questions about their ongoing role.

Spivey didn't rule out approved the contracts, but said "We need the public to know everything is above board. And I think that to have some transparency is key.”

The Council is set to vote on those contracts next week.

Some people at the meeting questioned whether that consent agreement—and the financial advisory board—are still valid at all, since voters overturned Michigan’s emergency manager law.

City and state officials insist that both remain intact.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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