Detroit will be broke by December, says Joe Harris

[E hemingway]

Former Detroit CFO James Harris: City could go broke by December [[audio link to interview in MLive story)

Joe Harris, Detroit's former chief financial officer, says the city very well could go broke by December.

"They're using restricted money" to pay their bills, Harris told Paul W. Smith Wednesday on WJR AM-760. "Money that belongs to others."

Harris criticized Mayor Dave Bing for not immediately issuing layoffs to city employees, and supported the idea of the state sending in an emergency financial manager to oversee the city.

"What you need is a person that is in charge that is not making decisions based on the politics. Because you have no idea how much pressure is exerted by the unions. ...You need somebody who's willing to be a one term mayor."

Here's how Harris laid out Detroit's financial situation:

1. "We lost $100 million dollars last year for the year ending June 30, 2009. Which means we have to somehow fill that hole. The major way to do it, and really there's no other way, is through layoffs. But there's been no layoffs. The mayor thinks there's low hanging fruit he can pick off. But there isn't."

2. "We have an unrealistic budget. The budget itself has, for example, a utility tax increase of $5 million. We're going down not up. Instead of layoffs, it has decreased overtime for police and fire. I can tell you that just never happens. Until you have the layoffs you're not going to have a realistic budget."

3. "Lack of a sense of urgency. Every month we go by with not implementing some of these budgetary items, we're going to lose more and more money. We're going to have zero cash even quicker."

http://www.mlive.com/news/detroit/in...ity_could.html

Notice there isn't a word about Harris saying this in any of the other major Detroit media outlets.

[kraig]

Former Detroit CFO James Harris: City could go broke by December [[audio link to interview in MLive story)

Joe Harris, Detroit's former chief financial officer, says the city very well could go broke by December.

"They're using restricted money" to pay their bills, Harris told Paul W. Smith Wednesday on WJR AM-760. "Money that belongs to others."

Harris criticized Mayor Dave Bing for not immediately issuing layoffs to city employees, and supported the idea of the state sending in an emergency financial manager to oversee the city.

"What you need is a person that is in charge that is not making decisions based on the politics. Because you have no idea how much pressure is exerted by the unions. ...You need somebody who's willing to be a one term mayor."

Here's how Harris laid out Detroit's financial situation:

1. "We lost $100 million dollars last year for the year ending June 30, 2009. Which means we have to somehow fill that hole. The major way to do it, and really there's no other way, is through layoffs. But there's been no layoffs. The mayor thinks there's low hanging fruit he can pick off. But there isn't."

2. "We have an unrealistic budget. The budget itself has, for example, a utility tax increase of $5 million. We're going down not up. Instead of layoffs, it has decreased overtime for police and fire. I can tell you that just never happens. Until you have the layoffs you're not going to have a realistic budget."

3. "Lack of a sense of urgency. Every month we go by with not implementing some of these budgetary items, we're going to lose more and more money. We're going to have zero cash even quicker."

http://www.mlive.com/news/detroit/in...ity_could.html

Notice there isn't a word about Harris saying this in any of the other major Detroit media outlets.

By now, everyone has realized that Joe Harris is full of it. Bing hasn't proposed any amendments to the budget. For the most part, this is the budget that Ken Cockrel submitted while Joe Harris, the man denouncing the budget, was the chief financial officer.

The things that he's saying that Bing should be doing now are the things that he should have had Ken Cockrel doing back in October.

[MCP-001]

Give them a little time, sometimes they're slow to respond.

And on a side note, Detroit isn't the only city facing these problems.

From the feedback that I'm getting from people in surrounding communities, there are a number of cities/townships that are in the same boat, just not as severe [[yet).

I've also been told that this is also the reason why this is coming about in Lansing.

[7miledog]

The things that he's saying that Bing should be doing now are the things that he should have had Ken Cockrel doing back in October.

I thought Bing delayed the layoffs proposed by Cockrel to get the "low hanging fruit" first? Wasn't the announcement just last week [[the beginning of the fiscal year)?

[DetroitDad]

I have always thought state intervention might be in the best interest of the city.

[Novine]

"I thought Bing delayed the layoffs proposed by Cockrel to get the "low hanging fruit" first? Wasn't the announcement just last week [[the beginning of the fiscal year)?"

Kraig wants to ignore that point.

