• Michigan Citizen and Kevyn Orr: Which history will be ultimately be written?

    The Michigan Citizen, one of Detroit’s African-American newspapers, has often had a lonely voice in its sustained criticism of the state’s emergency manager law and Kevyn Orr’s actions authorized by it. In the paper’s most provocative coverage of Orr’s first 12 months, the weekly publication reports on its staff sit-down interview with Orr, who visited the Citizen’s offices last week.

    The Citizen posed and Orr answered an array of questions, including some in ways the mainstream media haven’t or, frankly, wouldn’t: “Do you see yourself intervening in evictions or any of the suffering?” and “Some people can hear (your policies) as wanting a whiter, wealthier city. What do you think about that criticism?”

    Like it or not, those are the uncomfortable questions some Detroit residents and sympathetic observers have as they view the daily poverty, unemployment and disenfranchisement in most of the city. While downtown enjoys unprecedented investment and white hipsters are lauded in the local and national media, for example, where are the solutions for the unemployed, undereducated and poverty-stricken?, they ask. The Citizen is a voice that can steer the collective conversation about Detroit to include policy perspectives and proposals rooted social justice. In the paper’s ongoing coverage and now timely conversation with Orr, the Citizen hopes, in part, to broaden the framework by which the legacy of Michigan’s emergency manager system will be evaluated.

    To his credit, Orr, who has lived in the Miami and Washington D.C. areas, spoke to the Citizen of his ideal vision of Detroit: a widely diverse, safe urban area with balanced books and manageable debt. It’s his job as emergency manager, he says, to focus on the balance sheet and steer the city through a bankruptcy toward a sustainable, healthy financial future. In doing so, he’s proposing up to 80 percent cuts to banks and lenders to free up money for city services. The financial institutions predictably don’t like it:

    “They’re going to try to defeat this plan because their view is they’d rather take that money. And I’ve tried to restore it,” Orr says.

    The Citizen’s Shea Howell, drawing a vastly different conclusion, says this:

    This capacity, to think in a logic that excludes the consequences of your decisions on the lives of others, characterizes much of what we saw in Mr. Orr. This was most evident when he talked of pension cuts. Here he stressed, ‘There are only 20,000 pensioners in a city of 700,000.’ This is just a few people. A sacrifice for the many.

    This kind of numbers game is chilling.

    History will determine what the state law and Orr’s tenure will ultimately mean to the city … and if the Michigan Citizen was among the first to realize the consequences.

    -By WDET’s Sandra Svoboda

    @WDETSandra and nextchapter@wdet.org

    The Michigan Citizen, as part of New Michigan Media, is a member of the Detroit Journalism Cooperative along with WDET.

  • Detroit’s Plan of Adjustment: Breaking it down for pensioners

    What’s on Carole Neville’s mind about Detroit’s Plan of Adjustment?

    Plenty, says the attorney who is representing the official retirees’ committee in Detroit’s bankruptcy case.  She’s heard the city’s side in court, in the media and in other discussions, and she’s got her own points to make publicly on behalf of the retirees.

    Carole Neville

    Attorney Carole Neville

    She and Ryan Plecha, another lawyer for retirees, will be guests on The Craig Fahle Show between 9 and 11 a.m. Thursday. Tune it to 101.9 FM or online to hear them. They’ll also share some of the objections the pensioners are raising in their written objections to the bankruptcy judge.


    Attorney Ryan Plecha

    Next Chapter Detroit spoke with Plecha the day the Plan of Adjustment was released, which was the same morning the 6th Circuit Court of Appeals agreed to hear the pensioners’ challenge to the city’s eligibility for bankruptcy. Listen to that interview here.

    Neville also gave us a preview of some of her thoughts about the Detroit situation.

    Here are a few:

    * “They’re neglecting the health care completely,” she says of the media and the city representatives. “Basically the city paid about $160 million a year for health care for its retirees, and then cut that during the Chapter 9 to $30 million a year, and it’s planning future cuts under the plan. There really is not going to be a significant health care program for retirees post-plan.”

    So that means as pensioners’ checks shrink, they’ll also need to pick up a greater share of their health care costs. But just how much, no one knows.

    “Right now there’s very little in the plan to be able to describe what the health care benefits in the future will look like. It’s four or five sentences,” she says. “It hasn’t been negotiated at all.”

    Some of the retirees, including police and fire, are not eligible for Medicare.

    “Some of them are really going to be hit terribly,” Neville says.  For the pensioners who are: “Medicare is not adequate to cover all the costs of health care, and people have to buy supplementals and that is an out-of-pocket cost that the city is not willing to pick up.”

    Not willing or can’t?

