With Detroit drowning in debt, is an EM the answer? - New York News

With Detroit drowning in debt, is an emergency manager the answer?

Posted: Updated:

By Charlie LeDuff
Fox 2 News


DETROIT (WJBK) --  There is a lot of talk about an emergency manager coming to Detroit and replacing the mayor, so we got in touch with Joe Harris, the emergency manager in Benton Harbor and the former auditor general of Detroit.  What does he think about the city, its finances and its mayor?

"When they asked mayor wannabe Bing how [are] you going to fix this, he [said] we're going to bring in our team of experts and they are going to develop a plan to help us get out of this.  There was only one thing missing from the team of experts -- expertise.  They didn't know what the hell they were doing."

Now Dave Bing didn't create Detroit's money problems.  He only added to it.

Detroit, here is the brass tacks of your finances.  Over the next two decades or so, we will have to pay back $20 billion in debt.  That doesn't include the $500 million deficit we're expected to run up this year alone.

So what's that mean?  It means Detroit spends as much as half its money to pay its credit card.  Another 40 percent goes just to pay cops, fire and other city workers.  What's left over?  About nine cents to pay for toilet paper and tires and heat.  You can't fix the city with that!

So how did things get this way?  Simple.  White flight, black flight, business flight, falling property taxes, poor government and public corruption.  There's nothing left in Detroit except unpaid bills, and now the state is reviewing the books for the second time in a year and they're talking about an emergency manager.

Sadly people talk about race and colonialism when it's really about somebody making sense of the dollars and cents.

"The state has a responsibility to protect the health, safety and welfare of its residents regardless of where they live or regardless of what school district they go to," said Treasury spokesman Terry Stanton.

Now the findings of the state financial review team are due at the end of February, but they could come any day now, and when they do, one of three things will happen.  Nothing, which is unlikely.  Two, we could get a new, tougher consent agreement, but you know how the last one worked out.  Or, three, Detroit could have an emergency financial manager appointed, who has limited power over the budget and contracts.  But under new state law, the emergency financial manager will become the emergency manager on March 27, and the emergency manager has king-like powers to kill union negotiated contracts, he could slash pensions, he could renegotiate the debt, he could sell the water department, or get this, he can get rid of the mayor and city council.

"I believe you need an EM, and you need it because you need a non-politician who understands business, how to turn a business around," Harris said.

But it's a city, not a business.

"It is a business and you've got the police department, you've got the fire department, you've got the transportation and all of these are providing services to individuals," Harris countered.

"If you don't satisfy them, they'll go across the border and they'll go elsewhere to shop and to live and to work and so forth."

The mayor and the city council have already cut police and fire to the bone and the city has become unlivable.  Experts say bring on the emergency manager because city leaders just don't know what they're doing.

"The big issue is the long-term debt and the borrowing that the city's done going back to Mayor Cavanaugh.  That is total principal and interest almost $15 billion by itself.  If you don't deal with that, you can't fix this issue.  Nothing else will do," said Eric Foster, president of Foster McCollum White and Associates.

"What did I do in Benton Harbor?" said Harris.  "I took a $3.5 million public safety budget.  It's $2.5 million.  Public safety has never been better.  I combined police and fire."

Harris added whoever it is, he's going to have to slaughter the sacred and politically connected cows.

"The emergency manager sometimes has to do what the politicians won't do.  There are so many special interest groups that affect the decisions that are being made by the mayor and the council."

Detroit's politicians can't make tough decisions?  He can't be more right because guess what the mayor and the city council decided to do on Tuesday?  Hire yet more outside experts to count the money and find places to save it.

How much are we paying these new plan makers?  We asked Kriss Andrews, the guy we're already paying $220,000 to make the plan.

"The answer is if I sat down with a pencil and paper for 20 minutes I could, but I can't here today," he said during a news conference.

So far those contracts total $14 million.  It's interesting to point out that the mayor and the city council's budget combined equal just over $14 million.  I see a place to save some money.

And so finally you might wonder who is on the short list to become emergency manager.  One of the front runners is said to be Charlie Beckham.  His resume?  Former chief operating officer under Kwame Kilpatrick, chief administrative officer for Dave Bing and water department director under Coleman Young for which he served two years in prison in a bribery scandal.  Seriously.

The city's financial footing erodes by the day, but it's unlikely the governor would make a bold move this month at least.  We've got the auto show coming up and you don't need 4,000 bored journalists writing stories about Detroit's collapse instead of a new Cadillac.  But a decision's got to be made soon.  The city is in near anarchy.

