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(NBC News)   Detroit's emergency financial manager says that the city is insolvent. Which means it's actually in a lot better financial shape than anyone thought   (nbcnews.com) divider line 32
    More: Fail, Detroit, insolvent, executive directors, cost reduction, recess, emergency managers  
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895 clicks; posted to Business » on 15 May 2013 at 9:04 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-05-15 09:20:33 AM  
In other news, Detroit has an emergency financial manager.
 
2013-05-15 09:26:37 AM  
encrypted-tbn0.gstatic.com
 
2013-05-15 09:37:30 AM  

Englebert Slaptyback: In other news, Detroit has an emergency financial manager.


And what's their salary cost to say "We spend more than we take in"?
 
2013-05-15 09:45:32 AM  

FunkyBlue: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.

And what's their salary cost to say "We spend more than we take in"?


"We can't provide services and infrastructure because we have no tax base and can't attract a tax base due to horrible infrastructure and lack of services."

/Pay me my money
 
2013-05-15 09:50:40 AM  

Englebert Slaptyback: In other news, Detroit has an emergency financial manager.


Yup. Detroit does need some of the things that an emergency manager can do, but it's a thorny issue.  No one is really even sure if the managers are constitutional, and there have been something like 6 other Michigan cities that have had managers, and all of them have left those cities in far worse shape than when they started. I'm not optimistic. Neither the city council nor the governor has the answers or I think are really capable of truly finding solutions. They're just playing politics most of the time.

At the moment, there is one simple, seemingly unsolvable problem: There is simply no tax base. Business and industry crashed, crime went up, people left. No one will invest in the 'Baghdad of America' because there's no worker/consumer base here, and no one will move here because there's no business and industry. Both people and businesses are also scared off by the horror stories and stereotype that have grown up around the city. Even raising taxes (which hasn't REALLY been considered and probably needs to be) wouldn't help much, because the tax base is so small for the city's size. It's a vacuum and a total standoff, with people and business each waiting for the other to DO SOMETHING before they act themselves. Add in corrupt city government, predatory Republican lawmakers in Lansing, and a REALLY uneducated voter population, and you have a Gordian Knot of a problem.

It's not all bad, though. There are several business interests that have taken advantage of the low pricing to buy up lots of things downtown and move companies down there. The downtown area is clean, safe, well-policed, and has not a single vacant building. There are businesses everywhere, and housing is being added slowly to the Midtown area. Young professionals (often after graduating from Wayne State in midtown or other MI universities) are starting to move down there. The rot spread from the center outwards during 'white flight' decades ago, but the center of the city has been reborn, before the rot even made it to the edge of the city. That middle ring is where the city is at it's worst.

This gradual redevelopment by brave businesses is probably the only solution in the long run. This is why I get so pissed off when the stupid motherless cum dumpsters who've never been within a thousand miles of this city descend on these threads with their tired jokes about Robocop and Kentucky Fried Movie. The constant jokes and insults have created a impenetrable, nation and even WORLD-wide negative impression of the place. Detroit is almost a byword for 'murder capital of the world' despite the fact that Detroit has never ever been #1 in even the US in crime and violence. If I even tell someone I'm from Detroit, the first thing they ask me about is murders, getting mugged, dodging bullets in the streets, etc. So many people (and businesses) I know as friends would never even for a moment consider even VISITING Detroit, with the same 'well duh' as if you just suggested heading over to Somalia for a beer.
 
2013-05-15 09:54:30 AM  

Pariah.: The constant jokes and insults have created a impenetrable, nation and even WORLD-wide negative impression of the place.


It's not the jokes and insults that did that.
 
2013-05-15 09:56:47 AM  
Haha, it's so funny when democratically elected officials are thrown out of office and replaced by unelected appointees who have no connection or responsibility towards the peoples whose lives they are now in complete control of.
 
2013-05-15 10:01:56 AM  

Pariah.: and there have been something like 6 other Michigan cities that have had managers, and all of them have left those cities in far worse shape than when they started.


