Detroit financial crisis

State of Michigan

DETROIT (AP) - Bankruptcy attorney and turnaround specialist Kevyn Orr has arrived at Detroit City Hall for his first day on the job as emergency manager.

Orr has said he expects to sit down with Mayor Dave Bing Monday and meet with some City Council members.

He was appointed earlier this month by Gov. Rick Snyder and takes over the finances of the largest city in the country to come under state oversight.

Orr also plans to look at the city's financial data to help develop his plan of action in tackling Detroit's fiscal crisis. The city has a $327 million budget deficit and more than $14 billion in debt.

Some, including a group led by prominent Detroit pastors, have said they will protest Orr's appointment and Michigan's emergency manager law.

Millions of undocumented immigrants in this country are hoping this is the year for immigration reform. On today's show, we explore what the future holds for mixed-status families.

And, it's being called "one of the most dramatic ecological recovery stories in North America." Why beavers along the Detroit River are such a big deal.

And, it’s been a week now since Governor Snyder announced Kevyn Orr as Detroit’s emergency manager, and it was a week ago that we last spoke with Daniel Howes, business columnist at the Detroit News. We checked in with Howes about the prospect of a Detroit recovery.

All that, and roller derbies and march madness, on today's show.

State of Michigan

The following is a summary of the above audio. To hear the full interview, click above.

It's been five days since Governor Snyder presented Kevyn Orr as the emergency manager of Detroit.

Many were quick to comment about Orr’s “introduction” to Michigan and that he seemed well-suited for the job.

He is a U-M law school alumnus, an attorney specializing in bankruptcy law and he helped guide Chrysler through its bankruptcy.

At his introductory press conference last Thursday with Governor Snyder and Detroit Mayor Dave Bing, Kevyn Orr certainly seemed ready and willing  to take on the gargantuan task of “fixing” Detroit’s dire financial crisis.

Within the first day of that press conference, it was reported that Orr had some financial troubles of his own. He had liens on his home over unpaid unemployment insurance taxes.

"It is quite embarrassing when something like that comes up, but I took care of that as soon as I could and paid it off," Orr said. "Frankly, I have been too focused on my professional obligations and not as focused enough on my private obligations."

Sarah Cwiek / Michigan Radio

A Detroit-based technology firm says it has an elegant solution to the city's property tax-collection woes.

Loveland Technologies has been mapping the city’s tax-foreclosed properties online. And Loveland founder Jerry Paffendorf says they’ve come across some remarkable data along the way, like this: “The city of Detroit is nearly half a billion dollars behind on property tax collection, when you add in penalties and interest.”

State of Michigan

Detroit's new emergency manager said he was embarrassed when Detroit News reporters showed him records of four tax liens placed on his house in Maryland.

Orr said he didn't know anything about the liens when shown records of them Friday morning by The Detroit News.

"I don't know what they are," Orr said, as his new boss, Gov. Rick Snyder, sat next to him in The News' offices. "That's surprising to me, to be honest."

Orr promised to take care of the matter right away. 

There was apparently an oversight related to a childcare provider unemployment insurance payment," Wurfel wrote in an e-mail. "Immediately upon learning of the potential issue just today, he took action at once to look into and resolve with the state of Maryland."

Now, Matt Helms of the Detroit Free Press reports the matter has been taken care of: 

A Maryland official confirmed today that two payments have been made on tax liens filed against Kevyn Orr, Detroit’s emergency financial manager after the state went after unpaid unemployment insurance on child care for his two children.

Maryland Department of Labor, Licensing and Regulation spokeswoman Maureen O’Connor told the Free Press today that she could not discuss specifics of the liens filed against Orr, but said two payments were made on outstanding taxes he owed, so the liens “are in the process of being satisfied.” She declined further comment.

Gov. Snyder said things happen...

“I just view it as that’s not something he was aware of,” Snyder said. “Those things can happen where you had a nanny helping you in your house, you took care of part of the issues and your accountant missed something. And you just go get it taken care of and move ahead.”

