In December, The D Runs Out of Cash

**michimoby** · November-13-12, 05:59 AM

http://www.freep.com/article/2012111...-may-get-even-

In somewhat related news, you all may want to brush up on this topic:

http://www.uscourts.gov/FederalCourt.../Chapter9.aspx

**Honky Tonk** · November-13-12, 07:49 AM

"Councilman Andre Spivey, who attended the meeting Monday, said he's still not sold on the Miller Canfield contract."

They should hire the same firm they've been hiring for years, Dewey, Cheatum, & Howe.

**313WX** · November-13-12, 08:23 AM

Originally Posted by michimoby

http://www.freep.com/article/2012111...-may-get-even-

In somewhat related news, you all may want to brush up on this topic:

http://www.uscourts.gov/FederalCourt.../Chapter9.aspx

Actually, I'm glad you posted that link to Chapter 9 BK.

Even based on the MSM around here, most people don't know how a Chapter 9 BK works.

**dmike76** · November-13-12, 10:53 AM

EFM! Oh wait....prop 1 was foolishly voted down.

**gameguy56** · November-13-12, 11:10 AM

Originally Posted by dmike76

EFM! Oh wait....prop 1 was foolishly voted down.

A bankruptcy judge supposedly would be pretty similar, I'm guessing.

**jt1** · November-13-12, 11:22 AM

Kind of unrelated but I'd really like to know what benefit William [[Kriss) Andrews brings to the table. I believe that he is making either 250K or 400K per year [[paid by the city) and the total output has been his statements that the city is running out of money. Supposedly he is overseeing the city's restructuring but it appears nothing has changed.

They can pay me $50 and I can produce about as much as 'Kriss' has.

**jt1** · November-13-12, 11:23 AM

Granted, I don't have the bang up resume he does. I know that his work at Energy Conversion Devices really speaks volumes about his ability and worth

**313WX** · November-13-12, 11:25 AM

Originally Posted by dmike76

EFM! Oh wait....prop 1 was foolishly voted down.

You're confused.

According to your Attorney General, since PA4 [[the EM law) was repealed on election day, PA72 [[the EFM law) is still in effect, even though it was repealed.

The EM had the sweeping powers to toss out elected officials, impose contracts and sell off assets. The EFM strictly deals with the finances. All EMs, according to your Attorney General, simply reverted back to EFMs.

But there will be litigation over the resurrection of PA72, despite the fact that it was repealed, after Thanksgiving. If the courts agree that PA72 can't be resurrected because it was repealed even though PA4 was repealed, then essentially the state legislator will have to come up with a new law while the current EFMs will pack their bags and ride off into the sunset.

Also, according to Bing, over a dozen lawsuits have been filed against the Consent Agreement. So there's that as well.

**louis** · November-13-12, 11:28 AM

If my memory is serving me correctly, didn't the media say that Detroit was supposed to run out of money last April? and last November before that? I am not denying Detroit's vast deficit I am just saying that i have heard this song before.

**dmike76** · November-13-12, 11:30 AM

They didn't run out because the state released funds to help pay the bills as part of the consent agreement.

**jt1** · November-13-12, 11:33 AM

Originally Posted by dmike76

They didn't run out because the state released funds to help pay the bills.

Those funds were raised form bonds that the city is on the hook for. So essentially the State gave the city it's own money. Now floating bonds doesn't really improve the situation but claiming it is the state's money doesn't paint reality

**Motor City Sam** · November-13-12, 11:33 AM

Originally Posted by louis

if my memory is serving me correctly, didn't the media say that Detroit was supposed to run out of money last April? and last November before that? I am not denying Detroit's vast deficit I am just saying that i have heard this song before.

You're right, Louis. In fact, we first heard the "we'll be out of money in weeks" warning shortly after Bing took office when he said the City would run out of cash if the unions did not accept big wage and benefit cuts.

All of these announcements simply continue to feed the perception that the Bing Administration is totally clueless about the City's finances and how to fix them.

**dmike76** · November-13-12, 11:59 AM

I stand corrected.

**Honky Tonk** · November-13-12, 12:05 PM

"You're right, Louis. In fact, we first heard the "we'll be out of money in weeks" warning shortly after Bing took office when he said the City would run out of cash if the unions did not accept big wage and benefit cuts."

It's starting to sound like the "boy that cried wolf" syndrome everytime a cut is needed.

**Wesley Mouch** · November-13-12, 12:10 PM

Originally Posted by Honky Tonk

"You're right, Louis. In fact, we first heard the "we'll be out of money in weeks" warning shortly after Bing took office when he said the City would run out of cash if the unions did not accept big wage and benefit cuts."

It's starting to sound like the "boy that cried wolf" syndrome everytime a cut is needed.

