From Lansing

  • MiWeek this week

    Our DJC partners at Detroit Public Television have another Detroit-focused MiWeek program. With guest co-host Nancy Kaffer from the Detroit Free Press, the team talks about this week’s negotiations regarding the $350 million needed from the state to seal the grand bargain for Detroit’s bankruptcy. Also, they analyze the anger over the state’s policing of Belle Isle. If you missed the broadcast, we’ve got it online.

  • So what happened in Lansing? WDET asks Rick Pluta

    Emergency Manager Kevyn Orr is trying to persuade state lawmakers to approve Gov. Rick Snyder’s proposed $350 million to help shore up pension funding and protect the Detroit Institute of Arts collection from sale . Orr traveled to Lansing this week to meet with lawmakers and Governor Snyder. WDET’s Pat Batcheller asked Michigan Public Radio’s Rick Pluta whether Orr made any progress.

  • News from Lansing? Orr meeting with lawmakers today

    Seeking support for the state’s share of the “grand bargain,” Emergency Manager Kevyn Orr is in Lansing today meeting with lawmakers.

    For review:

    The “grand bargain” includes the $100 million pledged from the Detroit Institute of Arts and the $366 promised from foundations to shore up pension funding and protect the museum’s collection from sale to raise money to pay the city’s creditors in the bankruptcy case. The city’s plan to emerge from bankruptcy includes $350 million of state money as part of the bargain and requires pensioners to vote in favor of the plan as part of the bankruptcy court process.

    Since Gov. Rick Snyder proposed the $350 million state contribution earlier this year, the boards of the city’s pension systems have agreed to settlement terms with the city and the foundations have released their commitments. What remains is the state appropriation, and that’s what Orr is hoping to help secure this week.

    He’s in meetings throughout today and tomorrow with party-specific groups of legislators and the governor. If you’re looking for instant coverage, here are the Twitter handles for some of the reporters working up there today:

    @RickPluta, reporter/producer for the Michigan Public Radio Network

    @KathyGray, political reporter for the Detroit Free Press

    @ChadLivengood, capitol reporter for The Detroit News

    @ChrisGautz, capitol correspondent for Crain’s Detroit Business

     

     

  • The Monday Medley: A few new things about the city’s bankruptcy case

    Aggressive Opposition

    Calling Syncora “an obscure but combative insurance company,” the Detroit Free Press today takes a look at one of the bankruptcy’s biggest opponents, the Bermuda-based firm that insures hundreds of millions of dollars in bonds. Syncora has issued sweeping subpoenas seeking seeking centuries of records from the Detroit Institute of Arts and has caused city attorneys to describe the company’s legal tactics as employing a “scorched earth strategy.” Nathan Bomey writes:

    Syncora advisers say the company is being unfairly treated by Detroit and contends the city is moving hastily at the expense of creditors and residents. “What we’re doing is advocating for the highest and best reorganization and rehabilitation of the City of Detroit,” said Todd Snyder, a Rothschild financial adviser for Syncora, in an interview.

    Payment Plans?

    The city’s latest Disclosure Statement, filed Friday night, includes the $350 million Gov. Snyder proposed earlier this year to shore up pensions funds and protect Detroit Institute of Arts holdings from sale. The governor’s original proposal was for $17.5 million annual payments for 20 years, but that plan could be changing, The Detroit News reports today.

    Detroit’s latest debt-cutting plan spells out for the first time a mathematical method for the state to make a lump sum discounted payment of the present value of $350 million over 20 years, which three sources tell The News would be about $190 million — a 45 percent savings. The sources spoke on condition anonymity because of ongoing confidential negotiations.

    With tentative deals reached on pension payments, some pension fund financing debt and other creditor obligations in the city’s case, when will we see some official action in Lansing? After all, the pension deals require the $350 million from the state or bigger cuts befall the retirees, according to the city’s filings.

    Setting the (Handle)Bar High

    “With ever-increasing width and whimsy,” writes Neil Rubin in The Detroit News, Bill Nowling’s handlebar mustache is growing, both in appearance and reputation. Nowling, of course, is the spokesman for  Detroit Emergency Manager Kevyn Orr. By email, text or actual conversation, Nowling is the  answer guy for media with questions about what’s happening in the EM’s office.

    His mustache has been in development since late last year, and now it’s achieved its own 21st century-style fame: two Twitter accounts.