When we asked our Facebook fans on Saturday whether they thought this news was a big deal or not... most said, "It's a big deal!"

But maybe Debra Burr put it best when she closed out the comment thread:

"Okay. Now what?"

YouTube

Gov. Rick Snyder and Detroit's new emergency manager Kevyn Orr made the talk show rounds this morning.

Gov. Snyder went toe to toe with Rev. Al Sharpton who challenged him that appointing an emergency manager in Detroit is undemocratic.

Sharpton said the appointment of Orr as emergency manager of Detroit "undermines people's right to vote, because the only one who voted for Kevyn was you."

Watch Snyder's response here:

Snyder said the mayor and city council will still have input in the process.

Orr mentioned the turnarounds of Baltimore and Pittsburgh as models for how the city of Detroit can get back on a solid financial footing.

Orr and Snyder also appeared on WWJ this morning and I'm looking for that audio. If I find it, I'll post a link to it here.

When Governor Snyder announced he was appointing an emergency manager for Detroit, I was in Traverse City, having lunch with a former governor who long ago tried his best to get the state to help Michigan’s largest city stay on its feet.

William Milliken served as governor longer than anyone has or ever will – fourteen years.

He is a firm believer in something Rick Snyder said earlier this week – that it is not Detroit vs. Michigan, but a situation where a healthy Detroit is essential to the entire state.

Kevyn Orr
Sarah Cwiek / Michigan Radio

It’s official: Detroit has an emergency manager.

His name is Kevyn Orr. And it’s fair to say that he charmed even some skeptical observers when he was introduced to Detroit Thursday.

Orr isn’t exactly a household name. He was—until he quit his job Friday—a partner at the Jones Day law firm in Washington, DC. He’s a bankruptcy lawyer and turnaround expert who helped Chrysler through a successful managed bankruptcy.

State of Michigan / screen grab

We talked throughout today's Stateside about what an emergency manager might do when they first come to Detroit.

Daniel Howes, business columnist at the Detroit News, joined us as he does most weeks.

In his column today, he wrote about bankruptcy being Detroit's next step.

That's even after the appointment of an emergency manager.

Howes broke down for us how a municipal bankruptcy for a big city differs from a business or personal bankruptcy and what a bankruptcy would mean for the city of Detroit.

Kevin Orr, Detroit's new emergency manager, said today he hopes he doesn't have to use the 'cudgel' of bankruptcy. He instead hopes to get consent in a financial turnaround.

Listen to the full interview above.

State of Michigan / screen grab

Each week we speak with Ken Sikkema, former Senate Majority Leader and Senior Policy Fellow at Public Sector Consultants, and Susan Demas, political analyst for Michigan Information and Research Service.

Governor Rick Snyder officially announced the appointment of an emergency manager for Detroit today. He named Kevyn Orr, a Washington D.C. lawyer who represented Chrysler in it’s 2009 bankruptcy as his manager of choice. Orr has many ties to Michigan including graduating from the University of Michigan Law School.

" I think the city is going to need some cash in order to meet some obligations and restructuring, whether or not that is going to be an easy sell is a different matter," said Demas.

"If this gentleman [Kevyn Orr] can actually show some results to get this city in the right direction than I think the attitude in Lansing would be different toward more money, and more investment," Sikkema said.

Listen to the full interview above.

Sarah Hulett / Michigan Radio

It's the largest state takeover of a city in U.S. history.

The city of Detroit will have a state-appointed emergency manager running things.

Kevyn Orr, a Washington D.C. lawyer and restructuring expert, will start his job on March 25th.

With $14.9 billion in long-term liabilities and a $327 million near term deficit, Orr will have his work cut out for him.

We updated this post as the news broke today.

Scroll down and read up for a look at how things unfolded.

SnyderLive / LiveStream

Some Detroit City Council officials have formally appealed the determination that their city is in a financial emergency.

That designation is part of the ramp up to a take-over by an emergency financial manager.

City Council representatives argued their case to Chief Deputy Treasurer Mary McDowell.

