Can Kevyn Orr Govern? Why Fixing A Budget And Fixing A City Are Two Different Things

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Nancy Kaffer’s Free Press column Wednesday, critical of Detroit Emergency Manager Kevyn Orr’s organizational skills, is like the canary in a coal mine, is a warning that things may not be getting better at city hall.

Detroit Free Press: Now, Bing has said that Orr has overstepped his charge — restructuring the city’s $18 billion in debt — by choosing a new police chief, hiring two highly paid appointees and firing some of Bing’s top executives, while Orr’s office has said that the state’s emergency manager law clearly places administration of the city in the EM’s hands.

It’s clear that U.S. Bankruptcy Judge Stephen Rhodes shares at least some of that concern. On Tuesday, a frustrated Rhodes gave Orr a hard 35-day timeline to craft a plan for handling the 500 outstanding lawsuits pending against city government. Rhodes said the testimony indicates Orr’s team haven’t “spent any time focusing on this very issue on what should the process be for liquidating these claims.”

Begging the question, if they haven’t been dealing with the city’ outstanding obligations to be restructured in bankruptcy court what are Orr, Chief Operating Officer Gary Brown, Chief Financial Officer Jim Bonsall, and the bevy of consultants and lawyers doing with their time?

The answer seems to be, based on Orr’s various public pronouncements, running the bankrupt city rather than untangling its finances.

And herein lies the fundamental flaw with Michigan’s emergency manager process: Fixing a city and fixing a city’s finances are two separate full-time jobs. Conflating them only assures that neither the city nor its finances will get fixed.

Left-wing fauxrage aside, emergency managers are necessary and proper. Under U.S. law, municipalities are not autonomous city-states. They are subordinate corporate agents of state government. When a municipality, such as Detroit, finds itself buried under debt and facing systemic structural deficits, state government has the right and the obligation to take corrective action through a legislatively-approve process.

Untangling the books is a challenging enough job on its own, and only made more difficult when the EM is also supposed to reorganize a government, hire/fire police chiefs and other top appointees, set policy, placate the needs of downtown developers, and improve city services.

Despite what Governor Opie wants us to believe, the emergency manager process isn’t “all about” creating a great city or relentless positive action or any of the rest of that claptrap. Not only does such rhetoric politicize what should be an apolitical, technocratic task, but these high-minded delusions of social uplift distract emergency managers from the primary, arguably sole, responsibility: Telling a municipality how much government it can afford going forward.

Orr’s job is to sort through the numbers. He needs to identify the city’s long-term debt, renegotiate down that debt with unions, Wall Street, et al, and basically let city leaders know how much discretionary and statutory spending it is allowed moving forward.

How Detroit chooses to operate, so long as it remains within the confines of their new fiscal reality, should be beyond Kevyn Orr’s purview. If residents really want improved police response times, they can elect leaders who will use the restructured public treasury to that end. If not, well, so be it.

And if the state truly can’t trust its municipalities to make prudent decisions inside the confines of a restructured budget, in essence, if cities can’t be trusted to govern themselves long-term, Lansing should simply pull charters and remake local government from scratch.

 

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