Kevyn Orr

Sarah Hulett / Michigan Radio

 Detroit emergency manager Kevyn Orr has cancelled a planned bus tour for the city’s Wall Street creditors.

Some of those creditors are in Detroit this week to meet with Orr, and to take a look at some of the city’s assets.

The planned tour would have put the creditors on a city bus, and taken them for some pretty grim sightseeing.

It was meant to convince them that the city’s condition is dire, and bondholders should big accept losses on their Detroit debt.

User: Brother O'Mara / flickr

Saunteel Jenkins replaces Charles Pugh as Detroit City Council President

"Saunteel Jenkins is the new President of the Detroit City Council. The Council voted on new leadership after it lost its two former top officials. Jenkins replaces Charles Pugh, who has vanished from the public eye amidst allegations of a questionable relationship with a teenager," Michigan Radio's Sarah Cwiek reports.

Proposed legislation would let voters eliminate income tax

Republican state Representative Bob Genetski is sponsoring legislation that would let voters decide whether to get rid of the state's income tax.

"He supports raising the state’s sale’s tax to make up for the lost revenue. Former director of the state House Fiscal Agency Mitch Bean says the plan would leave an $8.5 billion dollar hole in next year’s state budget," Jake Neher reports.

Orr cancels bus tour with creditors

Detroit emergency manager Kevyn Orr has canceled a planned bus tour meant to convince Wall Street creditors that the city's condition is dire and they should accept big losses on its debt.

"Orr says the tour could be rescheduled. But it increasingly seems that his negotiations with creditors are hitting a wall. City Council member Ken Cockrel echoes what many think--that resistance from creditors is speeding up Detroit’s timeline for a possible bankruptcy filing," Michigan Radio's Sarah Cwiek reports.

Sarah Cwiek / Michigan Radio

 The battle over control of Detroit’s two pension funds is heating up, with big consequences for city retirees and other creditors as the city creeps closer to possible bankruptcy.

Detroit has two pension funds: A general retirement system for most employees, and a separate system for the police and fire departments.

The dispute revolves around how well-funded both systems are. The exact number is key, because state law allows emergency managers to replace pension boards if a system is funded below 80%.

During the last year of World War II, as millions died in history’s most sustained orgy of violence, other men quietly and secretly planned what to do after the war was over. They worked out the details of the division of Germany and the administration of Japan even before those countries had been occupied. Doing that in advance was essential.

Historians agree that was a precondition for Europe’s eventual recovery, and Japan’s rebirth as a prosperous democracy.  This advance planning also went a long way to prevent a new world war breaking out in the rubble of the old.

I mention this because I hope somebody is thinking about what to do when Detroit declares bankruptcy, and even more importantly, when that process is over. Planning how the city will begin the process back to some form of prosperity.

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Detroit's pension systems vs. Kevyn Orr

Detroit has two pension systems and both have posted fairly strong funding levels. But emergency manager Kevyn Orr has questioned some of those numbers. Orr spokesman Bill Nowling says using more realistic projections changes the funding levels, but Detroit’s pension systems say their numbers are correct.

Michigan schools might consolidate services

Michigan schools could be forced to consolidate many of their services into county-wide systems if state lawmakers decide to go along with a plan released yesterday by state Superintendent Mike Flanagan. Flanagan wants services like transportation, food, and staff training to be handled at the county or regional level.

“And local districts, they can spend time on student achievement issues and not worry about all that other stuff,” Flanagan told Michigan Public Radio's Jake Neher.

Detroit City Council will select new leader

The Detroit City Council is expected to select a new president today. The board typically numbers nine but now has six members after two recently resigned and the former President Charles Pugh deserted his duties.

Daniell Walquist Lynch / Flickr

A new nonprofit is demolishing vacant homes (blight) in a northwest Detroit neighborhood.

The organization is called the Detroit Blight Authority, and is working on a project that encompasses all 14 blocks of the Brightmoor neighborhood.

According to a story in the Detroit Free Press, the Blight Authority already collected nearly 100,000 pounds of trash that had been illegally dumped in the neighborhood. Brightmoor encompasses an area of four square miles in Detroit.

mich.gov / Michigan Government

Detroit’s answer to the famous bus tours of New York City is emerging this week.

Well, kind of.