Rick Pluta, Lansing Bureau Chief for the Michigan Public Radio Network, was at the hearing today.

Listen to the full interview above.

SnyderLive / LiveStream

At a hearing this morning in Lansing, Detroit city leaders argued against the impending appointment of an emergency manager in the city.

Saying "a deal's a deal," Detroit's Director of Research and Analysis David Whitaker said the state has barely given the city enough time to implement the Financial Stability Agreement.

"In my neighborhood, where I grew up, we were taught 'a deal's a deal.' And I suspect that's the same thing you were taught," said Whitaker.

SnyderLive / LiveStream

The Detroit City Council is appealing the state's finding that the city is in a 'financial emergency' and that city leaders have no plan to resolve the problem. The finding clears the way for the appointment of an emergency manager.

In a weird twist of fate, two remarkable events in Detroit’s recent history are happening at virtually the same time.

Former Detroit mayor Kwame Kilpatrick was convicted of multiple federal corruption charges Monday. And Governor Snyder is expected to appoint an emergency financial manager within days.

The timing is a coincidence, but there’s some connection between the two events—and a lot of symbolism.


WXYZ-TV reports two vehicles blocked traffic on eastbound I-94 this morning near the Lodge Freeway in Detroit.

Michigan State Police say the vehicles stopped traffic as a protest against the impending emergency manager appointment in Detroit.

More from WXYZ-TV

Two vehicles involved in what Michigan State Police are calling a protest brought traffic to a halt on EB I-94 near the Lodge Freeway in Detroit Monday morning.

Police were able to pull the protestors over and write them citations.

The vehicles had signs on them, one reading "Democracy" and another reading "Detroit emergency manager."

They are upset over Governor Rick Snyder declaring the city of Detroit is in the midst of a financial emergency and the search for an emergency financial manager.

They report this isn't the first time protestors have backed up traffic.

On Wednesday, a handful of protestors slowed traffic on southbound Interstate 75 near Interstate 94 in Detroit. Traffic also was backed up on northbound I-75.

The city is appealing the state's decision that the city is in a 'financial emergency' and that city leaders have no plan to address the problem.

A hearing over the matter is scheduled for tomorrow.

Capitol Building, Lansing, MI
Matthileo / Flickr

Each Saturday, Rina Miller and Jack Lessenberry look at some of the top regional news stories of the week.

Carl Levin won't run for re-election

We got a political bombshell this week when U.S. Senator Carl Levin (D-MI) said he won't run for re-election next year. But Lessenberry says this wasn't entirely unexpected. He expects a lot of people to run for Levin's seat including Congressman Gary Peters and Congressman Mike Rodgers.

Detroit prepares for an emergency manager

The Detroit City Council says "not so fast" when it comes to the governor’s appointment of an emergency manager. Mayor Bing says it's too late to resist the appointment. It's just going to happen. Lessenberry says the City Council may well appeal, but he doesn't expect the Governor to reverse his decision. "They are doing a pro-forma thing mainly for political consumption."

A challenge to Michigan's same-sex marriage ban

The discussion of same-sex marriage in Michigan was put on hold after it looked like a federal judge might make a ruling on Michigan’s constitutional amendment. Lessenberry says "no one can really fault U.S. District Judge Bernard Friedman for doing this because the U.S. Supreme Court is going to rule on a case in California on a similar law."  He says that way Friedman can craft a ruling that isn't in conflict with the U.S. Supreme Court's ruling.

Jack Lessenberry is Michigan Radio’s political analyst. He joins us Saturday mornings to review the week’s top news stories.

U.S. District Judge Bernard Friedman heard arguments today for and against Michigan's constitutional amendment banning same sex marriage and civil unions.

There was some thought that the judge would rule on the case today. Instead, he decided to wait until after the U.S. Supreme Court hears arguments on two unrelated same-sex marriage cases.

On today's show, we got an update on the court case in Detroit.

And, we heard about what's working to increase high school graduation rates. One Wayne County school district has made a dramatic difference in how many of its kids graduate from high school.

