Detroit bankruptcy

Detroit skyline.
user JSFauxtaugraphy / Flickr

The city of Detroit has reached a tentative deal with more than a dozen unions that represent thousands of workers in the city.

Mediators for the federal court overseeing Detroit’s reorganization under Chapter 9 bankruptcy announced the tentative deal this morning.

They say the coalition of unions includes 13 civilian unions and the American Federation of State, County and Municipal Employees union. AFSCME is the city’s largest union.

The mediators say the city and the unions have agreed on the "major aspects" of a five-year collective bargaining agreement. The deal still has to be approved by the federal bankruptcy judge Steven Rhodes and by the union's members.

Details of the deal will be released once it’s approved. Chad Livengood of the Detroit News reports he spoke with a source with knowledge of the agreement:

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If you’ve had a frustrating experience with a Detroit parking meter, you’re definitely not alone--about half those meters aren’t working at any given time.

The situation has the bankrupt city looking for outside operators to fix, and possibly run, its parking system.

It’s likely such a deal would get done fast. But experts warn Detroit might want to take a close look at Chicago’s recent experience first.

Peter Martorano / Flickr

DETROIT (AP) - A committee representing Detroit retirees has agreed to endorse the city's plan to cut pensions in bankruptcy. The committee is supporting deals struck last week that would cut the pensions of general retirees by 4.5 percent and eliminate cost-of-living payments. Police officers and firefighters would see a cut only in their annual inflation allowance. Detroit also wants to recover certain generous annuity payments made since 2003.

I flew to Florida early last month, and while in the air re-read from cover to cover the one indispensable book that explains as nothing else what really happened to Detroit.

Eighteen years ago, University of Pennsylvania historian Thomas Sugrue published a volume mind-blowing in its brilliance of analysis and depth of research.

The title, “The Origins of the Urban Crisis,” is somewhat misleading.

This really is the book on how Detroit was destroyed - and destroyed itself - over the last 70 years.

Detroit’s historic bankruptcy case has picked up steam in the past couple of weeks.

The city reached tentative agreement with some of its major creditors, clearing the way for a relatively quick exit from bankruptcy court.

But there are still some key missing pieces that could derail the process, and now they’re mostly outside the city’s control.

“Now is the time to negotiate”

Michigan Municipal League / Flickr

Republican leaders in Lansing are not joining House Speaker Jase Bolger’s calls for unions to contribute to Detroit’s bankruptcy settlement.

Gov. Rick Snyder and several foundations have signed off on a complicated deal to protect retiree pensions and artwork at the Detroit Institute of Arts. The state’s contribution to the so-called “grand bargain” would be about $350 million, and state lawmakers would have to approve that money.

Bolger, R-Marshall, says it’s only fair for unions to contribute to the deal as well.

Detroit Institute of Arts
Photo courtesy of the DIA

As Detroit's bankruptcy battle continues to unfold, a question remains: what will happen to the city-owned pieces at the Detroit Institute of Arts?

The city recently reached a tentative agreement with its retirees and pensioners. Could the agreements impact the possible sale of DIA work to satisfy Detroit's bondholders and other creditors?

Mark Stryker explored that question in The Detroit Free Press and we spoke with him today.

*Listen to the audio above.

Detroit Institute of Arts
Maia C/Flickr

The reality of worried creditors eyeing the treasures at the DIA has the museum world watching very closely.

There are few people who want to see the museum's art leave Detroit.

But in the face of monstrous debt, should it be a case of "hands off the art"?

Recently, the Delaware Art Museum announced it had decided, "with heavy hearts, but clear minds" to sell up to four works from its collection to repay debt from an expansion and thus, keep its door open.

We wanted to get a museum expert's view in this debate, so we welcomed the director of the University of Michigan's Museum Studies Program, Ray Silverman.

Listen to the full interview.