  • Charlie LeDuffCharlie LeDuffMore>>

  • Court: Ex-judge Wade McCree immune from civil suit

    Court: Ex-judge Wade McCree immune from civil suit

    Tuesday, July 22 2014 2:04 PM EDT2014-07-22 18:04:29 GMT
    The infamous selfie taken by Judge Wade mcCree. The infamous selfie taken by Judge Wade mcCree.
    A federal appeals court has upheld a lower court's ruling that a disgraced Detroit judge cannot be sued by a defendant in a child support case he presided over.
    A federal appeals court has upheld a lower court's ruling that a disgraced Detroit judge cannot be sued by a defendant in a child support case he presided over.
  • LeDuff: Where is the respect for the real hosts of the Super Bowl?

    LeDuff: Where is the respect for the real hosts of the Super Bowl?

    Super Bowl XLVIII is in New York.  Well, not exactly.  The Super Bowl's host city is actually East Rutherford, N.J.  Sometimes it's hard to get respect in America if you're not from places like NYC or LA.
    Super Bowl XLVIII is in New York.  Well, not exactly.  The Super Bowl's host city is actually East Rutherford, N.J.  Sometimes it's hard to get respect in America if you're not from places like Los Angeles., Washington, D.C. or New York.  If you live in New Jersey, you're in the shadow of the Big Apple.
  • Ground Zero of the North Dakota Oil Boom

    Ground Zero of the North Dakota Oil Boom

    Friday, March 7 2014 12:11 PM EST2014-03-07 17:11:13 GMT
    In another installment of The Americans with Charlie LeDuff, Charlie and his crew head to Williston, North Dakota, where the oil boom is making the small town the epicenter of opportunity and big city problems.
    Tens of thousands of Americans are drifting into places like Williston, North Dakota where the oil boom is making the small town the epicenter of opportunity.

    If you're willing to work 100 hours a week you could make $100,000 in a year.  Along with opportunity there are problems and a changing landscape to small town life that's as harsh as winter on the northern planes.
  • Local NewsLocal NewsMore>>

  • NY brothers invent machine that makes CPR easier

    NY brothers invent machine that makes CPR easier

    Tuesday, July 29 2014 6:40 PM EDT2014-07-29 22:40:57 GMT
    Only 10 percent of people who get CPR from a bystander actually survive. But two young men in Westchester County have now patented a device that could dramatically increase those odds and save lives. John and Chris DiCapua's sitting room in their parents' Westchester County home has had a unique guest lying around for quite a while now: a CPR dummy. What began as an idea from their time as Boy Scouts is now a device that could potentially save lives.
    Only 10 percent of people who get CPR from a bystander actually survive. But two young men in Westchester County have now patented a device that could dramatically increase those odds and save lives. John and Chris DiCapua's sitting room in their parents' Westchester County home has had a unique guest lying around for quite a while now: a CPR dummy. What began as an idea from their time as Boy Scouts is now a device that could potentially save lives.
  • NYC stores with no signs feed curiosity

    NYC stores with no signs feed curiosity

    Tuesday, July 29 2014 6:31 PM EDT2014-07-29 22:31:37 GMT
    From coffee shops in Brooklyn to restaurants in Manhattan, we find speakeasies standing out by blending in. When people in Bushwick want a green machine juice blend they visit Leticia Castillo's Owl Juice Pub. But first they must find the owl. "We been doing fine without a sign," Castillo says.
    From coffee shops in Brooklyn to restaurants in Manhattan, we find speakeasies standing out by blending in. When people in Bushwick want a green machine juice blend they visit Leticia Castillo's Owl Juice Pub. But first they must find the owl. "We been doing fine without a sign," Castillo says.
  • Ex-Councilman Halloran quickly convicted in bribery plot

    Ex-Councilman Halloran quickly convicted in bribery plot

    Tuesday, July 29 2014 5:53 PM EDT2014-07-29 21:53:04 GMT
    A jury took only about 90 minutes Tuesday to convict former New York City Councilman Daniel Halloran of bribery charges in a scheme to buy a spot on the mayoral ballot for state Sen. Malcolm Smith. Halloran was also found guilty of taking payoffs from what he thought were developers who wanted him to funnel city money their way. The men were actually an FBI agent and an FBI informant.
    A jury took only about 90 minutes Tuesday to convict former New York City Councilman Daniel Halloran of bribery charges in a scheme to buy a spot on the mayoral ballot for state Sen. Malcolm Smith. Halloran was also found guilty of taking payoffs from what he thought were developers who wanted him to funnel city money their way. The men were actually an FBI agent and an FBI informant.
  • Charlie LeDuff: Off The ChainCharlie LeDuff: Off The ChainMore>>