But first, we talk "re-shoring" with Tobias Schoenherr, a professor of supply chain management at Michigan State University, and Tom Harrison, CEO of Michigan Ladder Company based in Ypsilanti.

"Re-shoring is the opposite of "outsourcing" and "off-shoring."

Listen to these interview and more by clicking on the audio above.

Shawn Wilson / wikimedia

The Detroit City Council will challenge Governor Snyder’s decision to appoint an emergency financial manager for the city.

The Council also approved a resolution asking Governor Snyder to delay his appointment.

They’re asking that he wait until a new emergency manager law kicks in later this month.

Council member Ken Cockrel Junior says that would give the city more choices.

"You could take the existing consent agreement, actually rewrite it and enhance it. So, what do you want to call that? A new consent agreement, or modification of the old one? I think we’d have the ability to do that," said Cockrel.

The appeal comes even as Detroit mayor Dave Bing declined to sign on to the effort.

"This decision does not mean that I'm turning the keys to our city over to the state or throwing in the towel," said Bing. "It is simply a fight that we cannot win at the eleventh hour in a 30-minute appeals hearing."

A hearing is scheduled for next Tuesday in Lansing.

It is with this backdrop that we turned to Detroit News businesses columnist Daniel Howes.

He wrote a column about how businesses are moving to Detroit despite all these problems.

Listen to the full interview above.

John Curnow / Flickr

Detroit was one of 35 cities to receive a letter from the U.S. Olympic Committee asking for a bid on the 2024 Olympics.

ABC News reported the letters were sent "to gauge the interest of cities that may have the ability to host an event with the scope and scale of the Olympic Games."

Maybe they haven't been reading the headlines about Detroit lately.

Mayor Bing politely declined their invitation this morning.

Here's his statement:

“While we appreciate the opportunity and recognize that we have successfully hosted many major sporting events, including the NCAA Final Four; MLB All-Star Game; NFL Super Bowl; two World Series; and nine NHL Stanley Cup finals, this decision is not an easy one. With our rich history of hosting major events and Detroit’s prime location on an international border, we recognize that this makes Detroit an appealing candidate to potentially host the 2024 Olympics and Paralympics.

"However, the bid calls for a $10 million upfront bid process payment and adding more than a $3 billion operating budget commitment -- not including cost associated with venue construction and other infrastructure cost.

"Unfortunately, due to the timing and uncertainty of Detroit’s long-term financial stability, we must respectfully decline to participate.”

Some supporters aren't giving up. On the "Detroit 2024 Summer Olympic Games Support" Facebook page, this was posted: 

Pay no attention to what Mayor Dave Bing said about Detroit not bidding for the 2024 Summer Olympic Games. We all agree that he won't be Mayor of Detroit next year. Financial issues or not the Detroit Olympic Movement will keep moving.
User: Brother O'Mara / Flickr

Big court challenge against Michigan's ban on same-sex marriage

In 2004, Michigan voters banned same-sex marriage and civil unions.

That ban is being challenged in federal court, and MPRN's Rick Pluta reports a decision could come today:

...a federal judge could rule as soon as today on a challenge to the state’s ban on same-sex marriage and civil unions. This occurs as the U.S. Supreme Court is about to hear two cases dealing with gay marriage. In the Michigan case, a lesbian couple sued not because they want to be married, but because they want to be parents.

No united front from Detroit

Yesterday morning, an aide to Mayor Dave Bing indicated Bing would support Detroit City Council's challenge against the state.

Last night, we found out that wasn't the case. 

Michigan Radio's Sarah Cwiek covered the story for us. Bing said he tried to figure out a way to support City Council's challenge against the state's finding that the city is in a financial emergency and that there's no plan to end it.

"However, when it became clear to me that the Council wanted to go further and request a hearing to appeal the pending appointment of an Emergency Manager or request an enhanced consent agreement— I decided that the fighting must stop now. 

"We must focus on working together so that we can remove the need for an Emergency Manager in the required 18 months."