Ever see that video of that guy who played with bears? He thought they were his friends. Until one day.

The moral of the 'boy who cried wolf' is that there really are wolves.

I look forward to their arrival.

**Honky Tonk** · November-13-12, 12:15 PM

"I look forward to their arrival."

It'll be a bear.....

**313WX** · November-13-12, 01:45 PM

Originally Posted by jt1

Those funds were raised form bonds that the city is on the hook for. So essentially the State gave the city it's own money. Now floating bonds doesn't really improve the situation but claiming it is the state's money doesn't paint reality

It should be noted however that the state is guaranteeing to pay back those bonds if in the event Detroit is unable to pay them back [[same with DPS), otherwise Detroit wouldn't be getting any bonds.

Of course the state isn't going to let that happen, so the taxpayers of Detroit will be on the hook for it.

**jt1** · November-13-12, 01:50 PM

Originally Posted by 313WX

It should be noted however that the state is guaranteeing to pay back those bonds if in the event Detroit is unable to pay them back [[same with DPS), otherwise Detroit wouldn't be getting any bonds.

Of course the state isn't going to let that happen, so the taxpayers of Detroit will be on the hook for it.

That is a good point to add. My issue however [[beyond the mismanagement by the city and the worthlessness of the Program Manager brought in) is that it is represented as if the state if just writing a check to keep the city afloat.

Granted papers thrive on outrage but they need to clarify that the state is withholding the city's bond money [[that the city is on the hook for), not just cutting a bail out check to the city. Accuracy in reporting on such a simple but critical differentiation should be expected.

**313WX** · November-13-12, 01:53 PM

Originally Posted by jt1

That is a good point to add. My issue however [[beyond the mismanagement by the city and the worthlessness of the Program Manager brought in) is that it is represented as if the state if just writing a check to keep the city afloat.

Granted papers thrive on outrage but they need to clarify that the state is withholding the city's bond money [[that the city is on the hook for), not just cutting a bail out check to the city. Accuracy in reporting on such a simple but critical differentiation should be expected.

These facts just don't make for a good news report to the target audience.

**Danny** · November-13-12, 02:47 PM

Plantation politics at work in the Detroit city government. They have their fiscal cliff to worry about.

**Wesley Mouch** · November-13-12, 02:58 PM

Originally Posted by 313WX

These facts just don't make for a good news report to the target audience.

The State was withholding city bond money for no good reason?

That's illogical. And more crucially, it appears to me this is just an excuse to blame the state.

This is nothing more than a smokescreen by those opposed to outside control. This discussion should be about the city's finances -- but instead its about blaming the State.

There'll always be some slight or another that proves malice on the part of those with who you disagree.

Sideshow.

**313WX** · November-13-12, 03:27 PM

Originally Posted by Wesley Mouch

The State was withholding city bond money for no good reason?

No, the fact that so many people think the state of Michigan is sending Detroit taxpayer dollars.

The only way they could reach that conclusion is from the shoddy/biased reporting from the SE Mcihigan Free Press & News.

**ndavies** · November-13-12, 03:39 PM

These bonds have always been contingent on the consent agreement. The State never would have authorized these bonds without the city signing the consent agreement. The state used the bonds to pressure the agreement into place. The city can't issue bonds without the states approval.

Why shouldn't the state cut off the bonds if the city doesn't want to live up to the agreement?

**Wesley Mouch** · November-13-12, 03:40 PM

Originally Posted by 313WX

No, the fact that so many people think the state of Michigan is sending Detroit taxpayer dollars.

The only way they could reach that conclusion is from the shoddy/biased reporting from the SE Mcihigan Free Press & News.

I remain quite confused by this claim of state whim. What does it matter whether its taxpayer dollars or not. This has nothing to do with whether the city has financial problems and will run out of cash. If the city has problems getting cash from bonds tied in with the state, or from any other bond market, why is not an alarm bell?

Still seems to me this is just part of a campaign to divert attention from the real problem [[city insolvency) to another [[they're out to get us by withholding our money).

Nice politics, but sideshow.

**313WX** · November-13-12, 03:41 PM

Originally Posted by Wesley Mouch

I remain quite confused by this claim of state whim. What does it matter whether its taxpayer dollars or not. This has nothing to do with whether the city has financial problems and will run out of cash. If the city has problems getting cash from bonds tied in with the state, or from any other bond market, why is not an alarm bell?

Still seems to me this is just part of a campaign to divert attention from the real problem [[city insolvency) to another [[they're out to get us by withholding our money).

Nice politics, but sideshow.

It all ties back to the "using credit cards to pay your electric bill" discussion in the other thread.

Just keep kicking that can down the road...