PA 76 allows local representatives to choose between a "consent agreement", an EM or to file for Chapter 9 Bankruptcy on their own without going through the state.
So there is some common sense left.
http://www.detroitnews.com/article/2...text|FRONTPAGE
After reading the article, it looks like my tax $'s are going to be wasted by the same bunch of non-yielding incompetents that got us here in the first place. Now my State $'s are going to be thown into the pit as well. Final score: Detroit-1, Citizens-0.Quote:
Originally Posted by 313WX
"But there's no option for none of the above! If the state just gave us the money, we wouldn't have any problems!" -- 90% of attendees at City Council meetingsQuote:
Originally Posted by 313WX
Seems quite reasonable to me. I've never followed the 'anti-democratic' argument. The entities have always had the choice to spend wisely or not. If there's a shortage of monies today, its primarily because of bad decisions yesterday. Actions must have consequences -- or your future will be full of poor choices. But ultimately, this act as described gives cities 'options' in how they want to deal with their problem.
Last I checked, Detroiters are still citizens of Michigan.Quote:
Originally Posted by Honky Tonk
That said, Detroiters are also sick and tired of being treated like estranged step children by the state for the simple fact that the state has a love-hate relationship with the city. Just because there's an emergency doesn't mean you can break laws to solve them. What if a doctor just cut off your right leg and left arm without your consent for the simple fact that he thinks he knows what's best for you? Would you allow that to happen?
The citizens of Michigan, especially those in Detroit, have spoken. Snyder and co. just wasn't expecting the overwhelming turn out from Detroit this past election.
That's fine too. I just don't have to keep paying into it and waiting for the "return" to happen.Quote:
Originally Posted by 313WX
I like the idea, and I hope that they appropriate money for expenses too. That way, it's referendum proofed.
This also throws the responsibility for the viability of the city on the city councils and mayors of the state, as it should. Now, it's going to be a "pick your poison" moment for Detroit. They have been dragging their feet for so long, that Snyder is willing to consider making municipal bankruptcy an option is very telling. Could be an interesting December and 2013.
That's mostly how I feel.Quote:
Originally Posted by 313WX
Whenever this topic gets brought up it never actually seems to be about fixing a financial crisis and more about putting "Detroiters" in their place. Whether that be posters here or hacks like Nolan Finley [[why does he still have a job BTW?)
The conversations have this strange, almost sexual, nature about them. Swallowing something nasty, getting the stick, bend over and be quiet.
It does beg the question why this wasn't crafted in the first place.
And I hate to beat a dead horse, but why is this being rushed through and the transit and scrap packages aren't being touched?
I feel those two would go just as far as improving quality of life as getting finances in order. But then again that's never what this thing was about.
It certainly will be. And knowing how this game's been played out in the past, I'm betting a shiny nickel that some of my fellow Detroiters are going to lament that the "state didn't help them out" when Chapter 9 forces deep cuts in their pensions.Quote:
Originally Posted by townonenorth
THAT'S what makes the situation so frustrating: the state is giving Detroit exactly what it wants, but almost has a Kevorkian-like ring to it.
If this passes, I expect Detroit will enter bankruptcy within 12 months. And the amazing thing is that I think that is the best outcome available!
Yet another 12 months of dysfunction. Detroit: Teflon City.Quote:
Originally Posted by mwilbert
Dismissing publicly elected officials isn't anti-democratic? in what dictionary?Quote:
Originally Posted by Wesley Mouch
However, this version of the EM law seems to keep the elected officials in the loop. I think it is a reasonable compromise. It would, of course, be better if the citizens would simply elect officials that aren't the petty fools that seem to keep getting on city councils across the state from Birmingham to Benton Harbor
They aren't dismissed until they've failed their citizens by financial abuse. The citizen retain their rights to democratic action via their county, state, and federal governments. 'Dismissing' their lowest level of government when its broke actual restores their rights taken from them by miscreants.Quote:
Originally Posted by rb336
Bankruptcy would be a chance to offer the bondholders the haircut they'd have been immune to under PA4. This way, it's fairer. I think Snyder went before the bondholders last year and said something like, "Don't worry about your investments." Now they may have to share the pain.
