Among Emergency Manager Kevyn Orr’s talking points on the city’s Plan of Adjustment and Disclosure Statement, filed Feb. 21, are a few messages about the future of the Detroit Water and Sewerage Department:
*A proposed regional authority would be called the Great Lakes Water and Sewer Authority;
*Discussions have taken place for decades about regionalizing the water system;
*City and suburban leaders met Tuesday, Feb. 18 and made progress in their talks, which are continuing.
Which leads to the reasonable conclusion that Orr can’t be too happy about an article in today’s Macomb Daily based on a two-week-old memo leaked to a reporter. “Portions of the detailed, 11-page memo indicate that Oakland and Macomb leaders fear that they are being scammed,” Chad Selweski writes. (Incidentally, he doesn’t post the memo.)
The article trots out the predictable, nearly sensationalized suburban suspicions that seem to surround many things Detroit. In this case, they’re focused on the negotiations and proposals for what to do about DWSD. Have negotiations been perfect? Of course not. Environmental groups, for example, have called for more transparency and openness, and suburban leaders should be diligent about understanding a regional deal.
But Selweski quotes Macomb County Commissioner Jim Carabelli, a Shelby Township Republican, as saying “I’m a little appalled with the deal that’s on the table. It’s such a bad deal … (this) is some scary stuff.”
Scary? Yes, the bankruptcy is scary. The pensioners facing a 30 percent cut to their retirement payments would likely agree.
The memo, according to the Macomb Daily, reads, in part, “The DWSD … needs continuing, widespread reform – in financing, in operation and maintenance, in purchasing, in capital improvement, in technology, in personnel and labor optimization, and in service delivery.”
How about suburban leaders offer some constructive options for those goals instead of quips that rely on anti-Detroit sentiment?
-By WDET’s Sandra Svoboda
@WDETSandra and firstname.lastname@example.org
Bankruptcy Judge Steven Rhodes today issued a list of dates for hearings and deadlines related to the Detroit Bankruptcy and the city’s Plan of Adjustment.
Friday, Feb. 28: Deadline for Objections or Comments Regarding the Timeline
Friday, March 14: Deadline to request that the city include additional information in the Disclosure Statement
Friday, March 28: Deadline to file objections to the Plan of Adjustment or Disclosure Statement and to serve written discovery requests regarding the plan’s confirmation
Friday, April 4: Deadline for the City to file a response to objections to the Disclosure Statement
Wednesday, April 9: Deadline for attorneys with objections to “meet and confer” with City representatives
Friday, April 11: Deadline for City to file its combined response to objections to the plan
Monday, April 14: 9 a.m. hearing on unresolved objections to the Disclosure Statement and initial status conference on plan confirmation
Friday, April 18: Deadline to comply with written discovery requests
Monday April 28: 9 a.m. arguments on objections to the Plan of Adjustment that raise legal issues
Friday, May 9: Deadline to complete non-expert depositions and to designate expert witnesses and submit expert reports
Friday, May 23: Deadline to counter-designate experts and submit reports
Friday, June 6: Deadline to complete expert depositions
Tuesday, June 10: Deadline to submit pretrial briefs and proposed pretrial order
Wednesday, June 11: 9 a.m. Final pretrial conference on confirmation of the Plan of Adjustment
Monday, June 16: 9 a.m. Trial on confirmation of the Plan of Adjustment
The Detroit Free Press’s personal finance columnist, Susan Tompor, profiles several Detroit retirees and what the Plan of Adjustment’s proposed cuts to their pension payments mean to them. Firefighters. Landscape architects. Librarians. How much are their pension payments, and how will the cuts change their lives?
Now when the stress of the job should be long gone, about 24,000 city retirees are taking on a new kind of stress as they’re forced to deal with personal budget cuts. In Detroit, the average general system retiree’s benefit is less than $20,000 a year. For police and fire retirees, it’s about $34,000.
Emergency Manager Kevyn Orr’s initial proposal includes cuts of up to 10 percent for retired police and fire fighters, while retirees from other city departments would lose up to 34 percent. Tompor explains in detail what that means to several retirees, their families and their lives.
From pensioners and poverty to municipal bond markets and the mighty backlash, national and local media offered up some thought-provoking reading over the weekend after Detroit filed its Plan of Adjustment and Disclosure Statement Feb. 21.
Here are five readings we thought worth sharing:
Detroit residents who work outside the city limits could find themselves paying income tax they owe to the city under a measure Emergency Manager Kevyn Orr slipped into Friday’s filings. The Detroit News reports on what it would take at the state level to collect the estimated $140 million that’s missing from the city’s coffers.