    “Can’t is a relative word,” Neville says. “It’s a question of priorities.”

    The citys’ current plan cuts annual increases to pension payments that were similar to cost-of-living adjustments but not tied directly to inflation or another indicator, Neville says.

    “For younger retirees, that loss is huge,” she says. “And it’s not being mentioned in any of the discussions.”

    How attorneys are going to explain to the pensioners what they’re voting on when all 176,000 creditors receive the informational packets and ballots. “You have to drop a lot of the bankruptcy code references. As if people are going to understand what that means?” she says. “All of those things are going to need to be explained in plain English.”

    Neville and her team are working to determine what each pensioner is facing under the city’s proposed Plan of Adjustment, which is still partially based on the “grand bargain.” That’s the yet-to-be-finalized deal that brings in $350 million of state money, $100 million from the Detroit Institute of Arts and $365 million from the foundation community. The funds would be allow the city to retain the DIA collection instead of selling it to fund pension payments.

    “Our intention is to calculate what people’s pensions are now, what their pension is likely to be in the future if the DIA money comes in and if there’s no excess allocation. We’re going to give them the numbers,” Neville says.

    The seriousness of the “swaps agreement” announced last week that if approved by the bankruptcy judge, would allow a “cramdown” of the city’s plan to all other creditors including pensioners.

    The deal between the city and two investment banks drops the city’s obligation on interest rate swaps debt from $288 million to $85 million, according to court filings. Judge Steven Rhodes has rejected two previous agreements of $230 million and $165 million as too generous to the lenders, UBS AG and Merrill Lynch.

    But if this deal is approved, that means the city has one class of creditors agreeing to its plan, which allows the plan to be “forced through” instead of being agreed upon by all groups of creditors, including pensioners.

    Neville, who has represented creditors’ committees in dozens of bankruptcy cases, called the swaps deal “one of the most outrageous things” she’s ever seen.

    Tweet us your questions for her using #DetNext.

  • The Voting Plan: Here’s the judge’s order

    After two court hearings in the last week, Bankruptcy Judge Steven Rhodes issued his order establishing the procedure for “solicitation and tabulation of voting” on the city’s Plan of Adjustment by its some 176,000 creditors including pensioners.

    The deadline for determining which creditors are eligible to vote is April 14. Each eligible creditor will receive a solicitation package, to be sent no later than April 28. That package will include a copy of the Confirmation Hearing Notice, a CD-ROM containing the Plan of Adjustment, the Disclosure Statement and all exhibits, a ballot with return envelope and other relevant materials.

    The voting deadline is June 30, with the bankruptcy trial scheduled to begin July 16.

    The city has a contract with Kurtzman Carson Consultants, which will handle the mailings, tabulations and other administrative duties. Hired in July 2013, KCC had been paid $608,163 as of March 6, according to Bill Nowling, spokesman for Emergency Manager Kevyn Orr.

    Here’s Rhodes’s order:

    3.11.14 Voting Plan

    By in Bankruptcy Court, WDET
  • Today in Court: Deal announced to insure retirees’ attorneys

    Attorneys representing the city and the Official Committee of Retirees told Bankruptcy Judge Steven Rhodes today that they have reached an agreement about payment of an insurance policy for the committee’s attorneys. The policy will protect the lawyers from lawsuits resulting from their handling of the bankruptcy case.

    Terms of the agreement were not disclosed during the short hearing, but a court filing from last month stated the policy would cost $602,250 with $250,000 to be held in escrow and refundable. “The Committee Members are concerned with their exposure to frivolous litigation and believe that procuring the Insurance Policy will ensure that the Committee remains functional and balanced,” attorneys for the committee wrote in a motion seeking payment from the city for the policy.

    Rhodes last week was critical of the $602,250 request.

    Attorneys today did not reveal terms of the agreement, but said a motion seeking Rhodes’s approval would be filed this week.


    2.7.2014 Retiree Committee Expense Claim

  • WDET’s Detroit Agenda: Crime and faith in a bankrupt city

    Detroit Journalism Cooperative partner WDET is examining the concerns of Detroiters over the next few months in a series we call the Detroit Agenda. It’s a series that brings forward the voices of the residents as they experience daily life in the city that’s currently going through the largest municipal bankruptcy in history.

    While lawyers, the emergency manager and the city’s elected leaders work out the long-term deficit elimination plan and the financial restructuring, one of the biggest concerns facing city residents is crime. But beyond the statistics and the headlines, there’s the aftermath of crime. As WDET’s J. Carlisle Larsen reports many Detroiters look to the religious community for solace.

