Orr to creditors: Detroit on 'brink of financial and operational ruin'

[oo7plyr]

Emergency Manager Kevyn Orr outlined a plan for creditors Friday to stop Detroit’s downward spiral by spending $1.25 billion on public safety and other city services, money that could come from slashing the city’s $17 million in debt. Orr unveiled the historic proposal during a closed-door meeting with about 150 representatives from banks, bondholders, unions and pension funds, all of whom were asked Friday to make steep concessions. The unprecedented plan — including sweeping changes to pension and health care benefits — is seen as the first step in negotiations toward what could be the biggest municipal bankruptcy filing in U.S. history.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2WCtg86d6

[Wesley Mouch]

Emergency Manager Kevyn Orr outlined a plan for creditors Friday to stop Detroit’s downward spiral by spending $1.25 billion on public safety and other city services, money that could come from slashing the city’s $17 million in debt. Orr unveiled the historic proposal during a closed-door meeting with about 150 representatives from banks, bondholders, unions and pension funds, all of whom were asked Friday to make steep concessions. The unprecedented plan — including sweeping changes to pension and health care benefits — is seen as the first step in negotiations toward what could be the biggest municipal bankruptcy filing in U.S. history.

From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2WCtg86d6

Thanks to Mr. Snyder for caring about Detroit instead of running from it like most Republicans. Thanks Mr. Orr for your hard work.

[TexasT]

http://www.myfoxdetroit.com/link/641...d-to-creditors

Link to the actual report.

There's a lot of dirty laundry aired. Love that city workers "have been permitted to transfer across departments based solely on seniority [[without regard to merit, relevant qualifications or experience for the new position)." Page 36. That explains a lot.

Some commonsense will be injected: "The City has amended the criteria for transfers and assignments and based them upon experience, attendance, work performance, sick time use and demonstrated ability rather than seniority."

[DetroiterOnTheWestCoast]

Sounds like lots of bitter pills will need to be [[and have to be) swallowed.

[dmike76]

Holy Schnieke!!!!! COMMON SENSE!!!! HALLELUJAH!!!! It's also noted in another freep article that he plans on lowering income and property taxes. If they can do that, I feel like that will really inject momentum into growing the tax base.

[Wesley Mouch]

There's a lot of dirty laundry aired. Love that city workers "have been permitted to transfer across departments based solely on seniority [[without regard to merit, relevant qualifications or experience for the new position)." Page 36. That explains a lot.

Some commonsense will be injected: "The City has amended the criteria for transfers and assignments and based them upon experience, attendance, work performance, sick time use and demonstrated ability rather than seniority."

So exactly what part of this is in the best interest of the citizens. Detroit [[and many other municipal governments) have been run by the inmates. This is why I'm not a fan of labor unions.

Protect workers against abuse. Sure. Fight for wages. Fair enough.

But transfers solely on seniority? What world do these unions live in? I sure hope this is in the union contract, because if its just city policy, then management deserves to be fired as well.

Its pretty radical, but allowing management to manage things might actually help. I'm sure there are many incompetent managers too. Well, what do you expect when you limit management power. What competent person wants to try and manage when their hands are tied by Union rules.

I didn't know it was that bad. I'm furious that our city leaders agreed to these kind of terms. And why is this a secret? How could this not have been taken out of the last union agreements? What planet do the people who sign these agreements come from? Wow, our municipal governance system is
embarrassing.

[gnome]

http://www.myfoxdetroit.com/link/641...d-to-creditors

Link to the actual report.

There's a lot of dirty laundry aired. Love that city workers "have been permitted to transfer across departments based solely on seniority [[without regard to merit, relevant qualifications or experience for the new position)." Page 36. That explains a lot.

Some commonsense will be injected: "The City has amended the criteria for transfers and assignments and based them upon experience, attendance, work performance, sick time use and demonstrated ability rather than seniority."

man o man, that is one depressing read. Nothing works. The entire structure of City government is in need of a compete overhaul.

Everything that every Detroit hater has ever said is true. The head-in-sand crowd, the grape-throwers, the code-speakers, et al have sucked the marrow from our bones.

