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[Ripclawe]

http://hosted.ap.org/dynamic/storie...ME&TEMPLATE=DEFAULT&CTIME=2013-05-13-04-20-37

DETROIT (AP) -- The first report by Detroit's emergency manager declares that the city is broke and at risk of running completely out of money - a financial meltdown that could mean employees don't get paid, retirees lose their pensions and residents endure even deeper cuts in municipal services.

If Detroit cannot avert disaster by reducing its debt payments, the only remaining option appears to be bankruptcy, a threat that looms large over Kevyn Orr's urgent efforts to make deals with creditors and debt holders. Orr says he will have to seek concessions from those groups to keep the Motor City afloat.

"On a cash-flow basis, we don't have it. We're broke," Orr said Monday at a news conference. He said the city can make payroll through the rest of the year, but that some other bills and obligations are not being paid or are being deferred.

"We can't continue to do what we've been doing," he said. "It's probably a little worse than I expected. It's severe. I mean it's dire."

In March 2012, Detroit borrowed $80 million from Bank of America to avoid running out of money. But the outlook has not improved in the last year.

Orr's "first attention has got to be turned to making sure he has enough money to pay the bills he has coming in," said James McTevia, president of McTevia and Associates, a Detroit-area turnaround firm. "If I'm a creditor getting paid for my current goods and services, I'm going to be more apt to work out on something I'm owed."

Orr, a Washington-based turnaround expert and bankruptcy attorney, was selected by Gov. Rick Snyder to oversee Detroit's finances. In his report, Orr described the city's operations as "dysfunctional and wasteful after years of budgetary restrictions, mismanagement, crippling operational practices and, in some cases, indifference or corruption."

"Outdated policies, work practices, procedures and systems must be improved consistent with best practices of 21st century government," Orr wrote. "A well-run city will promote cost savings and better customer service and will encourage private investment and a return of residents."

Detroit's net cash position - the amount of money in the bank after bills are paid - was a negative $162 million as of April 26. The budget deficit that a few months ago was believed to be about $327 million could reach $386 million before July 1.

The city also owes more than $400 million, including $124 million for public improvement projects. Its long-term debt tops $14 billion.

Orr avoids using the word "bankruptcy" in the 41-page report to the state treasurer and said Monday that he believes it won't be necessary. He expects to have a clearer picture about the path ahead in six to eight weeks.

"I think we can avoid bankruptcy if people move forward in good faith," Orr said. "It's going to be hard. I don't expect anybody to say OK. I expect there to be some give and take. If we can't, we have to look at everything."

Snyder agreed that bankruptcy wasn't inevitable.

"There's a whole process you go through, and the process includes trying to work with people to not have that happen," the governor said.

City officials in Stockton, Calif., sought Chapter 9 bankruptcy protection after tentative agreements with some of the city's unions failed to provide enough financial relief. The community was still unable to pay its bills or make payroll, and City Manager Bob Deis said further cuts required court intervention.

"Bankruptcy is not a desirable option unless it's the absolute last option you have," Deis said. "Bankruptcy is not the disease. Bankruptcy is the chemotherapy for the disease."

Bankruptcy protection allowed Stockton to wipe out $8 million to $9 million in annual retiree health care costs and freeze $13 million in yearly debt payments for later renegotiation.

Orr may choose to go before a bankruptcy judge "when he gets his back against the wall and he can't meet payroll," McTevia said.

"He can default on payments to pension funds. He will try to sit down and negotiate with the pension funds: `We can do this out of court or we can do this in court.' The same thing with bond holders. It will take years for Detroit to ever pay its bonds, and they need to be negotiated," McTevia said.

The bulk of the city's revenue comes from property and business taxes. But Detroit's population dropped by 250,000 between 2000 and 2010. And outside of downtown and a few other areas, business growth virtually is nil.

"My gut feeling is that taxes are going to have to be raised at some time," possibly a temporary surcharge on businesses to keep the city afloat, McTevia added.