That is simply untrue.  Pontiac is much better off than before the emergency manager.  They've had multiple basic services restored.  (Although comparing Detroit to Pontiac is unfair, since Pontiac had assets to salvage)
 
2013-05-15 10:14:21 AM  

Lost Thought 00: Haha, it's so funny when democratically elected officials are thrown out of office and replaced by unelected appointees who have no connection or responsibility towards the peoples whose lives they are now in complete control of.


I'm fine with Detroit not having an emergency manager, however the day do that, all support from the state ends.  No more money from Lansing, no more help underwriting bonds, etc.  The internal politics of Detroit have been a clusterfark that the rest of the state has been underwriting for years.  Corruption, multiple officials in jail due to FBI investigations, "SHREK!", etc.  Bing actually presented a plan to shrink the city that was written by the Detroit Mayor's office and the council wouldn't even debate it because they're a bunch of corrupt farkers who feared even the smallest of impact to their little fiefdoms.  Had Detroit implemented some version of Bing's plan, I'd be against Detroit having a manager, but the way the city council just shot it down with no debate, fark 'em.  They had their chance to take ownership of the process and do what everyone knows needs to be done and they didn't want to enact reforms while shrinking the service footprint, so now it is time for the state to do it.

Personally I hope that Orr will basically be Bing's 500 pound gorilla and just use his authority to enact Bing's plan, but at the end of day something needs to be done.  Detroit being shiatty drags down all of SE Michigan.  If the good people of Detroit don't like Orr, then they can vote for the guy who promises to remove him next time we elect a governor.
 
2013-05-15 10:20:03 AM  
Detroit has some options available to help - some of which have been discussed in the past:

Lease Belle Isle to the state - turning a money pit into an income item for the city.  Yes, the deal was on the table back in January which the city council was heavily set against.  The city council, dare I suggest it, has never had the best interest of the city in mind in their day to day business (I am looking squarely at you Joann Watson).

Reduce the geographical size of the city - break some neighborhoods into their own little villages/towns.  The land area of the city is simply way to big for the population that lives there.  For example, there are multiple locations where there may be 1-2 occupied houses within a multiple city block area.  There are also many areas where there are block after block of no occupied buildings at all.

Sell City Airport or otherwise close it.  How many flights does this field see in a typical day?  5?  10?  If the people using the airport want it to stay around, they would be welcomed to bid for it.  The city can no longer afford to be in the aviation business.

Severely reduce city council staff/perks.  No more city provided car/driver.  No more 4 staffers per council member.   Maybe even reduce the council to part-time.

Unless expected to respond to critical city events (e.g. water main breaks, major fire, etc...) day and night, no city staffer should have a take-home vehicle provided by the city.  Let the staffers use their own personal vehicle and if necessary, give them mileage reimbursement.  If the city must provide a vehicle, it will be something inexpensive and economical like a Ford Focus (no more Escelades).

$.02
 
2013-05-15 10:23:19 AM  

EatHam: Pariah.: The constant jokes and insults have created a impenetrable, nation and even WORLD-wide negative impression of the place.

It's not the jokes and insults that did that.


None of Detroits problems were CREATED by them, but ALL of Detroit's problems are EXACERBATED by them. Stereotypes often have truth to them, but the jokes went a LONG way towards cementing Detroit's global reputation as a perpetual war zone.
 
2013-05-15 10:26:30 AM  
Fifty years of liberals and unions in charge will get this.
 
2013-05-15 10:28:11 AM  

Pariah.: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.

Yup. Detroit does need some of the things that an emergency manager can do, but it's a thorny issue.  No one is really even sure if the managers are constitutional, and there have been something like 6 other Michigan cities that have had managers, and all of them have left those cities in far worse shape than when they started. I'm not optimistic. Neither the city council nor the governor has the answers or I think are really capable of truly finding solutions. They're just playing politics most of the time.