Fighting continues over Detroit School Boards emergency manager

From the Detroit Free Press:

The Detroit school board filed a motion in Wayne County Circuit Court accusing Roy Roberts, the state-appointed emergency financial manager, of violating a Feb. 20 court order that confirmed the board's authority over the school system's academic operations.

The Detroit City Council will press a challenge to Governor Snyder’s decision appointing an emergency financial manager—but they’ll do so without Mayor Dave Bing’s support.

The Council voted to approve that challenge Wednesday afternoon. Bing then held a late afternoon press conference declaring his opposition to the Council's tactics.

“I tried to figure out a way to support the Council in their efforts to appeal the Governor’s decision and to challenge the Financial Review Team’s assertion that we did not have a plan in place to fiscally stabilize the City,” Bing told reporters.

Detroit Mayor Dave Bing.
Kate Davidson / Michigan Radio

Detroit City Council members have been hoping they could put up a united front against an emergency manager with Mayor Bing.

Now it looks like they have some support in that effort.

At a council meeting this morning, one of Mayor Bing's staffers said he would support the council's effort to challenge the state.

The city plans to contest the state financial review panel's finding that Detroit is in a "financial emergency" and that the city has no plan to address the problem.

User: Brother O'Mara / Flickr

Detroit Council working on plan to counter emergency manager

The council will meet this morning. The Detroit News reports they want to hear more from Mayor Dave Bing:

The full panel plans to meet at 9 a.m. today to study its options for appealing Gov. Rick Snyder's determination that the city is in a financial emergency, paving the way for an emergency manager.

Council members have asked Bing to come to the table and said they may vote on a response to the governor by Thursday. The city has until Monday to appeal.

Bill aimed at stripping DNRs power to manage for biodiversity clears Senate

Senator Tom Casperson-R (Escanaba) has a victory. His bill, Senate Bill 78, would keep the Michigan Department of natural resources from setting aside land for the purpose of maintaining biological diversity. The Senate passed that bill along a party line vote. 26 Republicans for, 11 Democrats against. You can read more about this legislation from Michigan Radio's Rebecca Williams.

Lansing casino project loses court decision

A federal judge has issued an injunction last night against the tribe that wants to build the casino - the Sault Ste. Marie Tribe of Chippewa Indians.

Michigan Radio's Steve Carmody has been following this story:

U.S. District Judge Robert Jonker granted the state's motion for an injunction pending resolution of the Attorney General's lawsuit. The judge says the tribe cannot apply to the federal government "to have the … property taken into trust unless and until it obtains a written revenue sharing agreement with the other federally-recognized Indian Tribes in Michigan."

User: Brother O'Mara / flickr

Blocking a Detroit emergency manager

Gov. Snyder announced his plans last Friday. Talk of blocking an emergency manager followed.

More from the Detroit News:

Protest against a potential emergency manager in Detroit gained momentum on multiple fronts Monday, with Democratic lawmakers, unions and community activists vowing to fight through the courts and possible federal intervention.

Matt Helms of the Detroit Free Press reminds us that Detroit's bond rating "is deep into junk territory." An emergency manager appointment might help the rating, but it also might hurt it: 

...Moody’s...notes that Michigan’s new emergency manager law, Public Act 436, which takes effect March 28, also provides a clearer path to a Chapter 9 municipal bankruptcy, an option Snyder, state Treasurer Andy Dillon and many city officials said they want to avoid taking.


"Right-to-work" goes on tour

 They won't push right to work in the Pure Michigan campaign anymore, but there is a road tour. 

Americans for Prosperity along with several Republican state representatives are touring cities in Michigan singing the praises of the state's new 'right-to-work' law.

MLive' Sarah Stonestreet was at the meeting in Jackson last night: 

The visit was part of a right to work town hall tour to speak on the positive aspects of the issue and was the first stop of the event, which is scheduled to visit 11 cities by March 28. Other stops include Grand Rapids, Kalamazoo, Traverse City and Brighton.