A Chapter 9 bankruptcy filing would also mean even more spending cuts, according to Wayne State Law School professor Peter Henning.

Bing says his administration has cut about $350 million in wages and benefits. Dozens of jobs have been cut or left unfilled.

"Services never improve after a bankruptcy," Henning said. "I read through Orr's report. The emphasis is really on the cost-cutting and the restructuring. Rarely does that improve services in the short run. In the short run, city services are going to suffer."

 

[Phire Phox]

http://www.youtube.com/watch?v=GsoKr_pCQjU

 

[LongDongJunon]

I got a question for you. What does this city know about luxury?
What does a town that’s been to Hell and back know about “the finer things in life”?
Well, I’ll tell you. More than most.
You see, it’s the hottest fires that make the hardest steel.
Add hard work and conviction and the know-how that runs generations deep in every last one of us.
That’s who we are.
That’s our story.
No, its probably not the one you’ve been reading in papers.
The one being written by folks who have never even been here and don’t know what we’re capable of.
Because when it comes to luxury, it’s as much about where it’s from, as who it’s for.
Now, we’re from America, but this isn’t New York City.
Or The Windy City.
Or Sin City.
And we’re certainly no one’s Emerald City.
This is the Motor City.
And this is what we do.

...nah just kiddin'

 

[Escape Goat]

The bulk of the city's revenue comes from property and business taxes. But Detroit's population dropped by 250,000 between 2000 and 2010. And outside of downtown and a few other areas, business growth virtually is nil.

welp. I say we just nuke the site from orbi...I mean evacuate the city and transform it into a museum of how fucked up goverment can kill industry.

 

[Avixph]

Evilore should buy it.

 

[Pai Pai Master]

Evilore should buy it.

When a permaban is not enough. Banned member must move to Detroit.

 

[Escape Goat]

Evilore should buy it.

and have the mods be his lieutenants? Who run around with impunity with no regard for civil liberties and due process? Banning citizens left and right without a trial of their peers?

 

[Snaku]

welp. I say we just nuke the site from orbi...I mean evacuate the city and transform it into a museum of how fucked up goverment can kill industry.

Naw, bulldoze it and build Delta City on its grave.

 

[Jetman]

$14 Billion in debt?! Oh my God, just shut the city down, lol. How would they ever pay that off? Seriously.

 

[ClassyPenguin]

welp. I say we just nuke the site from orbi...I mean evacuate the city and transform it into a museum of how fucked up goverment can kill industry.

wut?

 

[Slayer-33]

Corporate buyout inc

 

[Instro]

Turn it into a giant prison.

 

[Piecake]

wut?

I am going to assume that he meant globalization, incompetent companies and unions

 

[perfectchaos007]

Turn it into a giant prison.

Good idea, our prisons are currently over capacity. Detroit would be a great place to lock up citizens convicted of non-violent drug crimes.

 

[legacyzero]

Turn it into a giant prison.

I was thinking the same thing lol

Sorry Wedge.

 

[outsida]

How much longer until OCP buys the city and builds Robocop?

 

[crozier]

$14 Billion in debt?! Oh my God, just shut the city down, lol. How would they ever pay that off? Seriously.

Small potatoes when you consider that the low-ball debt estimate for California is $848 billion on up to $1.2 trillion. Detroit is a reasonably large city too.

 

[Avixph]

Good idea, our prisons are currently over capacity. Detroit would be a great place to lock up citizens convicted of non-violent drug crimes.

Or to lock up people convicted of living in Detroit.

 

[Judderman]

When a permaban is not enough. Banned member must move to Detroit.

Thank you for making me imagine him saying "Take him to Detroit!"

 

[Chichikov]

The government should step in and bail them.
I love Detroit jokes as much as the next guy, but for fuck's sake, Detroit is an American city, part of the soul of this country, it's fucking Motown dammit, we have the money to save fucking wall street but not Detroit?