[Huggybear]

Detroit is already broke.

[daddeeo]

The city needs someone like Mr. Bob who is cleaning up the cesspool that is DPS. This is long overdue.

[kraig]

"I thought Bing delayed the layoffs proposed by Cockrel to get the "low hanging fruit" first? Wasn't the announcement just last week [[the beginning of the fiscal year)?"

Kraig wants to ignore that point.

I'm not ignoring that point. The same way that Joe Harris is complaining that Bing isn't making any moves to save money now is the same complaint that everyone had when Ken Cockrel first stepped into the office. If I'm not mistaken Joe Harris was his Chief Financial Officer chosen by Ken Cockrel. Or am I mistaken on that point?

The assumptions or over assumptions that were proposed for the 2009-2010 Fiscal Year Budget, such as the 100 million for the leasing of the tunnel, which is 25 million more than what Kwame had proposed by the way, was done by Ken Cockrel. Wasn't Joe Harris the CEO at that time?

Novine, you don't seem to be impressed with Dave Bing. You have good justification not to be. But just because you're not impressed with Dave Bing doesn't make Joe Harris the man.

Harris is good at jumping on unpopular mayor's, Kwame and Bing. But the fact is, when he had his shot at the job, he didn't do a damn thing but have Ken cockrel propose the same stuff that Kwame did with even higher, more unattainable assumptions.

I think you're ignoring that point.

[digitalvision]

I think the mass layoffs are coming, and soon. Bing is first showing that he's doing his best on his side, but everyone knows the only serious place to cut is labor. If he shows he's cut where he can on his side, it's easier to go to the union and get what he wants.

Joe, while not full of it, doesn't have political tact which IS required in this situation. This isn't just economics, this is about leadership and politics are an inevitable part of this, regardless of one's ideals.

[bailey]

I'm not ignoring that point. The same way that Joe Harris is complaining that Bing isn't making any moves to save money now is the same complaint that everyone had when Ken Cockrel first stepped into the office. If I'm not mistaken Joe Harris was his Chief Financial Officer chosen by Ken Cockrel. Or am I mistaken on that point?

The assumptions or over assumptions that were proposed for the 2009-2010 Fiscal Year Budget, such as the 100 million for the leasing of the tunnel, which is 25 million more than what Kwame had proposed by the way, was done by Ken Cockrel. Wasn't Joe Harris the CEO at that time?

Novine, you don't seem to be impressed with Dave Bing. You have good justification not to be. But just because you're not impressed with Dave Bing doesn't make Joe Harris the man.

Harris is good at jumping on unpopular mayor's, Kwame and Bing. But the fact is, when he had his shot at the job, he didn't do a damn thing but have Ken cockrel propose the same stuff that Kwame did with even higher, more unattainable assumptions.

I think you're ignoring that point.

Harris has been vocal. But is it his job to get the budget passed? Cockrel had a plan.. [[ harris's) ..he wasnt re-elected, and that plan is being re-written now by Bing Seems to me that Bing is doing as little as possible because he wants to actually have a real term as mayor and not get run out in November because he made the hard choices too early.

[Novine]

"I'm not ignoring that point."

Where did you address the point that Cockrel proposed layoffs, which is the only way that budget is even going to look balanced and that Bing has put those off?

[kraig]

"I'm not ignoring that point."

Where did you address the point that Cockrel proposed layoffs, which is the only way that budget is even going to look balanced and that Bing has put those off?

Bing has never stated that he wouldn't lay people off. He's simply stated that he wants to delay the layoffs so that he can try some other things first. He may have to lay off more people than Cockrel proposed since Cockrel's budget assumed a 10% pay cut for all employees even though he [[Cockrel) had not negotiated a pay cut with the unions. Hmmm, that sounds like something that Kwame did when his budget deficit was 300 million. The more things change, the more they stay the same, huh?

There's far more to balancing a budget than just laying people off. Wasn't there a complaint that the CAFR's weren't being done on time due to the accountants in the finance department being laid off? Of course, you wouldn't expect an Auditor [[Harris) that went through 7 Deputy Auditors in 10 years and had never conducted the routine 2 year audits of departments as required by Charter to understand that.

[Ray1936]

I was a C of D employee for 29 years starting in 1955. I heard the broke song each and every year during that time.

Hey, even California will survive.