[Wesley Mouch]

Sounds like lots of bitter pills will need to be [[and have to be) swallowed.

Bitter pill? Getting rid of these absurd rules is not a bitter pill. They are only being asked to join the real world.

Not a bitter pill. More like a reduction in caviar budget. They can handle it. The rest of us do.

[dmike76]

I cannot believe how bad this report is. I knew it was bad but jeez.....I can only hope that the EM can fix these problems quickly.

[TexasT]

I'm furious that our city leaders agreed to these kind of terms.

Said the same thing to my husband, who has worked in government and municipal finance his whole career. His answer: Unions support the mayor and council with money. If unions don't get their contracts, those bureaucrats lose support. Tit-for-tat.

Unions are no better than the large corporations.

[Wesley Mouch]

Said the same thing to my husband, who has worked in government and municipal finance his whole career. His answer: Unions support the mayor and council with money. If unions don't get their contracts, those bureaucrats lose support. Tit-for-tat.

Unions are no better than the large corporations.

Figuring out how we can make municipal government better is critical to Detroit's success.

I'd like to hear from someone within the pro-union mindset discuss if they are as outraged as I am. And if so, what can be done? Is this how its supposed to work? Seniority as the only factor? If not, how can be get to a responsible, unionized municipal government? How can we stop it from metastasizing back into the blob that eats tax revenue?

[[None of the comments here are intended to suggest anything other than living wages for city workers. I have no love for unions, but don't mind them if they don't do impose mediocrity.)

[corktownyuppie]

Figuring out how we can make municipal government better is critical to Detroit's success.

First step is explicitly defining "better" and getting consensus on it. The underlying tension is between people who believe that government has a role in providing jobs vs. providing services.

We must be clear. The focus of municipal government, whether through unionized labor or private contractor, should be to deliver the best services to its residents.

I'd like to hear from someone within the pro-union mindset discuss if they are as outraged as I am. And if so, what can be done? Is this how its supposed to work? Seniority as the only factor? If not, how can be get to a responsible, unionized municipal government? How can we stop it from metastasizing back into the blob that eats tax revenue?

I am outraged. But not because of seniority rules itself...but because those seniority rules are so obviously and so blatantly coming before service quality.

Like you said, I'm not against unions. And I believe that unions could have provided the "leanness" and efficiency to better service its residency. But they chose not to.

I do not hold only them to blame...certainly there were other major headwinds over the last 20 years, including erosion of unskilled labor, corruption, and unsustainable legacy costs.

I'm tired of hearing, "don't blame the unions, blame the banks", as if it's an either/or situation. I'm blaming everyone, and this is why everyone is going to sacrifice.

I'm actually very excited.... $1.5Billion to improve service delivery? We are aiming toward a much better quality of life in Detroit

[DetroiterOnTheWestCoast]

Bitter pill? Getting rid of these absurd rules is not a bitter pill. They are only being asked to join the real world.

Not a bitter pill. More like a reduction in caviar budget. They can handle it. The rest of us do.

I wasn't referring to a reform of work rules, which is necessary but not really that much of the picture - when compared to the complete erosion of the tax base. I was referring to everyone who will be taking pennies on the dollar. This report certainly paints a bleak picture, but it seems as though the necessary steps to achieve a solvent future may actually be taken.

[mwilbert]

Said the same thing to my husband, who has worked in government and municipal finance his whole career. His answer: Unions support the mayor and council with money. If unions don't get their contracts, those bureaucrats lose support. Tit-for-tat.

This is true, but it doesn't really explain Detroit's situation. Do you think CAY would have lost any of his re-election bids if he had tightened up work rules and annoyed the unions? I don't. He didn't make any such attempt because he was by inclination a union man, because he saw city jobs as the rightful spoils of his victory and didn't want to do anything to make it harder for him to reward his friends, and because he didn't have any interest in actually administering the city.

There isn't any question but that the political power of municipal unions can cause elected officials to agree to things that are dubious, but it doesn't make much difference if you elect people who don't care about administration in the first place, and with the possible exception of Archer, Detroit hasn't elected anyone with an administrative bent in the last 45 years.