And, frankly, the rhetoric over PA4 sounded pretty fair in the beginning. Then you look at the way PA4 was being applied: Only to majority-minority communities. Other places that were in trouble got loans or help from Lansing. Now, the emergency manager law may have been one thing in theory, but when it is applied in a racist manner, maybe it's time to go back to the drawing board.
I don't expect the bankruptcy, if it comes, to end the dysfunction. It will probably make things worse in the short run, but we will get less-expensive dysfunction. What happens after that I have no idea.Quote:
Originally Posted by Honky Tonk
Quote:
Originally Posted by rb336
You don't need to dismiss any elected officials. You just take the checkbook out of their hands. They could still hold meetings, pass ordinances, make proclamations, resolve resolutions, posture pontifically, and run their mouths.
1) Allen ParkQuote:
Originally Posted by Detroitnerd
2) Maybe majority-minority communities have a problem. I only know Detroit -- and I sure they we do.
The corruption in Detroit, in theory, should weed itself out with the ongoing federal probe and what's happening downtown.
Incompetence, however, will be its biggest problem. See Dave Bing.
Yes, it's true: 95 percent white Allen Park was to get an EM. But they held off and hoped for the best on a millage vote, which was defeated last week. We'll see what happens.Quote:
Originally Posted by Wesley Mouch
The main point is that places like Flint, Benton Harbor and Pontiac got EMs appointed right away. In the case of BH, it was sneaky, as they appointed an EFM and then upgraded to EM with the passage of the EM law.
But when places in 97 percent white Livingston County are faced with problems, Lansing's cavalry runs to the rescue. Which strikes me as a double standard.
Yes, economic forces have ravaged places like Flint, Pontiac, Benton Harbor and Detroit. But laws that protect bond holders and allow undemocratically elected officials to go after unions and civic assets were judged by Michiganders to be an answer worth rejecting.
Let's be fair. Bring in all the parties and come to a solution where the pain is shared and the people retain a voice.
The Detroiters that are sick and tired have had about 50 years to sort the City out. When they started they all had both legs and arms; but now they only have one open hand and I don't want to help fill it because there's a hole in the middle. As far as [[not) letting it happen they have encouraged it by staying with the same "doctor" every time they've been given a choice, and there is zero indication that things will change.Quote:
Originally Posted by 313WX
I'm amused by this thread, all of the flailing about in the wind.
Democracy is a wonderful thing but unless you are able to print the money, you can't simply keep voting, year after year, to spend money you don't have and won't get.
It doesn't matter one iota whether you call what happens in Detroit an Emergency Manager, or a Financial Manager, or City Council, or Jesus Christ. Well, maybe that last one would make a difference, but he clearly wasn't into the whole money thing [[render unto Caesar and all that).
Detroit is flat [bad word]ing broke. Detroit spends, every single day, piles more money than it brings in or can bring in. The people who work for the City are in denial and have been for decades. Not too many months from now, Armageddon hits and pay is cut, people are laid off, whole departments are closed, and not a soul is going to give one half of a [different bad word] about the rants from the City Council when that happens.
I believe it was the Emperor Nero who behaved similarly in a similar situation.
This is all true.Quote:
Originally Posted by professorscott
There are essentially 5 different "Detroit" components in conflict:
- People who live here
- People who work for the city
- People who lent money to the city
- People who are retired and receiving city pension/medical benefits
- People who were elected to represent the city
They're not all going to make it through this, and it's going to be ugly. It doesn't matter whether or not we go through an EM or a bankruptcy judge. Both entities will likely look to the restructuring work done as per the city/state agreements done yesterday and use them as a model to help guide the process. I think an EM will be faster and far less expensive [[leaving more money on the table for everyone to work with), but I know a bankruptcy process will also solve some of the political dynamics that poison the process.
I'm actually optimistic for two reasons:
[[1) When the bankruptcy court starts really dropping the hammer, it might might motivate a last-second deal among all the parties. Maybe.
[[2) Either way, Detroit emerges from the whole thing with restructured major debts and having shed tons and tons and tons of needless expense. The process might take 5 years, but still...5 years ain't nothin. We've been waiting for this day 30+ years. What's 5 more years, especially, as local leaders get their asses handed to them in the process.