 

[Tesseract]

literally, metaphorically, morally. my dad said they're gonna bulldoze everything and start over. unfortunately my dad isn't will wright.

 

[ambientmystic]

How much longer until OCP buys the city and builds Robocop?

Was just thinking the same thing. First corporate owned city in America?

 

[You Are Viewtiful]

Small potatoes when you consider that the low-ball debt estimate for California is $848 billion on up to $1.2 trillion. Detroit is a reasonably large city too.

Yeah but that's a state and this is a city.

 

[crozier]

Yeah but that's a state and this is a city.

Look at the debt per capita and California is winning. Granted, California's projected earnings are probably a wee-bit higher too...

 

[AH88]

Turn it into a giant prison.

It's kind of already a giant insane asylum here.
Yes, I'm lucky enough to be living in the shit hole known as Detroit.

 

[gurudyne]

EA buys Detroit, plans for SimCity 6. "Amazing graphics."

 

[Kastrioti]

So much is riding on the broad shoulders and God-given arm strength of Matthew Stafford and the Inhuman combination of size, athleticism and WR skills Megatron has.

If the New Orleans Saints can win a Superbowl, so can the Detroit Lions.

 

[benjipwns]

we have the money to save fucking wall street but not Detroit?

We don't have the money for either.

And "bailing out" Detroit won't do anything but kick the can down the road yet again. The city basically doesn't function as a city probably should. It pretty much needs the bankruptcy process at this point to fix all the structural problems and undermine a lot of the embedded corruption and mismanagement.

There are a bunch of departments that literally do not provide city services anymore but are stocked full of administrators and other employees drawing full salaries, pensions, benefits, etc. Even the departments that do still provide services have cut back more and more on the quality and quantity of those services while costs have skyrocketed.

 

[lenovox1]

They need help, and bankruptcy might bring them that help faster.

I would feel terrible for the cities pensioners. I'm sure they'd be the most affected in a Chapter 9 scenario, and they didn't cause Detroit's problems. But the city obviously has a lot of debts they need to settle before they can move forward.

 

[Ripclawe]

The biggest problem for Detroit structure wise is that its operating expenses is for a city with a lot more people. Cut it down to size is the first big step

 

[Piecake]

We don't have the money for either.

And "bailing out" Detroit won't do anything but kick the can down the road yet again. The city basically doesn't function as a city probably should. It pretty much needs the bankruptcy process at this point to fix all the structural problems and undermine a lot of the embedded corruption and mismanagement.

Yea, who cares about the people who are going to get fucked over when they lose their pensions

And we have plenty of money. All we need is the political will to spend it (pipe dream)

Well, if the city does go bankrupt, I hope that the US government backs Detroit pensioners

 

[entremet]

We don't have the money for either.

And "bailing out" Detroit won't do anything but kick the can down the road yet again. The city basically doesn't function as a city probably should. It pretty much needs the bankruptcy process at this point to fix all the structural problems and undermine a lot of the embedded corruption and mismanagement.

You don't seriously believe this do you?

 

[SlickShoesRUCrazy]

Viral Marketing for the new Robocop?

Omnicorp going to buy Detroit!

 

[Grover Cleveland]

It's so cold in the D

 

[Shard]

Dear gods, I never though I would saying that Robocop was a god damn documentary and yet here we are.

 

[Chichikov]

We don't have the money for either.

We can't afford 18 billion?
The us federal budget is over 3.5 trillion dollars, regardless of your opinion of the size of the deficit, that half of a percent, it's not going to move the economic needle one way or another.

And sheeeeeit, don't make me go line by line in the federal budget and list the things I think are less important than saving such important American city.

And "bailing out" Detroit won't do anything but kick the can down the road yet again. The city basically doesn't function as a city probably should. It pretty much needs the bankruptcy process at this point to fix all the structural problems and undermine a lot of the embedded corruption and mismanagement.

Bankruptcy is an expensive and inefficient way to do such things.
Not only do you make it quite hard to raise cash in the future, you're hurting Americans who own that debt (either by bonds our service providers waiting to be paid).