I have pointed out on this forum many times that the city has been abysmally run for as long as I can remember, and that this is a root cause of Detroit's dysfunction. And what I usually get as a response is that the problems are economic and structural and demographic, suburbanization and segregation and deindustrialization. And those are real, serious problems. However it seems to me that many cities have had to cope with those to a greater or lesser extent, yet somehow or other provide their citizens with a better quality of life, have lost less population, aren't about to go bankrupt, etc. Administration is really important, and having the EM in place to improve it will probably do more to help the city than most people think.

[Wesley Mouch]

This is true, but it doesn't really explain Detroit's situation. Do you think CAY would have lost any of his re-election bids if he had tightened up work rules and annoyed the unions? I don't. He didn't make any such attempt because he was by inclination a union man, because he saw city jobs as the rightful spoils of his victory and didn't want to do anything to make it harder for him to reward his friends, and because he didn't have any interest in actually administering the city.

This cuts to the core of the issue. Politicians and city administrators have very little incentive to care about work rules and the resulting inefficiency. In fact, they're more likely to prefer larger bureaucracies. CAY made many city workers go out and raise funds.

[iheartthed]

This is true, but it doesn't really explain Detroit's situation. Do you think CAY would have lost any of his re-election bids if he had tightened up work rules and annoyed the unions? I don't. He didn't make any such attempt because he was by inclination a union man, because he saw city jobs as the rightful spoils of his victory and didn't want to do anything to make it harder for him to reward his friends, and because he didn't have any interest in actually administering the city.

City government has been the largest employer in the city for decades. CAY certainly wouldn't have lasted as long as he did if he was anti-union. However, I don't think unions are the root cause of Detroit's troubles...

There isn't any question but that the political power of municipal unions can cause elected officials to agree to things that are dubious, but it doesn't make much difference if you elect people who don't care about administration in the first place, and with the possible exception of Archer, Detroit hasn't elected anyone with an administrative bent in the last 45 years.

I have pointed out on this forum many times that the city has been abysmally run for as long as I can remember, and that this is a root cause of Detroit's dysfunction. And what I usually get as a response is that the problems are economic and structural and demographic, suburbanization and segregation and deindustrialization. And those are real, serious problems. However it seems to me that many cities have had to cope with those to a greater or lesser extent, yet somehow or other provide their citizens with a better quality of life, have lost less population, aren't about to go bankrupt, etc. Administration is really important, and having the EM in place to improve it will probably do more to help the city than most people think.

Well, let's step back. Detroit's not hardly the only Michigan city that has teetered on bankruptcy. I think the better question to ask is why so many communities in Michigan have come into financial emergencies. Detroit is just the one that threatens to expose the flawed system since its a systemic threat.

[Wesley Mouch]

City government has been the largest employer in the city for decades. CAY certainly wouldn't have lasted as long as he did if he was anti-union. However, I don't think unions are the root cause of Detroit's troubles...

Heaven now. They aren't the root cause. The root cause is a bad foundation, bad construction, and abusive use. Everything's a problem.

How do you solve a systemic problem? Fix everything.

Thus, saying unions aren't the 'root' problem is ignoring something that's broken and needs to be fixed.

[Cincinnati_Kid]

Looks like the pensioners are about to get a hair cut from what he said. "Please don't take too much off the top Mr Orr, and lightly trim the sides."

[Ray1936]

Looks grim for us pensioners from the C of D. Fortunately, I saved all my graft money and reported it on my 1040.

[Wesley Mouch]

...snip...I think the better question to ask is why so many communities in Michigan have come into financial emergencies. ...snip...

Not a Michigan problem:
City and Locality Bankruptcy Filings [[7):
-- City of San Bernardino, Calif.
-- Town of Mammoth Lakes, Calf. [[Dismissed)
-- City of Stockton, Calif.
-- Jefferson County, Ala.
-- City of Harrisburg, Pa. [[Dismissed)
-- City of Central Falls, R.I.
-- Boise County, Idaho [[Dismissed)

[compn]

http://s3.documentcloud.org/document...-report-to.pdf

Over 5,000 structures have been demolished; the remaining portion of the 10,000 structures in the program are planned to be demolished by December 2013.

5000 buildings to be demolished in 6 months? bulllllllllllshit.