Finally, for people with economic power and secure jobs, start hoarding cash. It's going to be bargain basement time for a few years while we're stripping away all this excess cost structure.
From the perspective of an investor, Detroit has 3 major risks: [[1) Crime, [[2) Uncertainty, [[3) High Costs and Low Services. As department after department gets totally decimated, people who have the resources to deploy capital and resources quickly and efficiently will replace a bloated city government. Uncertainty will gradually be replaced with certainty. High Costs and Low Services will be replaced with Low Costs and Low Services. The only major risk left will be crime, and we have already proven that with enough resources, can quickly become a non-issue.
The end result out of all this 10 years from now will be healthier Detroit with all the weeds pulled and good, healthy soil from which to grow. In the process you will piss off thousands of retirees [[many of whom no longer live in Michigan), many of the citizens [[many of whom are already pissed anyway), all the elected officials [[who deserve to go down with the ship), and tons of lenders.
Everyone will lose in different degrees, including me and my family, who have financial ties to the city's solvency...but you will have completely destroyed the political culture that has held the city back for decades. Is it worth it to go through 5 years of wanton destruction, including 60-70% unemployment in order to be able to finally start over and build a healthy city?
Well...a) we don't have a choice, it's gonna happen either way...and b) Yes. Totally worth it.
Nothing's going to change for a LONG time, other then lawyers involved with this are going to get richer from the drawn out court battles. People who chose to dig in for the long term are the ones going to get hurt, as property values and personal safety continue to decline. Of course, you can always continue to keep sinking your money into the Detroit Phoenix that's going to rise out of the ashes, one day, maybe.Quote:
Originally Posted by corktownyuppie
Important note to investors: invest for income...investing for capital growth is an iffy proposition.Quote:
Originally Posted by Honky Tonk
Agreed.Quote:
Originally Posted by Honky Tonk
But boy...you better be in for the long haul [[and only invest downtown) or you will be sorely disappointed.
FWIW, I think most investors are aware of that.Quote:
Originally Posted by corktownyuppie
As far as investing for income in anticipation of this new Detroit, one will still have to come to terms that they're going to be losing money for a while, whether they're renting out property or running a small business.
Really? I don't disagree that you're seeing that in some parts of the city, but I'm curious if that's true everywhere that I haven't been looking. In Corktown, you can buy a place for 8x annual gross rent, and with interest rates where they are right now, you can get a 20+% cash-on-cash return. And that's even with a 15-year mortgage and a 20% down payment. Numbers get even better with a 30-year mortgage. I'm not trying to be a slappy to inflate property values, but I'm just saying that at prices I'm seeing around here, you're definitely in the ballpark of nice bargains.Quote:
Originally Posted by 313WX
But outside designated renaissance zones [[Corktown may be one), there comes the factors of taxes and insurance [[not to mention scrappers).Quote:
Originally Posted by corktownyuppie
I'm sure you're far more knowledgeable than me about the finances, but I know there's a reason much of the property in Detroit still remains unsold, even with the low prices and interest rates.
Well, betting that legal processes will take a while and that lawyers will make money from them is safe. But you should see changes in the city's cash flow position rather quickly--if nothing else the city would probably immediately stop paying interest and principal on its billion dollars of GO debt.Quote:
Nothing's going to change for a LONG time, other then lawyers involved with this are going to get richer from the drawn out court battles..
Well I agree. There's a reason you can't give much of the property away. At this point, I'd say 70-80% of the property is only a bargain if you have the kind of money where you can develop an entire block at a time [[eliminating blight) and provide your own private security [[eliminating crime). The odd thing is that reality is becoming more and more possible as property devalues.Quote:
Originally Posted by 313WX
The other 20-30% of the property is truly bargain basement for those familiar with the neighborhoods. Could be that I'm living in the ivory tower, but I don't know of a single vacant or abandoned home in the historic part of Corktown. Nor am I aware of any incident of scrappers stealing copper, though, again...could be that I'm just unaware. There's no question that there's a difference between driving around 7 and State Fair vs. Michigan and Trumbull, though.
Detroit is such a bizarre city to analyze real estate. You could write a whole book on it for a college course.