[Novine]

"There's far more to balancing a budget than just laying people off."

Detroit city government will never balance its budget without massive layoffs. Nothing else that's under discussion will come anywhere near to achieving that. Bing's just putting off the inevitable.

[kraig]

"There's far more to balancing a budget than just laying people off."

Detroit city government will never balance its budget without massive layoffs. Nothing else that's under discussion will come anywhere near to achieving that. Bing's just putting off the inevitable.

Layoffs is just a reaction to a budget situation. It does nothing to address the mismanagement of resources or the structural issues that the City has. You can't treat cancer by immediately chopping off body parts. You have to diagnose the true problems first.

As the CAFR issue demonstrated, sometimes laying off employees puts you into an even worse situation than you were in.

[digitalvision]

Thinking about it a bit more, it makes sense to address the other things first - it might be a situation where once you look at it the only real answer may be bankruptcy.

There's already not enough money for the police to come when there's a car up on blocks in a parallel parking spot which had perfectly good rims and tires the night before, requiring folks to go down to the station, wait for half a day, and file their report and the officer is never, ever sent out. More cuts would just continue to ensure what I already don't get.

[Retroit]

The waste, corruption, and entitlements within the city are so great that it will require a State takeover [[like Pontiac). It's only a matter of time. There is no one among the past & present leadership that is without blame. The analogy to GM is accurate: too big, too wasteful, too many entitlements established in better times, too few customers/residents, etc. Time to throw in the towel and admit failure.

[Novine]

"Layoffs is just a reaction to a budget situation. It does nothing to address the mismanagement of resources or the structural issues that the City has. You can't treat cancer by immediately chopping off body parts. You have to diagnose the true problems first."

Time's up. Detroit missed its chance to do this. It also won't change the fact that no matter what diagnosis Bing comse up with after his delay, layoffs are going to be a big part of the solution. Cockrel stated that up front. Bing is kicking the issue down the road for political reasons.

[kraig]

"Layoffs is just a reaction to a budget situation. It does nothing to address the mismanagement of resources or the structural issues that the City has. You can't treat cancer by immediately chopping off body parts. You have to diagnose the true problems first."

Time's up. Detroit missed its chance to do this. It also won't change the fact that no matter what diagnosis Bing comse up with after his delay, layoffs are going to be a big part of the solution. Cockrel stated that up front. Bing is kicking the issue down the road for political reasons.

More than likely, you're right. Layoffs are going to be a part of the solution. But, you still need to diagnose who and what you're going to cut and when, where, why and how you're going to cut. Financially, you could simply cut the entire police force and end up with a huge budget surplus. But that wouldn't make one bit of sense. I know that you believe it's too late. However, managing a city is always a work in progress. It's never too late to think.

[EastSider]

Financially, you could simply cut the entire police force and end up with a huge budget surplus. But that wouldn't make one bit of sense.

Given the piss-poor state of the department from top to bottom, would it be such a bad idea to just scrap it and let individual areas contract with private security companies? Some of the neighborhood associations already contract to supplement coverage, like East English Village. Does Palmer Woods still have their coverage?

If the companies need backup, they could call the county sheriff.

[kraig]

Given the piss-poor state of the department from top to bottom, would it be such a bad idea to just scrap it and let individual areas contract with private security companies? Some of the neighborhood associations already contract to supplement coverage, like East English Village. Does Palmer Woods still have their coverage?

If the companies need backup, they could call the county sheriff.

Why not contract with Robocop?

It would be a horrible idea to scrap the police force. Private Security Companies aren't set up to investigate crime. And before any of you even make a smart remark, yes, the Detroit Police Department is. There are a lot of good cops in Detroit.

[EastSider]

Why not contract with Robocop?

It would be a horrible idea to scrap the police force. Private Security Companies aren't set up to investigate crime. And before any of you even make a smart remark, yes, the Detroit Police Department is. There are a lot of good cops in Detroit.

What if the day-to-day beat patrol was contracted out, and the PD focused on investigating crimes?

[kraig]

What if the day-to-day beat patrol was contracted out, and the PD focused on investigating crimes?

That's a question for another thread. It would be interesting to see if any other [[big) city has ever tried something like this. I doubt if anyone here would try something like that.

[daddeeo]

Would Krispy Kreme suffer as a result?