Update: Friday, 5 p.m. -- Mayor Mike Duggan and City Council President Brenda Jones issued a joint statement on the restructuring plan in Bankruptcy Court.
The Plan of Adjustment is a sober reality check for our city. While some city services would receive much needed help, it is no surprise there will be difficult decisions ahead that affect residents, city workers and retirees.
The plan proposal provides us a framework for how we can move forward in delivering our most vital services with limited resources. The Mayor’s office and City Council are committed to working together to achieve the goal of putting the city back on a solid financial foundation.
Across every department of city government, we are working together to identify new revenue streams and cost efficiencies that will allow us to provide well-managed services that all Detroiters expect and deserve.
Our city’s future depends on our ability to grow its tax base, maximize efficiencies and manage costs. That is why we are united in our commitment to delivering a level of service that allows our city to retain and attract residents, grow businesses and encourage other forms of investment.
Original article, 12:25 p.m.:
The city of Detroit on Friday filed in court the long-awaited debt cutting plan for its Chapter 9 bankruptcy that's likely to make a lot of folks unhappy.
Robert Snell and Chad Livengood of The Detroit News report that the plan, referred to as "the plan of adjustment," is designed to set the city on a more stable course. It calls for 34 percent cuts in pensions for general retirees and 10 percent cuts for cops and firefighters.
The plan is designed to shed billions of dollars of debt while providing more money for city services, which remain woefully inadequate.
The News writes:
The plan of adjustment, which outlines a 10-year plan to invest in blight removal, technology and capital improvement projects, also offers the holders of $374.6 million in unlimited tax general obligation bonds 20 percent of what they’re owed.
“The proposed plan of adjustment is a gut punch to Detroit city workers and retirees,” said Al Garrett, president of AFSCME Council 25, the city’s largest union.
The 120-page plan pits retirees against banks and outlines cuts to various groups of creditors. The plan of adjustment also provided new details about ongoing attempts to spin off the city’s Water and Sewerage Department, shield the Detroit Institute of Arts’ masterpieces from a fire sale and restructure $11.5 billion in unsecured claims.
The Free Press reports that the plan details offers to more than 100,000 creditors. It also includes a “disclosure statement” that shows how Emergency Manager Kevyn Orr plans to reshape the city’s bureaucracy.
The Freep writes:
The city’s goal is to pay less money to Wall Street, retirees and bondholders — which collectively receive about 4 in 10 of the city’s sparse general fund dollars — and about $1.5 billion over 10 years in investment in improve public protection, restore services and reduce blight.
