Kevyn Orr gets down to business in Detroit

Detroit Rock Bottom


Photo by Anne C. Savage, special to Eclectablog

Yesterday, Detroit Emergency Manager Kevyn Orr gave a frank State of the City report that showed that the city is “clearly insolvent”. Not a big surprise to anyone except a handful of folks who seem to think it’s all a big mistake and the city is just fine financially. For as much as I despise the concept of an unelected Emergency Manager taking over the running of a city, I do believe that Detroit will never move forward if those in charge aren’t living in the real world where even profit sharing they’ve been denied by the state isn’t enough to patch the holes in their budget.

Orr had some things to say to the Detroit Free Press that I thought were spot on:

[Orr] said he has found a city workforce filled with talented people who “want to do their jobs, and want to be good at it” despite understaffing, demoralizing pay and benefits cuts and grave doubts about the city’s survival.

Orr said he wants to stay away from apportioning blame among city officials, particularly Mayor Dave Bing and the current City Council.

“Especially in the backdrop of the neglect they had in the prior administration, which was extraordinary, they were trying to keep a city going with what they had to work with,” Orr said.

Detroit’s crisis, he said, dates back decades.

“What stands out to me is 40 years of dropping demographics, of reducing revenues — you don’t get the magnitude of neighborhood blight we have overnight — of no one having a plan or solution for that, of inviting, quite frankly, some class of residents to leave. And they did. They literally went across 8 Mile and started building buildings in Southfield. Without a vision for what you want your city to be three, five, 10, 20, 30 years out, the totality of those circumstances drove us here.”

That last highlighted bit is something you won’t hear from a lot of proponents of an Emergency Manager for Detroit. They simply point to “corruption” and “ineptitude” and “poor leadership”, wanting to place the blame on the black Democratic leadership over the years. It’s an easy peg to hang their hat on because it allows them to deny the reality of how Detroit got to where it is today. It’s a two-dimensional world where the rich that fled to the suburbs played no role, where the globalization of our manufacturing industries played no role and where everything can be blamed on a handful of black leaders.

So, good for Kevyn Orr for putting that out there. It’s as important to recognize that as it is to admit Detroit’s problems go beyond getting a bit of money back from the state for revenue sharing they should have received.

Mayor Dave Bing, who officially kicks of his reelection campaign today, was there to say he and Orr are singing from the same hymnal:

“My administration has prepared the runway for the overhaul that the EM appears to be planning,” Bing said. “It’s encouraging to know that he and I are on the same page. He’s highlighting on and focusing on the same initiatives that my administration has already begun to make progress on, and that’s public safety, transportation, lighting, blight and recreation.”

One of the main differences that Orr has that Bing does not, is a set of financial tools that city administrators do not have. The ability to renegotiate or even toss out contracts is something most mayors of failing cities would love to have but simply do not. In my conversations with Flint Mayor Dayne Walling, he’s said as much.

Meanwhile, the NAACP has filed a lawsuit against the state claiming that Public Act 436 — the latest version of Michigan’s Emergency Manager Law — violates the voting rights of African Americans in Detroit.

“It’s fundamentally about our right to vote, and our right, as constitutionally guaranteed, to select and elect our own publicly elected officials,” said Detroit branch President Rev. Wendell Anthony.

The suit also claims the state applies the law selectively to communities of color, since white communities in similar states of financial distress have avoided emergency managers.

“Too many people have died for this cause,” attorney Nabih Ayad said of voting. “And for them to go backwards now on this issue, it’s unbelievable. It’s deplorable.”

Governor Snyder’s office released a statement saying, in part, “The communities or schools currently with an emergency manager or going through any part of state’s EM process are because of financial facts and crises, certainly not because the make-up of their populations.” While that may be technically true, the reality is that it certainly IS having a disparate impact on African Americans in Michigan and some more white areas seem to be escaping the imposition of an Emergency Manager despite their financial problems. That said, the NAACP’s lawsuit is likely to go about as far as the previous lawsuits like it in other cities have: nowhere. You can read their complaint HERE (pdf).

Orr says it will take 6 weeks for a full review to take place and to determine if the city can avoid bankruptcy. In the meantime, he’ll be meeting with vendors and labor unions to see if they can come to agreements outside of a bankruptcy proceeding. One thing we know for sure, banks will get paid first. Everyone else will wait in line because that’s written into PA 436 which says the operating plan cities under Emergency Managers develop must include the following provisions:

The payment in full of the scheduled debt service requirements on all bonds, notes, and municipal securities of the local government, contract obligations in anticipation of which bonds, notes, and municipal securities are issued, and all other uncontested legal obligations.

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  • Toka313

    There is no reason in the world to trust Kevyn Orr. I read the report. It’s 45 pages of the same crap we’ve been fed for years. Can you remember a year when there wasn’t a “cash crisis?” Listen, the financial review board report “showed work” way more than this Kevyn Orr report. The whole thing is conclusionary. Never ever trust someone not willing to show their work/figures.

    It’s time for a bailout or a bankruptcy. Not a selling off of the city. Banks need to be paid last, not first.

  • http://www.facebook.com/david.holtz David Holtz

    I think that last paragraph is what could lead Orr to take the city into bankruptcy to avoid a political bloodbath. By prioritizing debt payments in PA436, the Legislature and Gov. Snyder tilted the playing field against providing public services and toward laying off workers, cutting benefits etc. So Orr may find bankruptcy preferable or he will simply use PA436 as a blunt instrument against workers and public services while the banks, of course, end up winners.

  • kirke123

    its always about the money? how can any law gurantee protection under bankruptcy?

  • Pingback: Emergency manager may be moving Detroit toward bankruptcy | Democratic Developing Stories()

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