Religion and Ethics Newsweekly weighed in focusing on the effects on pensioners and the role the religious community has (hasn’t?) played in the bankruptcy’s aftermath. “Detroit is a city where people desperately need hope.”
Bloomberg reported “The filing opens a new, potentially more contentious phase of the biggest U.S. municipal bankruptcy” in its article examining how the Plan of Adjustment relies on creditor settlements.
CNBC focused on bond insurers and the backlash to the Plan of Adjustment, finding “investors directly in the line of fire made clear Friday they were braced for a legal battle.”
The New York Times looked to post-Katrina New Orleans for lessons Detroit could learn from, writing “The scale of the two cities and the nature of their calamities differ, but Detroit can learn from New Orleans, where a fix that appeared rational to some experts and civic leaders was thrown aside for a way forward that has been slower and messier but politically more palatable and, many here believe, fairer.”
The Plan of Adjustment came out on Friday and you can read all about it here, at our live blog. What did the day after look like? Well, life continued. We’re still here. We’re all still here.
Detroit Emergency Manager Kevyn Orr’s office has released a statement about the city’s Plan of Adjustment and Disclosure Statement filed today in U.S. Bankruptcy Court.
Here’s what the city considers the highlights of the plan:
* Devotes $1.5 billion over 10 years to capital improvements, blight removal and equipment and technology upgrades.
* During the next five years, up to $500 million of the $1.5 billion will go toward blight removal.
* Proposes 20 percent payment to unsecured, non-retiree creditors in the form of new securities from the city and a pledge to increase that if the city’s finances improve.
* Assumes $465 million from third-party donors and the Detroit Institute of Arts toward the pension funds over two decades, subject to city and pension fund agreement and conditions.
* Includes Gov. Rick Snyder’s proposal to send $350 million of state money to Detroit over 20 years.
* Allows that if police and fire pensioners agree to the plan and there is some settlement with the state, they could receive more than 90 percent of their pensions with the elimination of cost-of-living allowances. General retirees cold receive in excess of 70 percent of their pensions after elimination of cost of living allowances.
* Moves current city employees into defined benefit plans.
In other development, mediations continue toward agreements with key creditors in the process overseen by Chief U.S. District Judge Gerald Rosen. Talks are ongoing for the interest-rate, pension debt swaps agreement as well as the future of the Detroit Water and Sewerage Department.
A Wayne State University Law School audience was privy to a few insights about Detroit Mayor Mike Duggan’s administration from the city’s corporation counsel, Melvin “Butch” Hollowell.
• Mayor Mike Duggan’s cabinet meetings are Wednesdays, and everyone there is evaluated each week. A White House representative is at the table.
• The mayor and his staff have “great relations” with the new Detroit City Council as well as the emergency manager’s key staff.
• The memo of understanding between Duggan and Emergency Manager Kevyn Orr “isn’t perfect, but it was a pretty good deal.” (The city’s police chief and top financial officer report to Orr, but Duggan oversees the rest of the city’s departments.)
• In response to a question about the quasi-public groups involvement in the city, Hollowell said the mayor “is going to take control and has taken control of the economic development for the city. Tom Lewand is on his staff for that reason.” (Lewand is the group executive, jobs and economic growth.) “It’s not like we’re going to have rouge economic development around the city. It ain’t happening,” Hollowell said.
Appearing at the school’s “Good Governance Lecture Series” with Portia Roberson, group executive of human rights and ethics at the city, Hollowell offered frank, if overwhelmingly positive, answers to questions about the current city operations and how the new mayor is working with the emergency manager.
“We don’t agree on everything,” Hollowell said. “We don’t want to be where we are just butting heads on everything because we’ve got work to do. From the very beginning we’ve tried to structure a cooperative relationship with the emergency manager.”
Hollowell was assistant Wayne County executive from 1985 to 1991, overlapping tenure in that office with Duggan, who was deputy executive from 1987 to 2000. Hollowell also served as general counsel for the Detroit branch of the NAACP and worked for Duggan’s campaign as chief legal counsel before being named to the city administration.
He predicted a busy year with many challenges, including the planned three-year budget that will be part of the bankruptcy restructuring process.
“It’s intense on the 11th floor,” he told the friendly audience. “Make no mistake about it, it is not for the fainthearted.”
-By WDET’s Sandra Svoboda
@WDETSandra and email@example.com