Tagged: emergency financial manager

After 45 days in office, a report from Detroit’s Emergency Manager Kevyn Orr was released this morning, taking an in-depth look at the city’s financial situation.

What’s clear from the 41-page report — Detroit is broke and its finances are in worse shape than previously thought. The city has almost $9.5 billion bonds and other debt, almost $6 billion in unfunded retiree health care, and will end its budget year with a shortfall of more than $160 million.

What do these numbers really mean for the city? And why is there such a disparity between what we’ve heard from city leaders and the report?

Detroit’s Emergency Manager Kevyn Orr joined us in the studio today, to answer these questions and more.

Listen to the full interview above.

  State officials say the financial emergency in the city of Ecorse has been resolved.
 
The city has been under the control of an emergency manager since 2009 – when then-Governor Jennifer Granholm made the appointment.
 
Now, word comes that the city’s budget is balanced and a $20 million deficit has been eliminated.
 
But the announcement doesn't mean elected officials are getting their authority back right away. That’s because Joyce Parker – Ecorse's former emergency manager - has given the city a two-year budget that it must follow.
 
Parker – who we should note is also the emergency manager of Allen Park– joined us today.

Listen to the full interview above.

State officials say the financial emergency in the city of Ecorse has been resolved.

Under the direction of emergency manager Joyce Parker, the city's nearly $20 million deficit was eliminated.  Its police and fire departments were merged.   

The city's operating costs were reduced by $4.3 million a year, while its revenues were boosted by $2.3 million. 

And Ecorse's bond rating went from "junk" to "A", with the help of special legislation at the state level.

So, Ecorse's emergency manager is stepping down.  Sort of.

Today's the day.

It's the day the state's new emergency law goes into effect - the day current 'emergency financial managers' become 'emergency managers.'

Last November, Michigan voters repealed the state's much maligned Public Act 4 (emergency manager law). The majority of voters felt the law put too much power in one person's hands.

Legislators reacted to the repeal by passing a modified emergency manager law (Public Act 436).

It restores a lot of the old powers granted to emergency managers under the old law, but with some differences.

Here are some similarities and differences between the old EM law, and the new one.

It’s been a week since Governor Snyder announced Kevyn Orr as Detroit’s emergency manager.

Orr, begins his new job on Monday.

Today, Business Columnist at the Detroit News Danel Howes wrote a column saying Detroit's situation is reminiscent of General Motors circa 2008.

He argues that what it really takes is an outsider - someone who isn’t inside of the financial problem - to fix things.

That’s what happened with the auto bankruptcy as well.

That creates a problem, particularly for Orr. There's a certain level of distrust among Detroiters who think Orr “isn’t one of us” - that he can’t really understand “our” problems.

What of the very strong cry that bringing in this unelected outside manager effectively strips Detroit citizens of their right to elect their leader?

Howes wrote in today’s column:

"Detroit's culture of denial, dysfunction and entitlement, as obvious in the city's slide as it was in the auto bankruptcies, is a primary reason change here eventually is imposed from the outside."

We’ve seen the auto companies come back from the fiscal edge.

And much like what happened with the auto industry, he argues that over time those associated with the past failures begin to be sidelined and new leadership begins to emerge.

This is the narrative that Howes believes we’ll see from Detroit in due time.

To hear our full interview with Howes, click the link above.