No new news, city’s finances ‘insolvent’
DETROIT — Detroit Emergency Manager Kevin Orr issued his first report on the city’s financial emergency May 13. The report was issued after Orr’s first 45 days in office.
For many, Orr’s report did not reveal much new information on the city’s financial emergency. According to the report, city debt is about $15 billion. The city is spending more than it is taking in. It has a structural deficit with revenue falling every year, with the city taking loans to cover operating expenses.
The city has borrowed up to and more than $100 million every year for the last 10 years. According to Orr, the city is “insolvent” and has “exhausted its ability to borrow.”
The report also notes that Orr will work to balance providing city services with cutting costs and reducing long-term debt. The report states retiree benefits erode a third of the city’s operating budget.
According to the report, the EM is using the Consent Agreement, approved by City Council in 2012, as a roadmap. In the agreement, the report outlines changes that include a public lighting authority, modifications at the Detroit Department of Transportation and a transfer of Belle Isle. These changes have been highlighted as cost-saving measures for the city.
In Orr’s report, he says “an important part of the initial efforts” was to meet with community stakeholders, citizens, citizens groups and elected officials.
“The Emergency Manager has provided information about his goals and activities in various media interviews and public speaking engagements,” the report states.
Yet, his office has ignored several requests for interviews from this paper.
As a new city office, the EM hired a chief of staff and two new staff members.
Orr did note, in the report, that he is still evaluating the city’s assets. A more complete plan for the city of Detroit will be released in 60-90 days. It is not yet clear if the city will file for bankruptcy.