Once proud city of Detroit on verge of economic collapse

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non-starter

Burnsville, MN

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#1
May 13, 2013
 
Report: Detroit's finances crumbling; future bleak
By COREY WILLIAMS | Associated Press – 28 mins ago..


DETROIT (AP)— Detroit is broke and faces a bleak future given the precarious financial path it's on, according to a new report out by the city's state-appointed emergency manager.

The report was released late Sunday by bankruptcy attorney Kevyn Orr and is his first on Detroit's finances since officially taking the job in March.

Under state law, the report was due within 45 days of Michigan's newest emergency manager law taking effect. Orr's spokesman Bill Nowling had warned last week that the report was an early look at Detroit's fiscal condition and would not be glowing.

The summation is the latest blow to the city which came under state oversight in March when Gov. Rick Snyder selected Orr to handle Detroit's finances. Then, the city estimated its budget deficit to be about $327 million. Detroit also has struggled over the past year with cash flow, relying on bond money held by the state to pay some of its bills.

But Orr reports that Detroit's net cash position was negative $162 million as of April 26 and that the projected budget deficit is expected to reach $386 million in less than two months.

He also warns that the city's financial health might change as more data is collected and analyzed.

"What is clear, however, is that continuing along the current path is an ill-advised and unacceptable course of action if the city is to be put on the path to a sustainable future."

Detroit is the largest city in the country under state control and the city's wallet is now Orr's to command. He dictates how Detroit spends its money, something that had been the responsibility of first-term Mayor Dave Bing and the nine-member City Council.

In a statement Monday morning, Bing said his office plans a "comprehensive evaluation" of the report over the next day.

"A comprehensive review of the emergency manager's financial and operating plan has yet to be conducted," Bing said. "However, my initial review is that the assessment by Mr. Orr of the city's financial condition is consistent with my administration's findings."

The city's problems preceded Bing, a former steel supply company owner and professional basketball Hall-of-Famer.

"This has been a moving target. The historical numbers that have been reported were unreliable," bankruptcy expert Doug Bernstein said. "Certainly, nobody was going to expect the numbers were to be better than were reported."

Orr described the city's operations as "dysfunctional and wasteful after years of budgetary restrictions, mismanagement, crippling operational practices and, in some cases, indifference or corruption."

"Outdated policies, work practices, procedures and systems must be improved consistent with best practices of 21st century government," he said in the report. "A well run city will promote cost savings and better customer service and will encourage private investment and a return of residents."

The report also looked at attempts officials have made to fix problems.

"Recently, tens of millions of dollars of pension funding and other payments have been deferred to manage a severe liquidity crisis at the City," Orr wrote in the report. "Even with these deferrals, the City has operated at a significant and increasing deficit. It is expected that the City will end this fiscal year with approximately $125 million in accumulated deferred obligations and a precariously low cash position."

The city also owes more than $400 million in outstanding obligations, including $124 million used to provide funds for public improvement projects.
non-starter

Burnsville, MN

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#3
May 13, 2013
 
"It's highly likely he will seek concessions from the city's labor unions. At least five unions representing police and firefighters are seeking arbitration in collective bargaining with the city.

Detroit lacks, but is developing a "comprehensive labor strategy for managing" its relationships with its unions, according to Orr.

The emergency manager law gives Orr the authority to "reject, modify or terminate" collective bargaining agreements and concessions will be sought, he wrote in the report."
Bushwhacker

Kent, WA

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#4
May 13, 2013
 

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Bushwhacked.....

Who was president, when the American car industry needed bailing out, again ???
non-starter

Burnsville, MN

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#5
May 13, 2013
 

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Bushwhacker wrote:
Bushwhacked.....
Who was president, when the American car industry needed bailing out, again ???
Jimmy Carter. Lee Iacocca requested the bailout.
Consistent

Grantsburg, WI

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#6
May 13, 2013
 
Bushwhacker wrote:
Bushwhacked.....
Who was president, when the American car industry needed bailing out, again ???
Navane?

Risperdal?

Stelazine?
Bushwhacker

Kent, WA

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#9
May 13, 2013
 

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Chrysler equals the industry ?? Figures, non=smarter....
Consistent

Grantsburg, WI

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#10
May 13, 2013
 

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Need?

Want?

Crony Capitalism?

Buying of the Unions with Investor Dollars?

Bankruptcy Process is 150 years old(?), Circumvented for Political Gain by Plantation Massa's.

Need?, Fauching Iddddiots!
non-starter

Burnsville, MN

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#11
May 13, 2013
 

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Bushwhacker wrote:
Chrysler equals the industry ?? Figures, non=smarter....
GM and Chrysler equal the industry? Figures, Bushwhacker = Seattle Slewchebag.
Bushwhacker

Kent, WA

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#12
May 13, 2013
 

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At the Bush bailouts the entire industry was hurting, nice deflection, dumbass... 787 flying ???
Bushwhacker

Kent, WA

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#13
May 13, 2013
 

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non-smarter "reality" = less ...REALLY is more ??

