EM Kevyn Orr issues 1st report on Detroit to Gov. Snyder
Updated On: May 12 2013 11:40:38 PM EDT
Detroit's emergency manager, Kevyn Orr, has released his first report on the city to Gov. Rick Snyder.
The report was required 45 days into Orr's tenure to inform the governor of just how serious the city's financial problems are, and which areas need attention first.
Report's objectives, Detroit's financial condition
The objectives of the financial and operating plan are to ensure that Detroit is able to provide or procure governmental services for the public health, safety and welfare of its citizens, and the long-term fiscal accountability and stability of Detroit.
Excluding proceeds from debt issuances, the report says the city's expenditures have exceeded revenues from fiscal year 2008 to fiscal year 2012 by an average of $100 million annually.
The accumulated unrestricted deficit was $326.6 million at the end of fiscal year 2012. Fiscal year 2013, which ends June 30, 2013, is currently projected to add approximately $60 million to the accumulated unrestricted deficit balance, excluding the impact of the $137 million debt issuance.
According to the report, short and long-term obligations total at least $15 billion. The city's credit ratings, according to Orr's report, are in "junk" status.
Public health, safety remains a top priority
Public health and safety has remained a top priority of Orr's. In his report, improving the quality of life of Detroit resident is "essential to any stabilization and revitalization of the City."
Comprehensive reviews and restructuring plans for Detroit police and for the Fire and EMS Departments are ongoing and according to the report, will be implemented as part of the restructuring. The report says Detroit will soon hire a new Police Chief.
Similar reviews of the Transportation and Recreation departments are ongoing, and resulting recommendations will be part of the restructuring plan.
Public lighting, blight among city's problems
In his report, Orr says a plan to transition the Public Lighting Department's lighting responsibilities to a new authority and its power services to a third party are in process and will be part of the restructuring plan.
Blight is one of Detroit's most pervasive and pressing problems. According to the report, in its 139 square miles, Detroit includes at least 60,000 parcels of vacant land (constituting approximately 15 percent of all parcels in the City) and approximately 78,000 vacant structures, of which 38,000 are estimated to be in potentially dangerous condition.
Addressing these issues, according to the report, requires increased collaboration across jurisdictions, including the State of Michigan, Wayne County, the City of Detroit, Detroit Public Schools, Detroit Housing Commission and non-governmental and community-based agencies.
Other key issues, considerations in Orr's report
Orr is currently evaluating Detroit's assets to determine the most advantageous course of action to preserve or maximize the value of such assets for the long-term benefit of the city.
According to the report, Detroit is in the process of performing in-depth department reviews to evaluate and improve efficiency and productivity and reduce redundancy.
Some labor initiatives that Orr addresses in his plan to the government include a bargaining unit overview or CBA consolidation, medical benefits reform, pension reform and more.
Report's preliminary views on Detroit restructuring plan
In his report, enhancing public safety is the Emergency Manger's paramount concern. Addressing the city's liabilities, both short and long-term, are also vital to providing the city with a "strong" balance sheet, and the financial foundation to raise new capital, attract new public and private investors and make the necessary reinvestments in Detroit.
Additionally, the report says the city is examining the potential to consolidate operations, outsource or privatize functions and improve systems and procedures. This may require changes to the City's Charter and the City Code, according to the report.