| ABC News | - |
Detroit's
emergency manager, Kevyn Orr, filed a plan Friday for restructuring the
city's $18 billion debt as it begins to emerge from the largest
municipal bankruptcy in U.S.
A Look at the Effects of Detroit's Bankruptcy Plan
Detroit's emergency manager, Kevyn Orr, filed a plan Friday for
restructuring the city's $18 billion debt as it begins to emerge from
the largest municipal bankruptcy in U.S. history. A look at the plan's
effects on key people and places:
———
NEIGHBORHOODS: The plan calls for the city to spend $1.5 billion over 10
years to remove blighted properties, upgrade public-safety equipment
and technology and make other improvements. When the city filed for
bankruptcy in July, it reported having 78,000 abandoned and blighted
residential buildings — roughly 20 percent of the housing stock. The
number of problem properties continues to rise because of vacancy and
fires, and it contributes to crime, particularly arson. About 60 percent
of the roughly 12,000 fires in the city each year occur in those
buildings.
———
PENSIONERS: Detroit's police and fire retirees would receive at least 90
percent of their pensions after elimination of cost-of-living
allowances. General retirees would receive at least 70 percent of their
pensions.
———
CREDITORS: Unsecured creditors would take a big hit, receiving about 20 percent of their claims.
———
DETROIT INSTITUTE OF ARTS: Prized city-owned art would be saved from the
auction block. The city would transfer assets to a new corporation, to
be held in a charitable trust and kept within the city. In exchange,
Detroit would get millions to bolster its two underfunded pension plans,
one for police and firefighters, the other for general city workers. A
group of foundations with ties to the museum will raise $365 million for
the pension plans, and the DIA Corp. will commit to raising another
$100 million from donors. In addition, Gov. Rick Snyder is seeking $350
million from the state to add to the fund.
———
CITY WORKERS: Detroit continues to reduce the size of its government and
its spending on employees. More than 2,700 city jobs have been
eliminated since 2011, leaving the city with about 9,560 workers as of
last summer. The city announced this week that garbage pickup will be
privatized. Orr also has proposed turning the water and sewer department
over to a regional authority, but that has not been completely embraced
by suburban communities. Health benefits for employees also are being
cut back.
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