Snyder expected to announce plan to guard Detroit pensions, DIA art

5:13 AM, Jan 22, 2014   |    comments
Onlookers pass the Ceres Terra Cotta by Francois-Joseph Duret owned by the City of Detroit at the Detroit Institute of Arts. (Courtesy: Andre J. Jackson/Detroit Free Press)
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LANSING, Mich. (Detroit Free Press) -- Gov. Rick Snyder and legislative leaders reached an agreement today on the framework for a deal to help protect Detroit pensioners and the Detroit Institute of Arts collection from ongoing bankruptcy proceedings, sources told the Free Press, and he is expected to make an announcement Wednesday.

Talks with individual lawmakers on a funding package that could amount to $350 million over 20 years were expected to continue Wednesday morning. But Snyder hoped to be able to announce a deal in the afternoon, before leaving for a two-day trip to Washington, D.C., sources said.

Snyder and the leaders of the House and Senate agreed today on the outline of an agreement they could take back to their caucuses to gauge support, according to three sources familiar with the talks.

Snyder is expected to hold a Lansing news conference related to Detroit on Wednesday.

Snyder, a Republican, earlier proposed a state commitment of about $350 million over 20 years, lawmakers said after briefings on Jan. 15. That would roughly match the $330 million in commitments already made by national and local foundations under a plan brokered by Chief U.S. District Judge Gerald Rosen, who is acting as a mediator in the historic Detroit bankruptcy case.

No details of the potential agreement were released and Snyder's announcement Wednesday may be short on details, a source said. Officials have been reluctant to discuss details because mediation talks overseen by a federal judge are confidential.

Snyder met with House Speaker Jase Bolger, R-Marshall; House Minority Leader Tim Greimel, D-Auburn Hills; Senate Minority Leader Gretchen Whitmer, D-East Lansing; and Senate Majority Leader Randy Richardville, R-Monroe, Snyder spokeswoman Sara Wurfel confirmed.

"We're having ongoing dialogues and discussions on a regular basis," Wurfel said. "About Detroit, stay tuned. An announcement is coming."

Greimel said, "We're interested in continuing discussions and dialogue and seeing if there might be a way to protect the retirees, while putting in place safeguards to make sure Detroit makes better financial decisions moving forward."

He added: "There is a possibility of an announcement this week, but that would come from the governor's office."

The state money would come from the state's tobacco settlement fund or some other source not tied to annual tax revenues. That way, the ongoing money could be approved once and would not require an annual appropriation.

Democrats are generally supportive of the proposal, which is seen as a tougher sell among Republican lawmakers who hold the majority in both chambers of the Legislature.

Whitmer "remains encouraged by these discussions," said spokesman Bob McCann.

Richardville had not had a chance late today to discuss the meeting with his GOP caucus, but that opportunity could come Wednesday morning, spokeswoman Amber McCann said. She said she had heard Snyder would like to make an announcement Wednesday.

Bolger had no details about the meeting to announce today, spokesman Ari Adler said.

Snyder met around lunch time with what's known as the Quadrant - Richardville, Whitmer, Bolger and Greimel.

Any deal is intended to help protect Detroit retirees from cuts to their pensions as part of a bankruptcy settlement and avoid a sell-off of art at the city-owned DIA. As part of the deal, the DIA would be spun-off from city control into an independent nonprofit.

The DIA also is widely expected to contribute to the rescue fund, but the specific terms - including the overall total and time frame - remain in negotiations in the Rosen-led mediation. Figures as high as a $100 million over 20 years have swirled as a possible target for the museum, but DIA leaders have rejected those numbers as not feasible, given its commitment to raising hundreds of millions of dollars in endowment funds over the next decade, plus $12 million annually for operations.

Some lawmakers have said they want greater public access to DIA artwork around the state, and greater state control over how Detroit's General Retirement System is managed as part of any agreement involving state money.

"I'd like to expose more people to that culture throughout the state," Richardville said last week. "I would cheer that kind of effort."

Under any deal, "the state is going to have some say-so," Sen. Mike Kowall, R-White Lake Township, said last week.

Several lawmakers have been skeptical about the idea.

"If I'm going to put money into this, I'm not going to put money into something else." Sen. Roger Kahn, R-Saginaw, chairman of the Senate Appropriations Committee, said last week. "The case hasn't been made."

A deal would have to be approved by U.S. Bankruptcy Judge Steven Rhodes, who is handling the case.

On Wednesday, Rhodes is to consider a motion by a group of creditors to establish an independent committee to assess the value of the DIA's property, a potential step toward the sale of art to help reduce Detroit's debt.

DIA officials released a statement today rejecting an idea floated in some news media reports that the museum consider charging admission to residents of Macomb, Oakland and Wayne counties. The DIA promised free admission in exchange for passage of the tri-county property tax passed in 2012 that funds the museum.

"Under no circumstances will we alter the free general admission policy," the statement said.

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