Kevyn Orr's Big List: 10 Things He's Doing To Save Detroit
Detroit Emergency Manager Kevyn Orr's extraordinary announcement Friday about how he plans to yank Detroit out of its death spiral was complex, daunting and extensive in its facts, figures, spread sheets and tables. Deadline Detroit breaks down Orr's 134-page plan into digestible bits:
Suspend bond repayments: Unsecured creditors, including many bondholders who invested in the city’s general obligation bonds, will see a huge reduction in payments, probably to less than 10 cents on the dollar. A $39-million bill due Friday went unpaid. Unsecured debt is debt with no dedicated revenue stream.
Improve services: Savings gained by cutting payments to retirees and bondholders will be invested in city services. Around $500 million will go into removing blight, plus $750 million into police, fire, EMS and streetlights.
Triage neighborhoods: Street lights will be fixed in populated areas only.
Lease Belle Isle: Orr will do exactly what the council refused to do earlier this year: Lease the park to the state, which promises upgrades. Savings: $6 million.
Spin Off Water and Sewerage Department: Orr wants to spin it off into a regional authority, taking "Detroit" out of the title. The city will still own the system, as it owns the DIA, Eastern Market and other entities that have been spun off. The department creates revenue that backs its own separate bond issues.
Rename the Water Department: The new name will be the Metropolitan Area Water and Sewer Authority -- MAWSA (rhymes with WOWSA).
Cut pensions: Big reductions are coming to accrued vested pension amounts for about 10,000 active city workers and roughly 8,000 retired city workers. The amount of cuts will be determined.
Change health care for city retirees and perhaps some current city workers: Their coverage mostly will be transitioned to health exchanges created under Obamacare and Medicare.
Make bankruptcy decision: Within 30 days, Orr says he will know if his restructuring plan is enough to keep Detroit from filing for bankruptcy. The odds are 50-50, he says.
Develop the details: Much of Orr's plan has yet to be finalized, such as the amount of the hit city employee pensions will take. The devil is in the details.