 
Storm coming, but will mostly miss Michigan
  The southwest corner of the state might get clipped with up to five inches possible, but the rest of us are in the clear. If you're heading south, drive carefully. From MLive

If you are driving south along I-75 later today through Ohio, you will be dealing with a mess.

Governor Snyder announced last week that he’ll appoint an emergency manager for the city of Detroit.

That means an unelected person will have sweeping powers to try and stop Detroit’s financial hemorrhaging.

Of course, emergency managers are controversial. And though they don’t have a choice in the matter, Detroiters are very much divided about whether this is a good thing.

“Both are going to hurt, which will hurt the less?”

LiveStream

Gov. Snyder announced today that he agrees with a state financial review team finding that Detroit is in a "financial emergency." His announcement clears the way for a state-appointed emergency manager. Snyder has a candidate in mind, but wouldn't give up any details on who he has chosen.

Detroit Mayor Dave Bing reacted to the news this way:

LiveStream

With urgency in his voice, Gov. Snyder today announced that the city of Detroit is in a 'financial emergency.' An emergency financial manager appointment could follow. The city has ten days to appeal Gov. Snyder's finding.

Update 12:30 p.m.

When asked what role Detroit City Council would have in a city with an emergency financial manager, Snyder said he thinks they're "going to have an opportunity to define that."

"If they just want to yell... and not come up with any solutions," Snyder said, he doesn't expect them to be part of the process.

Gov. Snyder praised the work of Detroit Public Schools' emergency financial manager Roy Roberts and said he hopes a new emergency financial manager for Detroit would have similar success.

The school system has been under an emergency financial manager for years. When asked how a Detroit emergency financial manager could get the job done in 18 months, Snyder responded that the new emergency manager law calls for the appointment to be reviewed after 18 months.

In closing his remarks Gov. Snyder made a plea for people to stop fighting over this decision.

"This is not the time for fighting and blame. Detroit is in a financial emergency," the Gov. said.

"I want to solve it. I want to help you solve it. Let's just go. I would appreciate your support in this. It's about speaking up and taking action," said Snyder.

The Detroit Free Press reports Detroit City Council members are considering a lawsuit to stop the appointment of an emergency financial manager:

The council has been discussing its options during a meeting today, including the filing of a lawsuit to challenge an appointment.

“We have to fight till the end, but we have to fight smart,” Councilwoman Saunteel Jenkins said this morning.

12:15 p.m.

Gov. Snyder indicated he does have a candidate in mind for the job of emergency financial manager of Detroit, but he would not name that person saying it would be inappropriate to do so at this time.

The city has ten days to appeal his finding of a 'financial emergency.'

Gov. Snyder said the people in Detroit are suffering because of its failing finances.

When asked if the state would bring more resources into Detroit to help the police department, Snyder said he would rather 'partner' with the police department in the city to improve crime prevention.

12:08 p.m.

Saying he looks at today as a 'sad day' for the city of Detroit, Gov. Snyder said the city is in a 'financial emergency.'

City leaders now have ten days to appeal this decision. After that, an emergency financial manager can be named to run things in the city.

"We went from the top to the bottom over the last 50 or 60 years [in the city of Detroit]", said Snyder.

If city leaders contest the finding, there will be a hearing on March 12th, the Gov. said.

Matt Helms / Twitter

Governor Rick Snyder will be talking about Detroit's financial crisis today at noon.

If the governor declares a financial emergency today, city officials have 10 days to contest the finding before the governor can name an emergency manager.
    
Eight other cities and school districts are already being run by state-appointed managers.

You can watch the Governor's announcement below:

Watch Live and On Demand video from Detroit Public TV.

City of Detroit

Gov. Rick Snyder's office just put out a news release saying the Governor will hold a "forum with invited Detroiters to discuss Detroit's financial situation."

It will be held at tomorrow at noon at the Detroit Public Television studios, 5057 Woodward Ave. in Detroit.

A live stream will be available as well.

It's widely expected that Gov. Snyder will appoint an emergency manager for the city.

Earlier today, the Detroit Free Press reported that Mayor Dave Bing said he doesn't expect Snyder to offer a name tomorrow:

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