At the moment, there is one simple, seemingly unsolvable problem: There is simply no tax base. Business and industry crashed, crime went up, people left. No one will invest in the 'Baghdad of America' because there's no worker/consumer base here, and no one will move here because there's no business and industry. Both people and businesses are also scared off by the horror stories and stereotype that have grown up around the city. Even raising taxes (which hasn't REALLY been considered and probably needs to be) wouldn't help much, because the tax base is so small for the city's size. It's a vacuum and a total standoff, with people and business each waiting for the other to DO SOMETHING before they act themselves. Add in corrupt city government, predatory Republican lawmakers in Lansing, and a REALLY uneducated voter population, and you have a Gordian Knot of a problem.

It's not all bad, though. There are several business interests that have taken advantage of the low pricing to buy up lots of things downtown and move companies down there. The downtown area is clean, safe, well-policed, and has not a single vacant building. There are businesses everywhere, and housing is being added slowly to the Midtown area. Young professionals (often after graduating from Wayne State in midtown or other MI universities) are starting to move down there. The rot spread from the center outwards du ...


How does the emergency manager thing work vs. elected officials?  Constitutionally.

In a Democracy the power of the government comes from the people.  Since that individual was not elected or held in referendum, how can they alter existing agreements that were put in place between workers and the state?

Practically speaking, in other MI towns, how have the managers left?  Is there an election after they do what they do?  Is there just a time line for them to 'clean house' and then they are out?  What prevents the leaders who come in from renouncing the managers decisions/agreements?
 
2013-05-15 10:32:26 AM  

EatHam: Pariah.: The constant jokes and insults have created a impenetrable, nation and even WORLD-wide negative impression of the place.

It's not the jokes and insults that did that.


The Cleveland Tourism Board did that, right?
 
2013-05-15 10:33:40 AM  

NostroZ: Pariah.: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.

Yup. Detroit does need some of the things that an emergency manager can do, but it's a thorny issue.  No one is really even sure if the managers are constitutional, and there have been something like 6 other Michigan cities that have had managers, and all of them have left those cities in far worse shape than when they started. I'm not optimistic. Neither the city council nor the governor has the answers or I think are really capable of truly finding solutions. They're just playing politics most of the time.

At the moment, there is one simple, seemingly unsolvable problem: There is simply no tax base. Business and industry crashed, crime went up, people left. No one will invest in the 'Baghdad of America' because there's no worker/consumer base here, and no one will move here because there's no business and industry. Both people and businesses are also scared off by the horror stories and stereotype that have grown up around the city. Even raising taxes (which hasn't REALLY been considered and probably needs to be) wouldn't help much, because the tax base is so small for the city's size. It's a vacuum and a total standoff, with people and business each waiting for the other to DO SOMETHING before they act themselves. Add in corrupt city government, predatory Republican lawmakers in Lansing, and a REALLY uneducated voter population, and you have a Gordian Knot of a problem.

It's not all bad, though. There are several business interests that have taken advantage of the low pricing to buy up lots of things downtown and move companies down there. The downtown area is clean, safe, well-policed, and has not a single vacant building. There are businesses everywhere, and housing is being added slowly to the Midtown area. Young professionals (often after graduating from Wayne State in midtown or other MI universities) are starting to move down there. The rot spread from the center ou ...



The idea - as I understand it - is that the state could be held financially liable for a city/governing unit being run into the ground.  Thus the state, needing to protect the assets and resources of the state, is empowered to deal with wayward local units.

I could be wrong here, but that it the justification I have heard before WRT emergency financial managers.
 
2013-05-15 10:33:41 AM  

NostroZ: Practically speaking, in other MI towns, how have the managers left?  Is there an election after they do what they do?  Is there just a time line for them to 'clean house' and then they are out?  What prevents the leaders who come in from renouncing the managers decisions/agreements?


The state legislature passed a law allowing the governor to appoint a manager over any city whose finances met a certain criteria.  The powers of the manager are limited by that law.  I'd imagine the moment the manager leaves the actions of the manager can be renounced, but if that tanks the city's books again, they'll just find themselves with another manager.  As for if the current leadership refuses to play ball with the manager, I'd imagine the state troopers would go in to arrest the leadership for breaking the law.
 
2013-05-15 10:44:55 AM  

NostroZ: Since that individual was not elected or held in referendum, how can they alter existing agreements that were put in place between workers and the state?