On Wednesday, Detroit’s emergency manager Kevyn Orr will lead creditors on a guided bus tour through the city. But the tour won’t be highlighting the city’s landmarks. Instead, the creditors will be checking out dire conditions in some of Detroit’s neighborhoods.

From the Associated Press:

DETROIT (AP) - Detroit has filed a lawsuit against an insurance company the city says is improperly withholding $11 million a month in casino payments and taxes.

According to The Detroit News, the suit against Syncora Guarantee Inc. was filed on Friday.

Emergency Manager Kevyn Orr says the casino revenue Syncora is holding up each month is enough to pay Detroit firefighters for two months.

A representative for Syncora declined to comment when contacted by the Detroit Free Press.

Well, we’ve just about made it halfway through the year.  In fact, for most businesses and most states, Monday is the start of a new fiscal year. Michigan, however, starts its fiscal year October 1.

Why?  Well, it has to do with an accounting trick to deal with a fiscal crisis back in the nineteen seventies. Yes, the more things change, the more some things stay the same.

But this has been a pretty momentous six months. On New Year’s Day, elected officials were still fully in charge in Detroit.  Today, the city is being run by an emergency manager. Six months ago, while everybody knew Detroit finances were bad, nobody dreamed the total debt might be near twenty billion dollars.

Detroit emergency manager Kevyn Orr has reminded two of the city’s biggest unions that their contracts are expiring soon.

In letters sent this week, Orr emphasized that he’s not required to conduct collective bargaining sessions.

Under the state’s emergency manager law, he could impose new terms on the unions.

Mark Young is President of the Detroit Police Lieutenants and Sergeants Association, which along with AFSCME Council 25 is one of the affected unions.

He says the officers should get a new collective bargaining agreement.

City of Detroit

This past Tuesday, Detroit City Council President Charles Pugh was absent for his second straight week of council sessions. His whereabouts for the last few days have been unknown and his public Facebook and Twitter pages were taken down last week.

Recently, Pugh is facing allegations that he had an inappropriate relationship with a 17-year old male student he mentored.

User: Brother O'Mara / Flickr

Michigan doesn't need to clear new election laws with the federal government

"The U.S. Supreme Court’s decision striking down a key part of a voting rights law means the state of Michigan will no longer have to clear new election laws with the federal government," Rick Pluta reports.

Two counties, Buena Vista in Saginaw County and Clyde in Allegan county, were covered by the federal Voting Rights Act after failing to provide adequate help to Spanish-speaking voters in the 1970s.

Kevyn Orr denies medical leave for City Council president

Detroit’s emergency manager Kevyn Orr has denied City Council President Charles Pugh's request for medical leave. Pugh has been absent from Council meetings for a few days, and he has not returned phone calls. Orr says Pugh must report to work by 5:00 pm on Wednesday, or be stripped of his salary and responsibilities.

Buena Vista School District lays off most teachers and staff

The Board of Education for the Buena Vista School District near Saginaw approved layoffs for nearly all of its teachers and staff on Tuesday.

"School officials the district will have about $2,000 as of July 5. Board President Randy L. Jackson says the district still is making plans for fall classes. The board approved an application to request a $2.5 million loan from the state to help keep running," according to the Associated Press.

 When this week began, it looked as if the legislature and governor had finally found a compromise formula that would allow Medicaid to be expanded to nearly half a million poor Michiganders. It also looked as if the race for the next mayor of Detroit would come down to a contest between Mike Duggan, a man of many past political jobs, and Wayne County Sheriff Benny Napoleon.

But the week ended with the Medicaid compromise falling apart; Detroit Emergency Manager Kevyn Orr taking steps that probably moved the city closer to a bankruptcy filing, and with  Duggan tossed off the ballot and out of the mayor’s race. On the plus side for Detroit, the Ilitch family announced that a long-rumored six hundred and fifty million dollar new hockey arena would be built on the edge of downtown.

Lead in text: 
Detroit's pension boards have been under investigation by the SEC and federal prosecutors. Now Kevyn Orr is ordering his own investigation.
Politics & Government
Steve Carmody/Michigan Radio

Detroit Emergency Manager Kevyn Orr is turning his focus to the city’s pension system.

This morning, Orr directed Detroit’s Inspector General and Auditor General to begin an investigation into the city’s pension funds.