  • Sayonara Bingaling

    Sayonara Bingaling

    Friday, December 13 2013 7:35 PM EST2013-12-14 00:35:18 GMT
    LeDuff: From my perch, I can say Bing was a mayor who preferred to get his nails polished but never dirty.
    LeDuff: From my perch, I can say Bing was a mayor who preferred to get his nails polished but never dirty.
  • LeDuff goes inside massive Detroit Police raid

    LeDuff goes inside massive Detroit Police raid

    Tuesday, December 3 2013 7:57 PM EST2013-12-04 00:57:27 GMT
    On Tuesday, police in Detroit teamed up with Michigan State Police and federal law enforcement officers to conduct a massive raid the size of a city block.
    On Tuesday, police in Detroit teamed up with Michigan State Police and federal law enforcement officers to conduct a massive raid the size of a city block.
  • Is this the crest of dawn in this thing we call a city?

    Is this the crest of dawn in this thing we call a city?

    Friday, November 8 2013 6:12 PM EST2013-11-08 23:12:53 GMT
    LeDuff: Darkness Rules. And then on a corner of a street called Crusade, a case of what should be considered normal becomes the extraordinary:a streetlight gets repaired. And the curtains get pulled back from the iron door.
    LeDuff: Darkness Rules. And then on a corner of a street called Crusade, a case of what should be considered normal becomes the extraordinary: a streetlight gets repaired. And the curtains get pulled back from the iron door.
  • Local NewsLocal NewsMore>>

  • Duggan bringing big changes to Detroit water department, starting with shutoffs

    Duggan bringing big changes to Detroit water department, starting with shutoffs

    Tuesday, July 29 2014 5:56 PM EDT2014-07-29 21:56:25 GMT
    Detroit Mayor Mike Duggan is promising big changes at the water department, starting with the controversial shutoffs."Certainly it has hurt the reputation of the city," Duggan said. "I have been anxious to do something about it for awhile and I am just glad I have a chance to do it,"Emergency Manager Kevyn Orr handed over the water department to the mayor and City Council TuesdayDuggan says better publicizing assitance programs is the biggest priority."I still don't think the people in need h...
    Detroit Mayor Mike Duggan is promising big changes at the water department, starting with the controversial shutoffs."Certainly it has hurt the reputation of the city," Duggan said. "I have been anxious to do something about it for awhile and I am just glad I have a chance to do it,"Emergency Manager Kevyn Orr handed over the water department to the mayor and City Council TuesdayDuggan says better publicizing assitance programs is the biggest priority."I still don't think the people in need h...
  • Royal Oak fire crew forced to watch house burn waiting for DTE

    Royal Oak fire crew forced to watch house burn waiting for DTE

    Tuesday, July 29 2014 5:47 PM EDT2014-07-29 21:47:18 GMT
    Roberta Erxleben has lived in her house for 30 years and says her garage would not have been destroyed Sunday had DTE responded to another electric fire sooner.
    Roberta Erxleben has lived in her house for 30 years and says her garage would not have been destroyed Sunday had DTE responded to another electric fire sooner.
  • Michigan girl mauled by racoon receives wave of support

    Michigan girl mauled by racoon receives wave of support

    Tuesday, July 29 2014 5:28 PM EDT2014-07-29 21:28:50 GMT
    She told us all she wanted was to wear earrings -- and now she's got a lot of options. We'll show you how Charlotte is healing after surgery to replace her ear... and how you've made a difference. Her story includes a tragic accident, but also a tremendous outpouring of support. The 12-year-old girl from western Michigan who was attacked by a raccoon, shows us how the generosity of others is helping her heal. "This is all the jewelry people sent me," she said. Dozens of pairs of earrings and ...
    She told us all she wanted was to wear earrings -- and now she's got a lot of options. We'll show you how Charlotte is healing after surgery to replace her ear... and how you've made a difference. Her story includes a tragic accident, but also a tremendous outpouring of support. The 12-year-old girl from western Michigan who was attacked by a raccoon, shows us how the generosity of others is helping her heal. "This is all the jewelry people sent me," she said. Dozens of pairs of earrings and ...
Powered by WorldNow
Didn't find what you were looking for?
All content © Copyright 2000 - 2014 Fox Television Stations, Inc. and Worldnow. All Rights Reserved.
Privacy Policy | Terms of Service | Ad Choices