It's that or the contracts get negated because the city doesn't have any money.  Liberals assume that the money train never stops.  It has stopped for Detroit.

At this point Detroit can suck it up and let the state rearrange their finances with the hope that state backing will garner them something, or they can go bankrupt and invalidate the contracts altogether.  Only one way has a hope of getting compensation to the workers.  Bankruptcy will leave them with what the Hostess workers got - diddly dick.
 
2013-05-15 10:45:38 AM  

plc5_250: Detroit has some options available to help - some of which have been discussed in the past:

.
.
.

$.02


Cantonite here agreeing 100%.  Let me know when you run and I'll vote for you. Actually, scratch that. Let me know when the rest of Wayne County gets a vote and I'll vote for you.
 
2013-05-15 10:48:52 AM  

Kaiser Chieftess: plc5_250: Detroit has some options available to help - some of which have been discussed in the past:

.
.
.

$.02

Cantonite here agreeing 100%.  Let me know when you run and I'll vote for you. Actually, scratch that. Let me know when the rest of Wayne County gets a vote and I'll vote for you.



I am in Westland so I can't run.  Doesn't mean I am not affected by the idiocy that is Detroit City Council though!
 
2013-05-15 11:15:10 AM  

ha-ha-guy: NostroZ: Practically speaking, in other MI towns, how have the managers left?  Is there an election after they do what they do?  Is there just a time line for them to 'clean house' and then they are out?  What prevents the leaders who come in from renouncing the managers decisions/agreements?

The state legislature passed a law allowing the governor to appoint a manager over any city whose finances met a certain criteria.  The powers of the manager are limited by that law.  I'd imagine the moment the manager leaves the actions of the manager can be renounced, but if that tanks the city's books again, they'll just find themselves with another manager.  As for if the current leadership refuses to play ball with the manager, I'd imagine the state troopers would go in to arrest the leadership for breaking the law.


So as far as I understand it, the State is super-ceding the City in their authority.
Since we're a Democratic-Republic and the Constitution gives powers to the state not written in it, etc.  The state legislature is the ultimate controlled of all this and by extension the manager works on behalf of the entire state.

Anyone have details on what the previous managers in MI did and what were the results?
 
2013-05-15 11:16:27 AM  

Pariah.: EatHam: Pariah.: The constant jokes and insults have created a impenetrable, nation and even WORLD-wide negative impression of the place.

It's not the jokes and insults that did that.

None of Detroits problems were CREATED by them, but ALL of Detroit's problems are EXACERBATED by them. Stereotypes often have truth to them, but the jokes went a LONG way towards cementing Detroit's global reputation as a perpetual war zone.


I think the race riots which burned down half the city did most of that work.
 
2013-05-15 11:27:07 AM  

NostroZ: Anyone have details on what the previous managers in MI did and what were the results?


It depends on what metric you're using.  Since 1988 the state has had the ability to put a financial manager in place and they've done fairly well.  However such power was only used 10 times over the course of its history so it is a small sample size.  Also these financial managers weren't as permanent as the newer emergency manager.  The real success of the 1988 law though was the state could use the threat of taking over the finances to scare the city in question into getting their shiat together.

The new under which Orr is operating in Detroit only went into effect in March, so there is no previous data on this kind of manager.  The financial managers have done good work in Pontiac, Flint, etc though.  Of course the fundamental question was "Did the manager do it, or did the arrival of a state appointee cause the local government to unite together against a common enemy and get their shiat together finally?"  It's hard to track.  However for example Pontiac's schools are staying open and even working to open up a new technical prep school, a few years ago Pontiac couldn't even meet payroll.

http://www.theoaklandpress.com/articles/2013/05/14/news/local_news/d oc 5192d7375e0b9168751916.txt
 
2013-05-15 11:37:11 AM  

Pariah.: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.
...
It's not all bad, though.


Yes it is.  I flew into the airport in Dearborn on a business trip and I had to go through 5 cab drivers before I found one that would even drive near Detroit, let alone into it.  Then once I was in, I found out why and wished I was out.