Big news out of Washington, D.C. today: The U.S. Supreme Court has upheld Michigan’s ban on race- and gender-based affirmative action. The Court's majority held that Michigan voters were within their rights to amend the state constitution to ban the college admission policies. We dove into the decision on today's show.

Then, we checked in with Michigan Radio's auto-beat reporter Tracy Samilton about big changes that are likely in the leadership at Ford.

And, on this Earth Day, what moths can tell us about the world's changing climate.

Also, we spoke with author Joseph Tirella about his book Tomorrow-Land: The 1964-65 World's Fair and the Transformation of America.

First on the show, it's taken months of bargaining, bickering and posturing, but there have been promising advances in the Detroit bankruptcy journey.

Pieces are starting to fall into place that could complete the so-called "grand bargain" that would protect the DIA collection and soften the blow for Detroit's retirees.

First came word of a tentative deal between the city and its pensioners. A day later, the board that represents police and fire retirees gave unanimous approval to the deal.

Now it's on to the next hurdle: getting state lawmakers to approve Michigan's share of the grand bargain – $350 million.

Chris Gautz, Capitol Correspondent of Crain's Detroit Business, joined us today.

Peter Martorano / Flickr

It's taken months of bargaining, bickering and posturing, but there have been promising advances in the Detroit bankruptcy journey.

Pieces are starting to fall into place that could complete the so-called "grand bargain" that would protect the DIA collection and soften the blow for Detroit's retirees.

First came word of a tentative deal between the city and its pensioners. A day later, the board that represents police and fire retirees gave a unanimous approval to the deal.

Now it's on to the next hurdle: getting state lawmakers to approve Michigan's share of the grand bargain –$350 million.

Chris Gautz, Capitol Correspondent of Crain's Detroit Business, joined us today.

Listen to the full interview above.

Jarrad Henderson / Detroit Free Press

This Week in Review, Jack Lessenberry and Rina Miller discuss the latest with the Detroit bankruptcy, road funding and the state's foreclosure rate.

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DETROIT (AP) - A judge has ordered the city of Detroit and the suburbs to further explore the creation of a regional water department.

Bankruptcy Judge Steven Rhodes granted Wayne County's request Thursday to have the parties sit down with a mediator.

Detroit's water department provides water to Wayne, Oakland and Macomb counties. Detroit emergency manager Kevyn Orr has expressed interest in spinning off the department as a regional agency.

But some suburban leaders are concerned about future financial burdens on their residents.

The judge says the bankruptcy case is a "unique opportunity" to keep negotiating. Otherwise, Rhodes says the opportunity "will be lost forever."

Sam Beebe

Now that Detroit’s bankruptcy is moving along, Gov. Rick Snyder is moving to secure the state’s end of a so-called “grand bargain.”

It would use $816 million to minimize city pension cuts, and protect the Detroit Institute of Arts from potential liquidation to pay off creditors.

Sarah Cwiek / Michigan Radio

This has proven to be a watershed week in Detroit’s bankruptcy case, which is now moving along at lightning speed.

On Tuesday, representatives for Detroit’s two pension funds reached tentative settlements with the city.

The deals would spare Detroit’s retired police officers and firefighters any direct cuts to their pensions, while non-uniform retirees would take 4.5% cuts.

Lester Graham / Michigan Radio

It's turning into a momentous week in Detroit's quest to exit bankruptcy.

First came a deal with two global banks: UBS and Bank of America.

Then, an agreement with leaders of Detroit's retired police and firefighters.

That was followed late yesterday by a settlement with the remaining Detroit retirees.

Daniel Howes, a business columnist with The Detroit News, talks with us about the next challenges in the Detroit bankruptcy saga.

Here’s the one thing certain about Detroit’s bankruptcy: You don’t want to play poker with Kevyn Orr.

The state-appointed emergency manager had everyone convinced city workers and retirees were facing a steep 26% cut in their pensions – a cut that would jump to 34% if they didn’t quickly approve the smaller amount.

