Well, it was quite a week for our state’s largest city. Voters elected a white mayor for the first time since 1969.
Had you gone to Lloyds of London 10 years ago and bet that within a decade, America would have a black president and Detroit a white mayor, today you would be very rich indeed.
But in the city Cadillac founded, attorneys today will offer closing arguments in a trial to determine whether the city will be allowed to file for bankruptcy. While everything in Federal Judge Steven Rhodes’ courtroom is by the book, there is an element of Kabuki-theater unreality about it all.
Nobody really believes the application will be denied. If it were, creditors would tear what remains of Detroit apart with the efficiency of a pack of wolves with a lamb.
Former state Treasurer Andy Dillon finished his testimonial in Detroit’s bankruptcy trial, bringing his three-day testimonial to a close.
On Tuesday, Dillon defended his recommendation for Detroit’s bankruptcy filing, saying it was a “last-resort option.” But some of Detroit's creditors are arguing that the decision to file for Chapter 9 bankruptcy was not exactly a last resort, but instead a quick decision that overlooked an opportunity to continue negotiations.
“Despite the implications, I wasn’t attempting to mislead anyone,” Orr testified Monday under questioning from city attorney Greg Shumaker.
Orr’s answer caused U.S. Bankruptcy Judge Steven Rhodes to interrupt with a follow-up question.
“Excuse me one second,” the judge said. “What would you say to that retiree now?”
“I would say his rights are in bankruptcy now,” Orr told the judge. “I would say his rights are subject to the supremacy clause of the U.S. Constitution.”
“That’s a bit different than sacrosanct, isn’t it?” Rhodes replied.
Orr continued to deny allegations that there was no attempt to negotiate with creditors "in good faith" prior to the city's bankruptcy filing. It's a pivotal point lawyers for the city's creditors are trying to prove. If they can do it, the city might not be eligible to reorganize under the protection of federal bankruptcy laws.
Orr ended his testimony this morning around 11 a.m.
Next to the witness stand, Snyder aide Richard Baird and former state treasurer Andy Dillon.
DETROIT (AP) - While a judge determines the future of Detroit's bankruptcy case, key people are meeting behind the scenes to try to reach deals.
Private mediation sessions are scheduled for Wednesday, at the same time the city tries to convince a judge that Detroit is eligible to fix its debts in bankruptcy court. The trial in front of Judge Steven Rhodes started on Oct. 23.
Judge Steven Rhodes will hear arguments from city lawyers about why Detroit qualifies for Chapter 9 protection.
University of Michigan law professor and bankruptcy expert John Pottow says some city creditors will argue that Detroit’s bankruptcy filing was pre-determined--and there was no good-faith bargaining process, as the federal bankruptcy code requires.
"A trial to determine Detroit’s fate in municipal bankruptcy starts today. Judge Steven Rhodes will hear arguments about whether the city qualifies for Chapter Nine protection," Sarah Cwiek reports.
Judge says Detroit EM candidate names should be revealed
"A Wayne County judge has ruled that state officials must turn over a list of possible candidates for the Detroit emergency manager job," Cwiek reports. This comes after a union activist filed a lawsuit saying the state violated the Open Meeting Act when it appointed Detroit's emergency manager Kevyn Orr.
DEQ proposes new rules for fracking
The Department of Environmental Quality has proposed new rules for fracking in Michigan. "The rules will require disclosure of chemicals used by developers, and make it easier for people to track where “fracking” is occurring," Rick Pluta reports
"Governor Rick Snyder’s controversial NERD Fund will be shut down this week and replaced. Its official name is the New Energy to Reinvent and Diversify Fund. Governor Snyder used the fund to pick up costs he says should not be paid by taxpayers," Rick Pluta reports.
Highland Park could have an Emergency Manager soon
A state board has determined that the city of Highland Park has probable financial distress. Gov. Rick Snyder will next appoint a review team which could lead to an appointment of an emergency manager. According the Associated Press, "The Local Emergency Financial Assistance Loan Board also determined there is no probable financial distress in Ecorse Public Schools. A similar hearing is scheduled Wednesday for Royal Oak Township."
Detroit City Council rejects loan deal from EM
"The Detroit City Council has rejected a proposed $350 million loan deal. Emergency manager Kevyn Orr . . . planned to use most of the $ 350 million to pay off two banks. That’s controversial because he’s proposed much steeper cuts for other Detroit creditors. Bankruptcy court Judge Steven Rhodes will have to sign off on the deal," Sarah Cwiek reports.
“Legislation at the state Capitol would let downtown bars and restaurants sell alcohol until 4 am. Michigan’s liquor code generally bans alcohol sales between 2 am and 7 am,” Jake Neher reports.
Detroit EM talks DIA assets
“Detroit's state-appointed emergency manager Kevyn Orr says the Christie's auction house will finish an assessment of city-owned pieces at the Detroit Institute of Arts this month, and he defends including their possible sale in the city's bankruptcy process,” the Associated Press reports.
