Orr to meet with creditors and debt-holders
By Corey Williams
Associated Press
DETROIT (AP) — Cash-strapped and fiscally troubled Detroit has about a 50-50 chance to avoid bankruptcy, according to state-appointed emergency manager Kevyn Orr.
Orr laid out his plans to Detroit residents Monday evening at Wayne State University’s Law School. The public informational meeting was required under Michigan’s Local Financial Stability and Choice Act.
Orr, a Washington-based bankruptcy attorney, told about 250 people inside the law school auditorium — as he has said since his March 25 hiring — that he wants to steer Detroit clear of a Chapter 9 municipal bankruptcy. He is scheduled to meet Friday with dozens of creditors and debt-holders, including banks and unions.
He hopes to work out deals and reach concessions to cut deeply into Detroit’s more than $14 billion in long-term debt.
At times Monday, Orr challenged and even implored residents to be part of the solution as he tries to right Detroit.
“You can call me bad names, but I need your help,” he said. “This is not going to be easy. It’s going to be hard, but we can do it.”
Orr was selected earlier this year by Gov. Rick Snyder to fix Detroit after a review team determined the city was in a financial emergency with no satisfactory plan to solve it. A state loan board made it official, hiring Orr and giving him 18 months on the job.
“I think that we need to try to be supportive and positive and find out what we can do, collectively,” said 58-year-old Debbie Squires, a Detroit property owner who moved out of the city 13 years ago because of rampant crime. “I think we should form some type of coalition to try to get behind him and help him. He didn’t create this.”
As another 100 or so people demonstrated outside the building, Orr gave those able to squeeze into the auditorium a brief overview of his 45-day report submitted last month to Snyder.
The charts, graphs and summaries showed a city struggling with a falling population and declining revenues, yet burdened by steep debt partially incurred through borrowing by past city administrations.
The city’s budget deficit could reach $380 million by July 1.
General fund debt interest in 2013 is $140 million, according to the overview. Limited-tax general obligation debt service is nearly $70 million. Unlimited-tax general obligation debt service is at $70 million.
Orr also said the city has $600 million in unfunded pension liabilities.
“From at least December 2011, the city has known it’s on a trajectory that’s not sustainable,” Orr said.
After being questioned by someone in the audience about a proposed lease of Belle Isle, Orr said he will resurrect the issue and pursue turning operations of the popular island park over to the state.
It costs the city about $6 million each year to operate and maintain the 985-acre park in the Detroit River.
Mayor Dave Bing and Snyder appeared to have a lease deal worked out months ago. The Detroit City Council failed to vote on it, and Snyder withdrew the offer.