The city was getting ready to mail them all ballots explaining the cuts and asking for their approval.

Then, voilà – yesterday, everything changed. Suddenly, negotiators came up with a deal whereby most pensions would be cut by less than 5%. Police and fire retirees pensions won’t be cut at all.

There seems little doubt that the 32,000 employees and retirees will approve this deal. Yet we need to remember two things. First of all, this is not final yet – not by a long shot.

Something else that’s still very uncertain has to happen first. The Michigan Legislature has to approve contributing $350 million to a fund designed to shore up the pensions and protect any of the work in the city-owned collections in the Detroit Institute of Arts from being possibly sold for the benefit of the creditors.

Peter Martorano / Flickr

A major piece of the Detroit bankruptcy puzzle fell into place today.

The city reached a deal with the group representing Detroit's police and fire retirees. The deal means no cuts to monthly pension checks for retired officers and firefighters. 

We were joined by Michigan Radio's Sarah Cwiek in Detroit. 

Listen to the full interview above. 

The Theodore Levin United States Courthouse in Detroit.
Andrew Jameson / Wikimedia Commons

Mediators for the federal court overseeing Detroit's Chapter 9 bankruptcy say a deal has been reached between the city of Detroit and the Retired Detroit Police and Fire Fighters Association over pension and health benefits.

The deal calls for no cuts to current pension benefits, but does cut future "cost of living" increases in their benefits.

The Association's members still need to approve the plan through a vote.

The potential deal is the first agreement the city has reached with a group of retired workers.

Detroit’s bankruptcy case is throwing a wrench in the city’s usual budget process.

Detroit Mayor Mike Duggan didn’t give his charter-mandated city budget address as scheduled Monday.

Rather, officials told City Council members that Detroit needs to update its plan of adjustment first. That’s the city’s restructuring blueprint for getting through bankruptcy.

Detroit chief financial officer John Hill said that since the plan will shape the city budget, it doesn’t make sense start talking now.

Photo by penywise / morgueFile

This Week in Review, Rina Miller and Jack Lessenberry discuss the latest with the Detroit bankruptcy, the continuing controversies over the General Motors recall, and the money problems involving the charter school system running Muskegon Heights schools.


Judge Steven Rhodes approved a key settlement in Detroit’s historic bankruptcy case Friday.

The deal will settle a costly interest-rate swaps agreement with two banks, UBS and Bank of America, for $85 million.

Emergency manager Kevyn Orr has pushed hard for such a deal. Detroit had guaranteed the swaps with casino revenue, and paid out about $200 million since 2009.

It’s Thursday, the day we talk Michigan politics with Ken Sikkema, former Senate Majority Leader and senior policy fellow at Public Sector Consultants, and Susan Demas, publisher of Inside Michigan Politics.

This week, host Jennifer White discusses the latest developments in the Detroit bankruptcy case and examines the implications.

There was a significant breakthrough yesterday. A settlement was announced between the city of Detroit and three major bond insurers. The insurers will get about 74 cents on the dollar, a significant increase from what emergency manager Kevyn Orr originally offered, and the roughly $50 million in savings will go to support retirees.

The question now is whether retirees will accept further cuts to their pensions, given the fact that Gov. Rick Snyder has stated that the state will not put any money forward unless the retirees agree to cuts. Ken Sikkema says it's imperative that retirees back the plan.

Detroit skyline.
user JSFauxtaugraphy / Flickr

There have been two big developments this week in the high-stakes showdown over Detroit's pensioners, its art treasures and creditors who hope bankruptcy judge Steven Rhodes will pressure the city to put those art treasures on the table.

There's a lot to try to sort out. So, as we do each Thursday, we spoke to Detroit News business columnist Daniel Howes.

Listen to the full interview above.

The average gas mileage of new vehicles sold in the U.S. has steadily been improving, and greenhouse gas emissions are at an all-time low. The Environmental Protection Agency also recently set new emissions standards, scheduled to be phased in between 2017 and 2025, that will reduce the amount of sulfur found in gasoline.