The order specifically directs investigators to look for evidence of “possible waste, abuse, fraud and corruption”.

A spokesman says Detroit’s emergency manager has been looking into the city’s pension system, and what’s been found so far suggests further investigation is needed.

The probe is expected to take 60 days.

We didn’t have an early spring this year, but it looks like an early summer. I say that because while it is still technically spring, the authorities are already engaged in what has been a late summer Michigan ritual, digging up a field to look for Jimmy Hoffa.

Usually, it strikes me as strange that this case still gets so much attention, but this year we’ve been so overwhelmed with news from Detroit that we probably need a little escape.

Everyone knows, of course, that Rick Snyder was elected governor three years ago. And by now it is safe to say that everyone has an opinion about him. Some think he is saving the state.

Others are vowing to do everything they can to prevent him from winning a second term. But stop for a minute.

Do you remember who Snyder defeated to be elected governor in the first place? Lansing Mayor Virg Bernero, the Democratic nominee in what was an impossible year for his party.

User: Brother O'Mara / Flickr

Palisades returns to service

The Palisades Nuclear Power Plant in southwestern Michigan re-opened yesterday after finishing repairs to a tank that leaked slightly radioactive water into Lake Michigan. The plant has had nine shutdowns since September 2011; company spokeswoman Lindsay Rose says the tank has been redesigned to guard against future leaks. The Nuclear Regulatory Commission says there was no public health risk from the radioactive release.

Detroit's water department faces restructuring

Detroit emergency manager Kevyn Orr has big plans to restructure the city’s water department. It would largely keep the same governing structure, with representatives from Detroit and surrounding counties, but the authority would also pay Detroit to lease the department’s assets.

“Orr’s plan suggests that spinning the water department off to an authority would allow it refinance its debt, and borrow more readily for capital improvements,” Michigan Radio’s Sarah Cwiek reports.

MSU law professor running for Michigan attorney general

Michigan State University law professor, Mark Totten, announced yesterday that he is running for Michigan attorney general in 2014. Totten, a Democrat, used to be a federal prosecutor. Democrats will choose their attorney general candidate at a nominating convention next year; no other Democratic candidates have entered the race yet. Republican Attorney General Bill Schuette is expected to seek re-election.

Kate Boicourt / IAN

Detroit’s emergency manager has a plan for the city’s water department—but not everybody likes it.

Kevyn Orr proposes leasing the system to a “Metropolitan Area Water and Sewer Authority” as it part of a larger restructuring of city operations.

It’s hard to be shocked by anything relating to Detroit’s financial crisis. But frankly, I was, when I read the details of the report Emergency Manager Kevyn Orr gave to the city’s creditors.

For months, we’d been hearing that the city had as much as $14 billion in long-term debt. The real figure is more like twenty billion. No other city in the country pays even twenty percent of its revenue for what they call legacy costs -- debt service and pensions. Detroit pays more than forty percent.

Detroit Institute of Arts
Maia C/Flickr

Michigan Attorney General Bill Schuette has released a legal opinion that says the collection held by the Detroit Institute of Arts cannot be sold if the city goes into bankruptcy.

The opinion was issued in response to a request by Senate Majority Leader Randy Richardville.

The opinion says the assets owned by the Detroit Institute of Art are held in a public trust for the people of Michigan, and cannot be used to pay off the city's debts. Schuette says in the opinion, "In Michigan, we not only appreciate our cultural treasures, we guard them zealously."

Detroit has $15.6 billion dollars in long-term liabilities, and emergency manager Kevyn Orr will need to take some drastic measures to pay those debts.

Kevyn Orr -- who is a bankruptcy attorney and turnaround expert -- is in the middle of negotiating a debt reduction plan with the city's creditors. He has said there are no guarantees the DIA's assets would be off the table in the event of a bankruptcy.

When Kevyn Orr was announced as Detroit's emergency manager, he said he took the job because of the challenge - the "Olympics of restructuring" he called it.

Today, Orr unveiled his plan for that restructuring at a two hour meeting with people representing banks, insurers, pension funds, unions, and other companies holding Detroit's debt.

You can read his 128 page "Proposal for Creditors" here.

Matt Helms / Twitter

Update 12:45

The meeting has ended. We'll have updates later today on Orr's plan and reaction to it from other stakeholders.

