Detroit City Council Considers $475K-A-Month Contract

DETROIT (WWJ) - Detroit City Council is taking a closer look at the city's six-month contract with the Jones Day law firm. That's the legal team being paid $475,000 a month helping to restructure the city.

Council members on Wednesday heard from Ed Keelan, who's a member of that Washington D.C.-based firm.

Councilman Ken Cockrel is concerned about the money being spent on this by the city.

"We have all these consultants that have been brought in a this point and, if this contract is approved, this will be another one," said Cockrel. "And, frankly, I'm not really clear who's riding herd on all of these consultants; who's keeping track of where they're at in their respective work."

"And I'm surprised to hear Mr. Keelan say that they've already undertaken some assignments," he said. "Are we to assume that that work -- since this contract has not been approved yet -- that the work that they have done thus far is going to be pro bono?"

Keelan says no -- the firm will be billing for work completed so far.

"In their view, they needed to get started on March 15th, and their preference would have been to start well before that," Keelan said. "There's a lot to do, and they have the resources to do a lot in nine months, or three months, or one month. That's why they started on March 15th with my encouragement  knowing full well that the contract had to be approved, and they run the risk of some problems if it doesn't get approved."

So, what is it exactly this firm been up to?

Keelan said they're basically surveying the full operation of the city of Detroit, including all its challenged, assets, and liabilities.

"Basically, all the thing that have been of concern to the people around this table for the last two or three years," Keelan said. "How do we make do with fewer resources?

"After phase two, we expect to be in a position to evaluate whether we can restructure without the need of going into Chapter Nine [bankruptcy] or the debt reorganization process, or not," he said. "And that may sound like a simple question but it's very complicated."

Another issue raised Tuesday was a potential conflict of interest: The city's emergency manager, Kevyn Orr, left that firm to work in Detroit.

Jones Day was one of five or six firms who were contacted about the job.  City Council will vote on the contract next Tuesday.

Detroit is deeply in debt and has a budget deficit exceeding $200 million.