But is the slow and steady climb in fuel economy and emissions enough? On today’s show, we ask if the Obama administration's 2016 and 2025 fuel efficiency goals setting the bar too low?

Then, a new documentary film brings us the story of the Great Lakes as seen through its ice.

And, last month, Gov. Snyder confirmed a financial emergency existed in Royal Oak Township. Can other communities learn from Royal Oak’s situation?

Also, the Share Art Project is a collaborative effort among artists at the Buckham Gallery, students and the Genesee Valley Regional Center. We spoke to a Buckham board member about the program and an upcoming exhibit.

First on the show, there have been two big developments this week in the high-stakes showdown over Detroit's pensioners, its art treasures and creditors, who hope bankruptcy judge Steven Rhodes will pressure the city to put those art treasures on the table.

There's a lot to try to sort out. So, as we do each Thursday, we spoke to Detroit News business columnist Daniel Howes.

If you heard my commentary yesterday on the latest in the Detroit bankruptcy battles, I began with the news that the city had reached a deal with the holders of its general obligation bonds.

All we knew then was that an agreement had been reached, and I said the bondholders were, to quote myself, “evidently going to settle for less than 20 cents on every dollar owed them.”

Well, I was astonishingly far off.

In fact, they ended up settling for 74 cents for every dollar. But there is a reason why I was so wrong.

Could tobacco settlement money help the DIA?
DIA

One group who stands to lose a lot in Detroit’s bankruptcy has upped the ante in the battle over the Detroit Institute of Arts.

The Financial Guaranty Insurance Corporation, a major bond insurer, has gone out and solicited bids for the museum’s assets.

And in papers filed in federal bankruptcy court Wednesday, FGIC said it’s received four tentative bids for the museum’s assets, or portions of them.

The bidders include:

If you aren’t following every twist and turn in the saga of Detroit’s bankruptcy, you may think things are well on track.

Today, in fact, came the good news that the city has apparently reached a deal with its unsecured bondholders, who are evidently going to settle for almost 75 cents of every dollar owed them. 

But the biggest and toughest challenges are ahead.

And if you think the Detroit Institute of Arts is now safe, think again.

Here is how things stand:

Sarah Cwiek / Michigan Radio

Mediators in Detroit’s bankruptcy case have made a potentially huge breakthrough with some of the city’s bondholders.

Bondholders are one of the city’s biggest groups of unsecured creditors.

That means they’re also one of the most important groups for emergency manager Kevyn Orr to get on board with his plan of adjustment, and avoid a protracted legal battle that could bog the city down in bankruptcy court for months or years.

Now, negotiators for the city and three major bond insurers have announced a settlement deal.

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This Week in Michigan Politics, Emily Fox and Jack Lessenberry discuss the state of education in Michigan, an update on the Detroit bankruptcy and the race to fill four seats from Michigan's congressional delegation.

A former Republican state representative says he was on the "wrong side of history" when he opposed same-sex marriage during his time in Lansing 10 years ago. On today's show, Chris Ward, former representative from Genoa County talked about the gay marriage ban and the future of the Republican Party.

Then, we spoke with a very talented Flint rapper about his music and raising the profile of the Flint community.

We heard from writer Deidre Stevens about the Ca-Choo Club, a very unique way to attract allergy sufferers to Sault Ste. Marie.

Also, as Michigan's Aug. 5 primary and November election draw closer, there are some very tight races shaping up. Who are the voters who could most influence the outcome of these races, depending upon whether they stay home or go to the polls?

First on the show, yesterday was the deadline to file objections to the disclosure statement spelling out Detroit's plan to climb out of its bankruptcy hole.

And yes, objections poured in – long lists of objections to the disclosure statement.

Detroit News reporter Chad Livengood joined us today to tell us who's objecting, why, and what comes next.

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