PA 436 contains an appropriations provision that immunizes the law from referendum.

hows that feel michigan? you and your petitions can suck it!

Litigation Concerning Michigan’s Open Meetings Act.
• The Michigan Court of Appeals has held that an EM is not subject to the state Open Meetings Act, even when
the EM assumes the duties of a body that is subject to the act [[e.g., the city council).

CoA likes to be slapped by the MSC. imo this will be reversed, no one is immune from open meetings act. is orr paid from tax dollars? yes? then he is subject to the laws of this country.

A recently-implemented “Broken Windows” pilot
project has achieved positive results in the 8th Precinct’s Rosedale Park neighborhood. This pilot project could be expanded City-wide.

...

As demonstrated by the 10-year projections, however, the City’s expected revenues will fall significantly short of the
levels required to fund the City’s operations and fully satisfy its liabilities.

there it is. detroit is screwed for 10+ years, and orr expects people to move in??

APPOINTMENT OF “TRANSITION ADVISORY BOARD”

here it is. people think the mayor will get control of the city? what planet do you live on?
the legislature didnt go against the constitution just to have an EM for 18 months. this is permanent. "TAB 4 EVER." "Potential Appointment of New Emergency Manager." yeah...

not gonna sell the detroit water, just put new people in charge and raise rates. hostile takeover isnt technically a 'sale'.

120 pages. read it if you care about the next 10 years [[assuming the mich supreme court doesnt slap the EM law).

[Hermod]

Said the same thing to my husband, who has worked in government and municipal finance his whole career. His answer: Unions support the mayor and council with money. If unions don't get their contracts, those bureaucrats lose support. Tit-for-tat.

Unions are no better than the large corporations.

Why the sainted Franklin D. Roosevelt felt that government employees shouldn't be able to bargain working conditions and wages nor should they have the right to strike..

[iheartthed]

Not a Michigan problem:
City and Locality Bankruptcy Filings [[7):
-- City of San Bernardino, Calif.
-- Town of Mammoth Lakes, Calf. [[Dismissed)
-- City of Stockton, Calif.
-- Jefferson County, Ala.
-- City of Harrisburg, Pa. [[Dismissed)
-- City of Central Falls, R.I.
-- Boise County, Idaho [[Dismissed)

Unlike Michigan, California cities don't need state permission to file bankruptcy. If Michigan's laws were like California then Michigan would probably already have 8 cities and two school districts to have gone bankrupt.

[Toka313]

Taking money from current retirees pensions is like taking money from your 401k and saying you put too much into it and don't deserve it now.

I don't see a way that Orr can win that in court. The constitutional mandate on pensions is very clear, and when Schimmel in Pontiac tried to replace the pension board he lost in court too.

However, funny to see all the union hate here. The answer to people making more money than you are is not to knock those people down, but rather to rise yourself up.

Was there some mismanagement? Sure. But to pretend like the state wasn't part and parcel of causing the issues is just false. The infamous "handshake deal" with Engler, the cutting of revenue all throughout the 90's and 00's, and most recently the elimination of the PPT which will hit 12% of Detroit revenue next year, the capture of millage funds by suburban communities [[Yes I know Detroit captured some too). People don't like "us v. them" but don't often recognize that there is an impetus behind it.

[313WX]

Taking money from current retirees pensions is like taking money from your 401k and saying you put too much into it and don't deserve it now.

I don't see a way that Orr can win that in court. The constitutional mandate on pensions is very clear, and when Schimmel in Pontiac tried to replace the pension board he lost in court too.

However, funny to see all the union hate here. The answer to people making more money than you are is not to knock those people down, but rather to rise yourself up.

Was there some mismanagement? Sure. But to pretend like the state wasn't part and parcel of causing the issues is just false. The infamous "handshake deal" with Engler, the cutting of revenue all throughout the 90's and 00's, and most recently the elimination of the PPT which will hit 12% of Detroit revenue next year, the capture of millage funds by suburban communities [[Yes I know Detroit captured some too). People don't like "us v. them" but don't often recognize that there is an impetus behind it.

That's probably the biggest reason of them all why this will end up in bankruptcy court.