That is not to say that Detroit doesn't need to make some major changes, but you need to remember that there isn't really many precedents to such urban depopulation, at least not in this scale, we're pretty much in uncharted territory here.
I think mistakes are almost inevitable, and we should not punish the normal people just trying to live their for politicians mistakes.

 

[benjipwns]

Yea, who cares about the people who are going to get fucked over when they lose their pensions

Yeah, who cares about all the poor and middle class who are going to get fucked to fund a bunch of overpromised unrealistic pensions for the dopes who drove the city into the ground for decades.

we should not punish the normal people just trying to live their for politicians mistakes.

There's no way to do this. Throwing more money into the money fires of Detroit isn't going to make it suddenly return to being a functioning city.

 

[smurfx]

When a permaban is not enough. Banned member must move to Detroit.

perma banned users get parachuted down to detroit and whoever escapes first gets unbanned. bishop and the other mods will be hunting them down while they try to escape.

 

[Pctx]

Detroit, brought to you by Pepsi.

 

[Polari]

And "bailing out" Detroit won't do anything but kick the can down the road yet again. The city basically doesn't function as a city probably should. It pretty much needs the bankruptcy process at this point to fix all the structural problems and undermine a lot of the embedded corruption and mismanagement.

It's a tough one. Bailing it out of current debt alone is not the solution, but there really needs to be strong investment in the area and I can't see that happening without government leading the way. From what I've heard the people of Detroit don't do themselves any favours with the officials they elect. That said, geographically there's nothing wrong with it. I know it's a hotly debated issue, and I'm not saying this would have any effect on its own, but Chicago-Detroit-Toronto would be perfect for a high speed rail corridor.

Evilore should buy it.

I don't get why people on here feel the need to bring up Evilore in every other topic and more or less derail threads. Same thing in the Lambo thread "I wonder if Evilore could afford it?" smh

 

[Liberty4all]

I have family in Detroit. Rochester Hills actually, some of the biggest damn houses I've seen in my life. Like mansion big albeit decaying mansion.

I asked my wife's cousin how they could afford this 5 thousand sq ft monstronsity. Turns out it only cost 200k or so.

I hope the city can pull through for the pensioners sake. The city though in the core really does look like how you'd imagine a post apocalyptic America. A stark warning.

 

[Avixph]

perma banned users get parachuted down to detroit and whoever escapes first gets unbanned. bishop and the other mods will be hunting them down while they try to escape.

The most dangerous game forum.

 

[lenovox1]

You don't seriously believe this do you?

I think he's saying that sending money into Detroit as it is would be like trying to fix a broken arm with a BandAid. There aren't enough BandAids in the world.

 

[BrLvgThrChmstry]

I don't get why people on here feel the need to bring up Evilore in every other topic and more or less derail threads. Same thing in the Lambo thread "I wonder if Evilore could afford it?" smh

Jesus dude, calm down. He was joking for one. And two, where is the derailment? ...seriously, go take a chill pill. Are you the Evilore defense force? question... does he need one? Probably not.

 

[Wuthering_Heights]

They should use the city and make Death Race a reality.

 

[Vicetrailia]

Sounds like Detroit is too corrupt to just send money to, damn.

 

[bomma_man]

danny brown could sort it out

 

[Eighty Deuce]

Burn Detroit down and collect the insurance

 

[vitaminwateryum]

Meanwhile, this beautiful piece of artwork is being prepared.

 

[You Are Viewtiful]

Yeah, who cares about all the poor and middle class who are going to get fucked to fund a bunch of overpromised unrealistic pensions for the dopes who drove the city into the ground for decades.

There's no way to do this. Throwing more money into the money fires of Detroit isn't going to make it suddenly return to being a functioning city.

What makes you think people with "overpromised unrealistic pensions" are anything but middle class? Unless we are talking public sector CEOs and administrators. Class warfare how does it work?...