Could Detroit's financial woes kill annual fireworks show?

The City of Detroit is on the verge of financial collapse and it could affect Windsor, said one political observer in Canada.

Mayor Dave Bing says show will go on while one political observer and chamber of commerce say maybe not

Detroit's Finances and Windsor

10 years ago
Duration 2:00
Could Detroit's financial crisis affect Windsor?

The City of Detroit is on the verge of financial collapse and it could affect Windsor, said one political observer in Canada.

The state of Michigan is considering appointing an emergency manager to balance the cash-strapped city's books. That could mean the axe falls on bi-national events, said Cheryl Collier, a political science professor at the University of Windsor.

"There's not going to be a direct effect in our day-to-day lives. There are not a lot of partnership agreements or any kind of structural ties," Collier said.

Most cross-border issues and agreements are dealt with at the provincial, state and federal levels.

"The Detroit-Windsor border crossing is one for the most important in world," said Ben Erulkar, senior vice president of economic development at the Detroit Regional Chamber of Commerce. "Trade continues to grow and we need to take advantage of the border crossing. Co-operation on both sides can benefit everyone."

Erulkar said the appointment of an emergency manager is appointed, it won’t affect business and trade between Detroit and Windsor. Erulkar foresees no concerns about or the stalling of international projects should a state manager move in.

"But at the same time, there will be some impact on events we like to attract to the area and some things that benefit Detroit and Windsor," Collier said.

Collier said events like the annual Target Fireworks on the Detroit River, or the pursuit of the Red Bull Air Races, for example, could be in jeopardy if Detroit doesn't have the cash to pay for their share of the events.

"If you don't have financial commitment from the other side, or if they don't have the ability to kick in money or a co-operation agreement ... these things might be something of the past," Collier warned "I know there's a lot of people who like these events, but when you look at the financials it's those kind of perks that are probably going to suffer."

Detroit Mayor Dave Bing insists the fireworks will go on despite Detroit's financial woes.

A year ago, Detroit Mayor Dave Bing asked for "regional help" in paying for security for the annual fireworks show. Windsor chipped in $10,000.

Last week, Bing assured the show will go on in 2013.

"There has been no change in existing plans for the summer fireworks and other events jointly sponsored by the Detroit and Windsor communities," Bing's spokesperson Anthony Neely wrote in an email to CBC News.

However, if an emergency manager takes over, he or she alone will make the decision on how Detroit's money is spent. Bing and council will essentially be stripped of their powers.

According to the Downtown Windsor Business Improvement Association, the annual show costs $700,000 US, despite Target, which also opens in Windsor later this year, shelling out $1 million US to sponsor the event.

The business association last year launched the website and initially pledged $5,000 to the cause. Since the fall, the association says fundraising has been "slow." Another $210 has been added to the pot.

'We'd like to have parades, but on the list, where are they?'— Mark High, president of Cross Border Association

Collier said the issue of security for the event will likely be raised again this year while Erulkar said he isn't sure what the future holds for the fireworks.

Mark High is the president of the Canadian U.S. Cross Border Association and understands why the fireworks could find their way onto the chopping block.

"Certainly the manager will be focused on personnel, protection, police and fire. Yeah, we'd like to have parades, but on the list, where are they?," he said.

Dwindling population to blame

On Feb. 21, Michigan Gov. Rick Snyder described the city's predicament as "quite dire" and pointed to Detroit's massive loss of people since the 1950s. The city's population dropped from about 1.8 million then to just over 700,000 in the 2010 U.S. census.

With the decreased numbers of people, property and businesses taxes also have dropped.

"We need to grow the city of Detroit," Snyder said. "That's the answer here and it's going to be really hard. I want to make sure people understand how difficult this is going to be."

But he insisted that the situation is "solvable," if the city works with the state and an emergency manager if one is appointed.

Some people are already telling Snyder that they don't want the job of fixing Detroit's financial woes, even before he's decided whether he's even going to appoint an emergency manager, Snyder said.

The Republican governor made it clear Thursday during a media round table that he's still considering a review team's report that says Detroit is in a financial emergency, and that it would be at least another week before he makes a decision on whether to appoint someone to take over the city's financial reins.

Still, Snyder said his office has spoken to "a lot of people" about the possibility.

Asked during a short, one-on-one session with The Associated Press if any potential candidates for such a job had already declined it, Snyder responded: "Oh yeah. There were quite a few people who were in that camp. Because if you think about it, and this is not to imply we're going to do one, but it would be an extremely challenging position."

Challenging may be an understatement.

Bing has placed the city's current budget deficit at about $327 million. The report given to Snyder Tuesday by the state-appointed review team said the accumulated deficit as of June 30, 2012, would have topped $900 million if Detroit leaders in recent years had not issued bonds to pay some of its bills.

The review team also said that because of its cash deficit the city would have to either increase revenues or decrease expenditures, or both, by about $15 million per month between January and March to "remain financially viable."