The Detroit Free Press' Matt Helms tweeted a shot of Orr talking to the media after the meeting:

State of Michigan / Michigan.gov

Detroit’s emergency manager Kevyn Orr sits down with the city’s major creditors Friday.

The meeting sets up negotiations that could help Detroit avoid filing for bankruptcy—or lay the groundwork for it.

Orr will gather all the city’s big creditors—unions, retirees, and banks—to pitch his plan.

They’ll all be asked to take some major losses to help Detroit shed some of its crippling debt load, estimated at a least $15 billion.

Steve Carmody/Michigan Radio

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, political analyst for Michigan Information and Research Service. On tap today, the latest happenings around the Medicaid expansion bill; developments in Detroit about whether the selection of the city's emergency manager, Kevyn Orr, was in conflict with the Opening Meetings Act; and possible bankruptcy proceedings in the city. 
Bernt Rostad / creative commons

It’s Thursday, which means it’s time to check-in with Detroit News business columnist Daniel Howes.

The theme for today's conversation seems to be: the Day of Reckoning is at hand.

Tomorrow, Detroit Emergency Manager Kevyn Orr is going make a pitch to 150 representatives and creditors to try to win concessions from them. The pitch could very well be the precursor to the city filing Chapter Nine bankruptcy.

Daniel Howes joined us to discuss the issue.

Listen to the full interview above.

Close your eyes for a moment and think about what America looked like, say, in 1962, the furniture, the architecture, the cars. We explore the huge role Michigan had in mid-20th century design.

And, before National Fudge Day--yes there is such a thing--we take a trip to Mackinac Island, which has a pretty legitimate claim as the modern day Capital of Fudge.

And, we interviewed an entrepreneur from Waterford who has developed a unique way for women to show appreciation for the men in their lives.

Also, we took a look at the recent Pew research report.

First on the show, we turned to Detroit News Columnist Daniel Howes for our weekly Thursday check-in.

The theme for today's conversation seems to be: the Day of Reckoning is at hand for Detroit.

Staff / Michigan Municipal League

Governor Rick Snyder’s administration intends to appeal a judge’s order to reveal the names of all the candidates he considered as potential emergency managers for Detroit.

A lawsuit claims the hiring process violated the state’s open meetings law.

The judge ordered the state to turn over e-mails and other records related to the search that culminated in hiring Kevyn Orr to steer Detroit out of a financial crisis. The lawsuit claims the decision was made well before a state board publicly interviewed and voted to hire Orr.

User: Brother O'Mara / Flickr

Medicaid goes to House floor

Yesterday, the Michigan House Competitiveness Committee voted to send the Medicaid expansion bill to the floor. Michigan Radio's Jake Neher reports that while Republicans were split on the issue, “Democrats on the panel all voted in favor of the bill. That’s after lawmakers dropped a controversial plan to limit able-bodied adults to four years on Medicaid. But they say they’re still concerned about language that would raise premiums and co-pays for some patients after four years.”

Questions for Governor about Detroit's emergency manager

Concerns have been raised about Governor Rick Snyder’s process in selecting Kevyn Orr as Detroit’s emergency manager. Rick Pluta reports that “a judge says Governor Rick Snyder’s office must turn over e-mails and other records related to the candidate search for a Detroit emergency manager. The judge’s order is related to a lawsuit that alleges Detroit emergency manager Kevyn Orr was hired illegally. The lawsuit claims the process was rigged and carried out in violation of Michigan’s open meetings law.”

Heroin incidents on the rise in Michigan

A rash of heroin overdoses occurred in Washtenaw County last week, and incidents are on the rise across parts of the state. “Authorities say a particularly toxic heroin mix known by some on the street as ‘black shadow’ appears to be circulating in southeast Michigan communities, causing a rise in overdoses and at least one death this month,” report Robin Erb and Tammy Stables Battaglia of the Detroit Free Press.

Jeff Wattrick / Deadline Detroit

The city of Detroit is “technically insolvent” and suffers from an “addiction to debt.” That’s according to Detroit's Emergency Manager Kevyn Orr, who described the city’s situation at his first public meeting last night.

About 350 people were on-hand at the start of the meeting, about 250 made it into the meeting but about 100 were left out because of over-crowding.

Detroit Free Press Columnist Rochelle Riley covered the meeting, and she joined us today in the studio.

Listen to the full interview above.

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