Detroit City Council has no alternative to $350M loan plan to pay off city's debt
DETROIT (AP) - The Detroit City Council has decided not to push an alternative to a $350 million loan designed to help the city pay off some of its massive pension debt.
Council members on Friday discussed the competing plan to the post-bankruptcy petition financial proposal engineered by state-appointed emergency manager Kevyn Orr.
About $230 million from Barclays would be used to fully pay off a complicated pension debt deal involving two major creditors. The rest would be used to improve basic city services.
Pledges of casino and income tax revenue, and proceeds from the sale of some city-owned of assets, would secure the loan.
Federal Judge Steven Rhodes is overseeing the city's bankruptcy case and is expected to make a decision later on whether to approve the Barclays' deal.
Meanwhile, Detroit's appointed emergency manager says he did not promise to file for bankruptcy as a condition of getting the job.
Kevyn Orr testified Friday during a trial to determine whether the city is eligible to fix its finances in bankruptcy court. He was appointed the city's emergency manager in March and decided in July to make Detroit the largest municipality to file for bankruptcy.
Orr says the city is saddled with $18 billion in long-term debt.
Orr and Police Chief James Craig both testified Friday about the city's high crime, blight and the deplorable conditions of police equipment and facilities.
Orr is a bankruptcy expert who represented automaker Chrysler LLC during its successful restructuring.