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Detroit council OKs measures tied to release of bond funds

DETROIT (Reuters) - The Detroit City Council on Tuesday approved measures that the state of Michigan has tied to the release of $30 million of bond funds for the cash-strapped city.

The measures included a controversial contract with law firm Miller Canfield to work on issues related to a consent agreement that gave the state some oversight of Detroit's finances. The council had rejected the contract last month citing alleged conflicts of interest by the law firm and concerns over the contract's legality.

Other measures receiving council approval included contracts for auditing services, and for specific audits to uncover potential worker's compensation fraud and to determine dependent eligibility for city benefits.

Mayor Dave Bing thanked council members for their votes and reiterated that he is working to avoid the appointment of an emergency financial manager by the state.

It was not clear if the council's actions would win the release of money raised from a bond sale earlier this year or if it would affect Michigan Treasurer Andy Dillon's plan to start a 30-day review process as soon as Tuesday that could lead to an emergency manager for Detroit.

A spokesman for Michigan's Treasury Department did not immediately respond to a request for comment.

(Reporting By Eddie B. Allen Jr., additional reporting by Karen Pierog in Chicago)

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