    Orr likes it, Nowling says, while Detroit Mayor Mike Duggan has stayed largely neutral. Others ask if he’s a Civil War re-enactor, and someone called him “Rollie Fingers.” He’d rather be known as the first than the last. Fingers was a Hall of Fame pitcher a generation ago who was best known for his spectacular handlebar mustache. Beyond that, he’s best known for going bankrupt.

     

  • Pensioners’ deal terms prevent lawsuits over EM law, constitutional pension protections

    Unions and retirees groups would agree to halt their existing — and not pursue future — litigation related to Michigan laws regarding emergency managers and public pensions protections under a deal reached this week in the Detroit bankruptcy case.

    The boards of both city retiree groups – the Detroit Police and Fire Retirement System and the General Retirement System – voted in favor of the negotiated deal. The agreement preserves pension payments to retirees far in excess of what Emergency Manager Kevyn Orr had been publicly proposing. It will go to a full vote by the roughly 32,000 pensioners as part of the bankruptcy proceedings, and their favorable vote is needed for the so-called “Grand Bargain.”

    The bargain provides for $366 million of foundation contributions, $100 million from the Detroit Institute of Arts and $350 million in state funds – as yet only a proposal with no vehicle for allocation — to go toward pension funding in order to protect the museum’s artwork from sale, among other terms.

    It’s the conditions tied to those “other terms” that were articulated for the first time in the city’s latest Plan of Adjustment, filed late Wednesday. Among them is a requirement for unions and retirement systems to halt all lawsuits challenging Public Act 436, the state’s law providing for emergency managers.

    Also in the new pensioner-city deal conditions tied to the state funds is an agreement to not sue the state over Article IX, Section 24 of the Michigan Constitution. That’s the provision that provides the state guarantee for public pensions. It is superseded by federal bankruptcy law in the city’s Chapter 9 case, the bankruptcy judge has said.

    “A critical part of any settlement is the elimination of potential lawsuits against Michigan taxpayers,” Ari Adler, spokesman for House Speaker Jase Bolger, said in a statement today after NextChapterDetroit.com first reported the terms. “The House of Representatives cannot contribute to any settlement until and unless there is an actual settlement to which to contribute.”

    The provision halting and preventing lawsuits has immediate implications but only for cases in which the unions or retirement systems are involved as parties. In February, the 6th Circuit Court of Appeals agreed to hear a challenge from the two retirement systems questioning whether Detroit was even eligible to file for bankruptcy. It includes references to both the emergency law and the pension provision in the state constitution.

    Also in February, a federal judge cleared the way for a challenge to Michigan’s emergency manager law made by 22 plaintiffs, including union leaders, ministers, Detroit school board members and city council members from Flint, Pontiac and Benton Harbor but not the unions themselves. The current law replaced a previous measure providing for the unelected managers that had been overturned by voters in November 2012. The next month the Legislature approved PA 436, which Gov. Rick Snyder signed.

    Opponents complain it unlawfully emasculates representative government and gives too much power to unelected appointees who report only to the governor.

    Ryan Plecha, an attorney who represents the Retired Police and Fire Fighters Association, says the litigation limits represent a balance between interests. “No pensions cuts and retaining 45 percent of COLA (cost-of-living allowances) was a pretty big incentive to do it,” he says. “This is not the final plan.

    Attorneys for the city of Detroit have said they will file a fourth version of the Plan of Adjustment and Disclosure Statement probably by April 25. Plecha says ongoing negotiations could revisit and amend the provisions limiting litigation.

    “That’s one of the things being discussed,” he says.

    Here is the text of the proposed agreement, as found in the latest Plan of Adjustment:

    The State’s payment of the State Contribution is conditioned upon, among other things, the following: … (e) active support of the Plan by, a release of and covenant not to sue the State from, and an agreement not to support in any way the litigation described in subsection (f) of this Section by, the City, the Retiree Committee, the Retirement Systems and certain unions and retiree associations, or equivalent assurances of litigation finality; (f) cessation of all litigation, including the cessation of funding of any litigation initiated by any other party, (i) challenging PA 436 or any actions taken pursuant to PA 436 as it relates to the City or (ii) to enforce Article IX, Section 24 of the Michigan Constitution, or equivalent assurances of finality of such litigation; …

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

     

     

  • On The Craig Fahle Show: Lansing and the Grand Bargain

    Governor Snyder and Republican leaders have said they would like the Legislature to agree to hundreds of millions of dollars in support of Detroit through bankruptcy, but what assurances will they need to give skeptical lawmakers in order to get the deal done in the next month? Craig talks with three Lansing-based reporters…