The City of Detroit's top lawyer says the consent agreement entered into last month between the state and city is illegal.
The effect of the opinion is unclear, but it could put the agreement between the state and city over Detroit precarious finances back before a court.
In a letter to Gov. Rick Snyder that was obtained by the Free Press, Krystal Crittendon, the head of the city's Law Department, says that state law and the city charter prohibit the city from entering into any contract with entities that owe outstanding debts to the city.
The letter says the state owes the city $4.75 million for a 2010 water bill and $224 million in state revenue sharing, positions that have been advanced for months by City Councilwoman JoAnn Watson, among others.
State officials dismissed the letter, saying Michigan does not owe money to Detroit, and the letter provides no rationale for undoing a consent agreement voluntarily approved by the City Council and Mayor Dave Bing.
Speaking to reporters at an event Thursday morning, Bing said "absolutely did not" authorize Crittendon to send the letter to state officials.
Bing said he was informed the letter was being sent, but he was emphatic that he did not approve it or authorize it.
Asked who had authorized the letter, Bing said, "somebody on City Council," but he said he did not know who.
State Treasurer Andy Dillion rejected all of Crittendon's arguments.
"From both a legal and common sense perspective, the (consent agreement) is a valid and enforceable contract, and necessary for Detroit to begin to move forward," Dillon said in the letter. "Because the city voluntarily entered into the agreement, and all the facts cited in your letter as the basis for it being void and unenforceable were known to you and the city at that time, we must assume the claim made in your letter is based upon some sort of misunderstanding."