There two things worth saving:  Tiger's Stadium and the Henry Ford Museum.  The rest can be bulldozed.
 
2013-05-15 11:57:18 AM  

ha-ha-guy: NostroZ: Anyone have details on what the previous managers in MI did and what were the results?

It depends on what metric you're using.  Since 1988 the state has had the ability to put a financial manager in place and they've done fairly well.  However such power was only used 10 times over the course of its history so it is a small sample size.  Also these financial managers weren't as permanent as the newer emergency manager.  The real success of the 1988 law though was the state could use the threat of taking over the finances to scare the city in question into getting their shiat together.

The new under which Orr is operating in Detroit only went into effect in March, so there is no previous data on this kind of manager.  The financial managers have done good work in Pontiac, Flint, etc though.  Of course the fundamental question was "Did the manager do it, or did the arrival of a state appointee cause the local government to unite together against a common enemy and get their shiat together finally?"  It's hard to track.  However for example Pontiac's schools are staying open and even working to open up a new technical prep school, a few years ago Pontiac couldn't even meet payroll.

http://www.theoaklandpress.com/articles/2013/05/14/news/local_news/d oc 5192d7375e0b9168751916.txt


Thank you.
That was pretty much what I wanted to know about the situation... I hear the cries of totalitarianism and the end of Democracy, but this is not the first time it was done and it's being done by the State to get things working.  Now I have the context to rationally discuss this issue.  Thx again.
 
2013-05-15 12:27:40 PM  

NostroZ: ha-ha-guy: NostroZ: Practically speaking, in other MI towns, how have the managers left?  Is there an election after they do what they do?  Is there just a time line for them to 'clean house' and then they are out?  What prevents the leaders who come in from renouncing the managers decisions/agreements?

The state legislature passed a law allowing the governor to appoint a manager over any city whose finances met a certain criteria.  The powers of the manager are limited by that law.  I'd imagine the moment the manager leaves the actions of the manager can be renounced, but if that tanks the city's books again, they'll just find themselves with another manager.  As for if the current leadership refuses to play ball with the manager, I'd imagine the state troopers would go in to arrest the leadership for breaking the law.

So as far as I understand it, the State is super-ceding the City in their authority.
Since we're a Democratic-Republic and the Constitution gives powers to the state not written in it, etc.  The state legislature is the ultimate controlled of all this and by extension the manager works on behalf of the entire state.

Anyone have details on what the previous managers in MI did and what were the results?


Hopefully they will spend more tax payer money building new sports stadiums.
 
2013-05-15 12:35:17 PM  

kregh99: Pariah.: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.
...
It's not all bad, though.

Yes it is.  I flew into the airport in Dearborn on a business trip and I had to go through 5 cab drivers before I found one that would even drive near Detroit, let alone into it.  Then once I was in, I found out why and wished I was out.

There two things worth saving:  Tiger's Stadium and the Henry Ford Museum.  The rest can be bulldozed.


There hasn't been an airport in Dearborn since 1947.

Tiger Stadium no longer exists.

Henry Ford Museum is not in Detroit.

But please, share your expertise about your one trip to Detroit with us.
 
2013-05-15 12:56:23 PM  

mcreadyblue: Hopefully they will spend more tax payer money building new sports stadiums.


Maybe they can make some sweet, sweet deals with local corporations, like the auto makers or Pfizer, to guarantee that they keep their facilities in the area.
 
2013-05-15 01:00:35 PM  
Im sure all the money from the casinos will turn the city around.
 
2013-05-15 02:11:21 PM  

groppet: Im sure all the money from the casinos will turn the city around.


It would have if the money actually went to where they said it'd go instead of the pockets of various politicians.
 
2013-05-15 04:56:43 PM  

Pariah.: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.

Yup. Detroit does need some of the things that an emergency manager can do, but it's a thorny issue.  No one is really even sure if the managers are constitutional, and there have been something like 6 other Michigan cities that have had managers, and all of them have left those cities in far worse shape than when they started. I'm not optimistic. Neither the city council nor the governor has the answers or I think are really capable of truly finding solutions. They're just playing politics most of the time.