State rejects private prison
“Michigan has rejected allowing a privately run, for-profit prison to house about a thousand inmates. The state turned down two bids because there was no savings for taxpayers,” Rick Pluta reports.
Detroit Emergency Manager Kevyn Orr has sent out the strongest hint yet that prized pieces in the DIA collection are on the table as a way to put money into the city coffers.
Without offering many details, Orr told the Detroit Economic Club today that there are ways for the DIA to make money from its artwork that might not involve outright sales, but perhaps would involve long-term leases.
Orr was clear -- he said he must consider ways to use the museum's treasures to help the bankrupt city.
And, earlier this week, another one of the city's "jewels" was back in the spotlight.
The State and Mayor Dave Bing announced an agreement under which the State DNR would run Belle Isle as Michigan's 102nd State Park.
Detroit News business columnist Daniel Howes joined us to talk about all this.
DETROIT (AP) — A nonprofit fund that Gov. Rick Snyder created is paying for housing and some other expenses for Detroit's state-appointed emergency manager.
The Detroit Free Press and The Detroit News report payments by the New Energy to Reinvent and Diversify Fund previously weren't disclosed.
Kevyn Orr was hired in March. Snyder spokeswoman Sara Wurfel says the fund paid $4,200 a month for Orr's condominium at downtown's Westin Book Cadillac since April. She says it also will cover Orr's commuting expenses to visit family in Maryland.
DETROIT (AP) - Officials from the administration of President Barack Obama are expected to visit Detroit next week to meet with community leaders, elected officials and others.
The Detroit Free Press and The Detroit News report the Sept. 27 meetings are part of ongoing discussions involving the White House amid Detroit's financial troubles. The city this summer made the largest municipal bankruptcy filing in U.S. history.
Time now for our weekly check-in with Detroit News Business Columnist Daniel Howes. On the front-burner: The mediation talks between Detroit Emergency Manager Kevyn Orr and dozens of lawyers representing the city's creditors.
Detroit could end health care coverage for retired employees younger than 65.
Retiree health care costs make up about $6 billion of Detroit’s roughly $11 billion in unsecured debt.
City officials told Detroit pension trustees Wednesday that emergency manager Kevyn Orr is considering the plan. The idea isn’t new, though—Orr floated it as early as June, in his proposal to Detroit’s creditors before the city filed for bankruptcy.
Orr’s plan calls for the younger retirees to shifted onto the new insurance exchanges coming online with the Affordable Care Act.
More streetlight and less blight in Detroit in 60 days
Detroit's emergency manager says residents will be able to notice more robust city services within the next two months. As the Detroit News reports,
"After five months on the job, Kevyn Orr says efforts to restore streetlights and reduce the number of abandoned structures will become more visible within 60 days. Meanwhile, dozens of new public safety vehicles are hitting the streets, and police officers and firefighters are being outfitted with new gear and equipment."
More high speed rail in south Michigan
"Michigan is adding more high-speed rail. The federal government will give the state more than $9 million to upgrade train tracks between Dearborn and Kalamazoo. The upgrade allows Amtrak trains to travel as fast as 110 miles an hour," Tracy Samilton reports.
Funding boost will allow more kids in preschool
"As many as 16,000 more 4-year-olds will be able to attend preschool in Michigan this fall, thanks to a big boost in the state's early education budget," the Associated Press reports.
That information is coming from a report on the city’s General pension fund from consulting firm Conway MacKenzie. According to the report, more than $532 million was distributed as bonus checks over the last two decades, instead of staying in the pension fund’s coffers.
The so-called 13th checks — or annual bonuses — weren’t a part of the city’s pension plan. Yet, the report claims that even in the “good and bad years,” the money intended for the workers’ saving plans was doled out early -- which according to the report, was “effectively robbing (the General pension fund) of precious funds necessary to support the traditional pensions the city had promised.”
The state House took final action yesterday to approve a Medicaid expansion in Michigan. It now awaits Governor Rick Snyder's signature. However, the bill does not have immediate effect, meaning it won’t start until the spring, instead of in January. The delay will cost the state $7 million a day in federal funds.
Duggan is the official winner of Detroit mayoral primary
"The board of state canvassers has declared Mike Duggan the winner of Detroit’s mayoral primary. The state took over the issue after Wayne County elections officials threw out thousands of write-in votes based on how they had been tabulated. Duggan was a write-in candidate. The state restored more than 24-thousand votes to Duggan, giving him a big margin of victory over Wayne County Sheriff Benny Napoleon," Sarah Cwiek reports.
Detroit EM says casino money is key for Detroit
"Detroit's state-appointed emergency manager testified that access to casino tax revenues is key to the city staying afloat financially. During the deposition, Kevyn Orr said he has 'no plans to use art to relieve the liquidity crisis that the city is in now,'" the Associated Press reports.