Nice "investing strategy", no wonder you're always whining about $$$....
Bushwhacker

Kent, WA

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#14
May 13, 2013
 

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- America had it bad during the Great Bush Recession of 2008 and lingering months in the aftermath. But the Detroit metro area had it worse -- much worse.



Detroit's economy wasn't exactly in great standing before the housing bubble burst, before the automotive manufacturing that supports the community burst. It was already a case of haves, and have-nots. But when it all came crumbling down, with automakers slashing jobs and two filing for bankruptcy -- General Motors and Chrysler -- the shaky pedestal gave way.
non-starter

Burnsville, MN

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#15
May 13, 2013
 

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Bushwhacker wrote:
At the Bush bailouts the entire industry was hurting, nice deflection, dumbass... 787 flying ???
Deflection? Did Ford take a bailout disingenuos one?
non-starter

Burnsville, MN

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#16
May 13, 2013
 

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And Obama sold Chrysler to the Italians, so calling Chrysler an American car company is something of a stretch.
Bushwhacker

Kent, WA

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#17
May 13, 2013
 

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At the Bush bailouts the entire industry was hurting, nice deflection, dumbass... 787 flying ???

PS- Disingenuous, dummy ???
Bushwhacker

Kent, WA

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#18
May 13, 2013
 

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non-starter wrote:
<quoted text>Deflection? Did Ford take a bailout disingenuos one?

Ford Motor Co.(F), the only large U.S. automaker that didn’t receive a U.S. government bailout, would’ve failed along with General Motors Corp. and Chrysler LLC if President Barack Obama’s administration hadn’t rescued the industry, said Steven Rattner, who headed Obama’s auto task force.

“Ford would have closed because it wouldn’t have been able to get parts, because the parts industry in this country was in arguably worse shape than the assemblers,” Rattner said today at the Center for American Progress in Washington.
Bushwhacker

Kent, WA

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#19
May 13, 2013
 

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non-starter wrote:
And Obama sold Chrysler to the Italians, so calling Chrysler an American car company is something of a stretch.
Obama sold a car company ?? Yeah, and Boeing HAD to switch batteries, too right ???

Poor non-smart, you're such a child.

I see why you're broke...you're really dumb.
Bushwhacker

Kent, WA

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#20
May 13, 2013
 

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GOOG $880.oo.... Thanks for the "tip"....
non-starter

Burnsville, MN

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#21
May 13, 2013
 

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Bushwhacker wrote:
GOOG $880.oo.... Thanks for the "tip"....
More mythical stock investing prowess from the intellectually bankrupt person with little dog syndrome. Now make up something that makes you feel taller in addition to something that makes you feel wealthy.
non-starter

Burnsville, MN

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#22
May 13, 2013
 
But Orr reports that Detroit's net cash position was negative $162 million as of April 26 and that the projected budget deficit is expected to reach $386 million in less than two months.

He also warns that the city's financial health might change as more data is collected and analyzed.

"What is clear, however, is that continuing along the current path is an ill-advised and unacceptable course of action if the city is to be put on the path to a sustainable future."

Detroit is the largest city in the country under state control and the city's wallet is now Orr's to command. He dictates how Detroit spends its money, something that had been the responsibility of first-term Mayor Dave Bing and the nine-member City Council.

In a statement Monday morning, Bing said his office plans a "comprehensive evaluation" of the report over the next day.

"A comprehensive review of the emergency manager's financial and operating plan has yet to be conducted," Bing said. "However, my initial review is that the assessment by Mr. Orr of the city's financial condition is consistent with my administration's findings."

The city's problems preceded Bing, a former steel supply company owner and professional basketball Hall-of-Famer.

"This has been a moving target. The historical numbers that have been reported were unreliable," bankruptcy expert Doug Bernstein said. "Certainly, nobody was going to expect the numbers were to be better than were reported."

Orr described the city's operations as "dysfunctional and wasteful after years of budgetary restrictions, mismanagement, crippling operational practices and, in some cases, indifference or corruption."

"Outdated policies, work practices, procedures and systems must be improved consistent with best practices of 21st century government," he said in the report. "A well run city will promote cost savings and better customer service and will encourage private investment and a return of residents."

“The one and only Smart Liberal”

Since: Aug 12

Former MN Tax Payer

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#23
May 13, 2013
 

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I spend a lot of time in Detroit. Detroit is, has been, and always will be a dump.

Why?

Because it is run by corrupt Democrat politicians who are only interested in lining their own pockets and screwing the tax payers.

Kwame Kilpatrick - the jailed former Mayor of Detroit - would be re-elected Mayor tomorrow if you put his name on the ballot. Doesn't matter that he and his buddies ripped off the City for millions and millions of dollars.

Detroit is the poster child for two phrases: "dumb masses" and "low information voters".

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