At the moment, there is one simple, seemingly unsolvable problem: There is simply no tax base. Business and industry crashed, crime went up, people left. No one will invest in the 'Baghdad of America' because there's no worker/consumer base here, and no one will move here because there's no business and industry. Both people and businesses are also scared off by the horror stories and stereotype that have grown up around the city. Even raising taxes (which hasn't REALLY been considered and probably needs to be) wouldn't help much, because the tax base is so small for the city's size. It's a vacuum and a total standoff, with people and business each waiting for the other to DO SOMETHING before they act themselves. Add in corrupt city government, predatory Republican lawmakers in Lansing, and a REALLY uneducated voter population, and you have a Gordian Knot of a problem.

It's not all bad, though. There are several business interests that have taken advantage of the low pricing to buy up lots of things downtown and move companies down there. The downtown area is clean, safe, well-policed, and has not a single vacant building. There are businesses everywhere, and housing is being added slowly to the Midtown area. Young professionals (often after graduating from Wayne State in midtown or other MI universities) are starting to move down there.

The rot spread from the center outwards during 'white flight' decades ago, but the center of the city has been reborn, before the rot even made it to the edge of the city. That middle ring is where the city is at it's worst.

This gradual redevelopment by brave businesses is probably the only solution in the long run. This is why I get so pissed off when the stupid motherless cum dumpsters who've never been within a thousand miles of this city descend on these threads with their tired jokes about Robocop and Kentucky Fried Movie. The constant jokes and insults have created a impenetrable, nation and even WORLD-wide negative impression of the place. Detroit is almost a byword for 'murder capital of the world' despite the fact that Detroit has never ever been #1 in even the US in crime and violence. If I even tell someone I'm from Detroit, the first thing they ask me about is murders, getting mugged, dodging bullets in the streets, etc. So many people (and businesses) I know as friends would never even for a moment consider even VISITING Detroit, with the same 'well duh' as if you just suggested heading over to Somalia for a beer.


Talk about rose colored glasses.  Do you work for the cities PR department?

Let's take crime.  Quote from Detroit's wikipedia page:

According to CBS News, Detroit was the most dangerous city in the United States for the 4th year in a row in a 2010 survey by the FBI. Their findings concluded that the city's metropolitan area had a significant rate of violent crimes: murder and non-negligent manslaughter, forcible rape, robbery, and aggravated assault.

How about this supposed "revival" of the city:

Between 2000 and 2010, the city's population fell by 25%, from the nation's 10th largest city to 18th.  In 2010, the city had a population of 713,777, more than a 60% drop down from a peak population of over 1.8 million at the 1950 census, indicating a serious and long-running decline of Detroit's economic strength.
 
2013-05-15 08:19:08 PM  
Everyone complains about past Mayors as being the worst problem (can you say Kwami). The real
problem however is the city council. Some of the worst people I have ever seen in my life get elected
to those council seats. They spent money like water made side deals and seem to oppose anything and
everything that would actually improve the city unless they can dip their beak in the money well. Then when
things go horribly wrong they try to blame the mayor or in some cases the white suburbs or the whitey controlled
Michigan house and senate. Never once have I seen the council as a whole take the fall for things that went bad
in Detroit yet 90 percent of Detroit's governmental problems start with them.
 
2013-05-15 10:31:54 PM  

Kaiser Chieftess: kregh99: Pariah.: Englebert Slaptyback: In other news, Detroit has an emergency financial manager.
...
It's not all bad, though.

Yes it is.  I flew into the airport in Dearborn on a business trip and I had to go through 5 cab drivers before I found one that would even drive near Detroit, let alone into it.  Then once I was in, I found out why and wished I was out.

There two things worth saving:  Tiger's Stadium and the Henry Ford Museum.  The rest can be bulldozed.

There hasn't been an airport in Dearborn since 1947.

Tiger Stadium no longer exists.

Henry Ford Museum is not in Detroit.

But please, share your expertise about your one trip to Detroit with us.


www.allfordmustangs.com
 
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