    “The oldest theological question is: Why do bad things happen to good people? It’s the question in the oldest book of the Bible, it is the theme that runs through all of scripture and for the most part through all of our life,”

    Rev. Dr. Kevin Turman, Photo courtesy of Second Baptist Church

    Rev. Dr. Kevin Turman, Photo courtesy of Second Baptist Church

    That’s from Kevin Turman who has been the Senior Pastor of Second Baptist Church in downtown Detroit for more than 25 years. During his tenure at the church, many of his members have been the victims of crime. He says in some cases criminals have waited for congregants to go to church before robbing their homes. Turman says his church has also seen brutal violent crime. One incident he describes involved the murder of a teenage girl.

    “When she went to the friend’s house the two of them went to another home. And in the midst of their being at that home, apparently elsewhere in the home drugs were being both bought and sold and someone thinking money was inside came in robbed the home. Shots were fired the girl ran and she was subsequently—as she was running—shot and killed. Well the people who were in her Sunday school class, the people who were in the choir with her, the people who saw her around the church…felt that this was as tragic a circumstance as had been visited upon them.”

    Turman says he mourned the loss of the girl along with the congregation in order to begin the community’s healing process. Hephoto says one of the church’s roles is to help parishioners to avoid becoming cynical when crime happens.

    “It’s very easy to become suspicious of others, hateful, and it is the role of the minister and the role of ministry to help people understand that there has always been evil in the world and that doesn’t make the world a bad place. It makes it a place where the struggle to be good and loving and kind is indeed a struggle. But it’s a struggle we need to continue to engage in.”

    Pastor Spencer Ellis, Photo courtesy of Citadel of Praise Church

    Pastor Spencer Ellis, Photo courtesy of Citadel of Praise Church

    On the far west side of Detroit another church has had to tackle the issue of violent crime. Spencer Ellis is the Senior Pastor and Founder of Citadel of Praise in the Brightmoor neighborhood. He says his church had a member who was a single mother of two. She was raped and murdered. Ellis says providing counseling to church members in the aftermath of violent crime is difficult. He says members may not feel emotional relief for a long time.

    “I wish I could give the ‘Take two pills and call me in the morning’ type, or I wish I could just give you the steps—‘Here’s the steps, and tomorrow is going to be okay’—and when you can’t provide that—I mean because the counseling we provide here is spiritual and we have to depend on a God that we don’t see but that we believe in to help us get through it. And it’s a faith walk.”

    But spiritual guidance isn’t the only comfort that churches can provide. Terri Laws, religion professor at University of Detroit-Mercy, says in times of crises, churches historically have stepped in to provide material help to mourning families.

    Terri Laws, photo courtesy University of Detroit-Mercy

    Terri Laws, photo courtesy University of Detroit-Mercy

    “There are families in those communities who were not anticipating a young man—or a young woman—to be murdered, for example. And that they don’t have the funds to have—they literally do not have the funds—to hold a service at a funeral home. Someone then—a pastor in a community then—chooses to open their doors, use their light, their heat, their church choir, in order to provide a home going service for that young person.”

    Ellis echoes this sentiment. When the single mother from his church was killed, Citadel of Praise paid for the funeral. Laws says funerals and sermons can provide a collective catharsis for parishioners.

    “So, in that immediate moment when compassion is certainly needed for the family there are always other people in the congregation who are very aware that it could be their son, or it could be their daughter and they’re identifying with the horror of losing a child, or with the horror of losing a child particularly to violence.”

    Turman says at Second Baptist Church he works to find the balance between the tragedy and hope. He says when he preaches, he chooses to focus on the positive, even when it is difficult.

    “I don’t preach about violence. I don’t preach about death. I don’t preach about hate. I preach about love. I preach about peace. I preach about hope. And I acknowledge though that it’s hard to find hope in some of these situations.”

    Turman says he doesn’t have all of the answers to why bad things happen to good people. But he says faith helps.

    –J. Carlisle Larsen, WDET, a member of the Detroit Journalism Cooperative

  • Trial Delayed: Judge moves Detroit case to July date

    After hearing from attorneys objecting to the first scheduled Detroit bankruptcy case timeline as too compressed, Judge Steven Rhodes extended the deadlines for filings and objections in the case. The hearing for the city’s Plan of Adjustment is to start July 16 with additional dates available into August.

    Here’s the Amended Scheduling Plan Judge Rhodes issued. 

    The deadline for voting on the plan is June 30. About 173,000 parties are eligible to vote on the plan in dozens of creditor categories including pensioners and bondholders.

    The city filed its proposed Plan of Adjustment and Disclosure Statement Feb. 21. Attorneys have said they will amend it. Meanwhile, negotiations and mediation sessions continue between the city and various creditors.