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Review team: Detroit faces financial crisis, HAS NO PLAN TO FIX IT

Home - by - February 20, 2013 - 21:15 America/New_York - 19 Comments

the Detroit News

Detroit — For the second time in a year, a state review team has found Detroit is in a financial emergency that requires Gov. Rick Snyder to intervene in City Hall.

But this time, if Snyder agrees that a financial emergency exists, the governor’s choices are more limited. He could appoint an emergency manager to keep Michigan’s largest city from plunging into bankruptcy, experts say, or he could continue state financial supervision through a new consent agreement, which seems a faint possibility.

State Treasurer Andy Dillon ruled out a bankruptcy filing at this time.

The six-member review team unanimously concluded in a report released Tuesday that the city failed to restructure its debt-laden bureaucracy under the financial consent agreement signed in April and that Detroit’s financial crisis requires Snyder’s intervention “because no satisfactory plan exists to resolve a serious financial problem.”

“We gave the city every chance to avoid the outcome we’re recommending to the governor today,” said Dillon, who led the review team.

He was more direct in an interview after the press conference.

“The city doesn’t have more time,” Dillon said. “They have limited cash right now, limited ability to access capital markets. I kind of think they’ve got one more bite of the apple to get it right.”

In a sobering report to Snyder, the review team found Detroit has:

A cash-flow deficit of more than $100 million without “significant spending cuts” by June 30, on top of an accumulated deficit of $327 million.

$14.9 billion, including unfunded pension and employee retirement liabilities. The city also needs $1.9 billion during the next five years to make payments for the liabilities, but city officials have no debt payment plan.

Accumulated deficits in the general fund of $155.4 million to $331.9 million annually since the 2005 fiscal year.

Dillon said the city has been “masking over” annual deficits with long-term borrowing. The report said that without the borrowing, the deficits would total $937 million in fiscal year 2012.

“We believe there’s a financial emergency in the city and that there’s no plan in place to correct the situation,” Dillon said

MORE: http://www.detroitnews.com/article/20130220/METRO01/302200361#ixzz2LT1GwcgY

 

» 19 Comments

  1. FreeMan & Sarah Intend to Defend

    February 20th, 2013

    But Obysmal said it would make a comeback.

    Thumb up +6

     
  2. thirdtwin

    February 20th, 2013

    Freeman, Destroit is coming back…for another handout.

    And what marketing genius came up with that “Imported From Detroit” bullshit?

    Thumb up +5

     
  3. sig94

    February 20th, 2013

    Maybe we should ask the Japanese to nuke Detroit, fly the Enora Gay over and drop the Dumb Boy. The number killed will be nothing more than a typical Friday night.

    Thumb up +4

     
  4. Cynic

    February 20th, 2013

    Detroit – America’s Greece

    Thumb up +4

     
  5. FreeMan & Sarah Intend to Defend

    February 20th, 2013

    Put a spork in it!

    Thumb up +3

     
  6. Unneutral

    February 20th, 2013

    Vote another democrat into office, they claim to know it all.

    Thumb up +4

     
  7. Maudie N Mandeville

    February 20th, 2013

    Wouldn’t it be sweet if the ‘financial emergency’ included a crewcut to all the current and future pensions the natives were planning on? WE’re talking buzzsaw.

    Thumb up +5

     
  8. Stranded in Sonoma

    February 20th, 2013

    This is all a Republican plot. The Republicans have been running this town for years and look where it got us. We need to get rid of these Republicans that are killing our fair city of Detroit with their tax cuts, lower spending, war on women…I’m sorry, what?

    Mr. Cockrel, we democrats have been running this town since the mid 1960s.

    What does the truth have to do with it? I’ve got an agenda to sell.

    Thumb up +4

     
  9. Edith McCrotch

    February 20th, 2013

    The city leaders of Detroit need to be taken out and shot in public by firing squad..then announce that as of that moment Detroit is now officially an “open city”.

    Thumb up +2

     
  10. Corona

    February 20th, 2013

    Detroit is Americas’ landfill answer. Why fight it? Just drive up & dump. It’s not like the living will notice.

    Thumb up +2

     
  11. serfer62

    February 20th, 2013

    I have an idea, lets burn it down
    did that already?
    Ohh

    Thumb up +2

     
  12. Doug Wakeman

    February 21st, 2013

    Snyder needs to say “The good people of Detroit have the franchise and have decided to use it to put their city in the hands of known criminals and corrupt Democrats for 50 years. We will do nothing for them. We may just wall the place off. Screw Detroit. And, by the way, with the election of Obama twice, the American people have obviously decided to follow Detroit into the toilet”

    Thumb up +3

     
  13. Aufklarer

    February 21st, 2013

    The standard excuse here in Deetroyt is that it’s all the rich, white Republicans’ fault because they took all their money and moved out to the suburbs. Really.

    Thumb up +2

     
  14. HardyBrooks

    February 21st, 2013

    Welcome to the future socialist utopia
    of the USSA, where everyone is expendable
    and the criminal leaders have finally shown us
    the plan for every major union dominated industrial city in
    the northeast and midwest, drowning in their own
    waste and corruption, waiting for the rest of the country to bail them out…………

    Thumb up 0

     
  15. Chieftain

    February 21st, 2013

    The biggest problem facing Detroit is the all-black City Council who has already announced that they will not accept any white emergency manager. And everyone who is even remotely qualified has already waved off and said they have no interest in the job because of the racial overtones and extreme disfunction present in Detroit’s City Gubment. Any move made by an emergency manager is guaranteed to be tied up in court by the very people who are responsible for this mess in the first place.

    In my view, the best thing for Detroit would be a low-level pass by a fleet of Air Force tankers for a joint fuel-dump and flare drop.

    Thumb up +2

     
  16. Dr. Tar

    February 21st, 2013

    The governor will end up having to declare marshal law, send in the national guard and designate Detroit a man made disaster.

    Then they’ll evacuate the city and build a giant Chernobyl like sarcophagus around it to prevent the fall out from spreading to other Democratically controlled cities.

    Thumb up 0

     
  17. B. Hussein Obama

    February 21st, 2013

    A glimpse of America’s future …

    Thumb up +1

     
  18. Billy Fuster

    February 21st, 2013

    Federal bailout coming soon…

    Thumb up 0

     
  19. GI-had Joe

    February 21st, 2013

    I’ve read this book before. Refer to Chapter 11 which is entitled “United States faces finacial crisis, HAS NO PLAN TO FIX IT.”

    Thumb up 0