Does anyone really think that the children are ready to be handed the keys?

If anyone can believe it, this has been kind of an important week for Detroit.

Most of us didn’t expect it would come to this point.

Seeing as how they pretty much broke the all rules to get here explains a lot on how that was really accomplished.

But nonetheless, a ceremonial milestone (albeit unofficial one) was passed.

Now for the all important question; Are the children ready to act responsibly and lead?

{More after the fold}

Just a few days ago, Detroit EM Kevyn Orr signed over most of his authority over running the City of Detroit to Detroit’s City Council & Mayor. Kevyn Orr still has duties relating the handling of the Detroit bankruptcy process which will end if after Judge Stephen Rhodes signs off on his proposed Plan of Adjustment.

As I mentioned above the fold, most people didn’t expect to see as much done at this point.

With about $20-billion in debt accumulated due to 50+ years of democratic party rule and the general mindset in Detroit promoted by the same democratic party rule that it was not only easier to sit on your behind and collect government benefits rather than work, but totally acceptable as well, things didn’t look so well in “The D”.

There was simply no way to get Detroit taxpayers to pay down this debt via higher taxes and/or fees without exasperating the exodus already underway.

And short of a full blown sell off of Detroit Owned assets (i.e. DIA, DWSD, Coleman Young Airport, 50% state in Detroit/Windsor Tunnel, Rackham Golf Course, Charles H. Wright Museum of African American History), there was no other way that Detroit was going go dig itself out of the hole it dug itself in. Granted the process this wouldn’t leave the city with much after all was said and done, but at least Detroit would have a clean balance sheet and most, if not all, of the Detroit’s financial obligations would be met.

The latter was the only responsible solution.

Or so we thought.

“This is foreign territory for everybody. The attorneys are in uncharted territory; the judges are in uncharted territory, if (a bankruptcy petition) ever gets filed,” said Douglas Bernstein from the Plunkett Clooney Law firm shortly before Detroit announced bankruptcy in USA Today.

“Uncharted territory”, talk about an understatement!

After Gov. Rick Snyder appointed Kevyn Orr as Detroit’s Emergency Manager under PA 72 (then PA 436), word begin to surface regarding little known, non-governmental groups running things behind the scenes, known as the “Skunk Works” and “N.E.R.D.” fund. The first purportedly interested in revamping the local school system in Detroit and the second, paying the bills for Kevyn Orr’s stay in Detroit, including among other things lodging and travel expenses.

Despite running on a platform of “transparency” if elected governor, Rick Snyder pulled out all of the stops in order to keep people from finding out exactly who is donating to these organizations. It even took repeated FOIA requests and a court challenge to get the Snyder Administration to even divulge the fact that close Snyder associate Rich Baird and Kevyn Orr were even paid out of the N.E.R.D. fund.

The governor claimed that he personally was unaware of whom had donated to his fund, but dissolved it shortly afterwards in order to prevent any further attempts to gain access to its donor lists.

This should’ve been the first red flag.

Why would anyone be interested in contributing towards a city that had brought bankruptcy upon itself by its own actions?

What was there to be gained?

Very rarely do people do something for nothing.

Altruism isn’t exactly a trait people around Detroit are known for. I can vouch from first-hand experience that it does exist, although not from those with deep-pockets.

We found out after Orr filed for bankruptcy and then submitted his plan for adjustment to Judge Stephen Rhodes what the game plan was going to be.

Labor contracts, especially pensions, were going to be effectively thrown out. Creditors were going to have their claims against Detroit paid for on pennies on the dollar. Detroit was going to borrow more money to try and rebuild basic services.

And city assets?

Well, it seems that some very well-connected people in Michigan didn’t take too kindly to the thought of city assets (read: DIA) being sold off to pay Detroit’s bills. So in order to generate some capitol for Kevyn Orr, republicans like Ron Weiser helped to organize a scheme with Gov. Snyder, Sen. Richardville and Rep. Bolger to get Michigan taxpayers to chip into the “Help Detroit retirees” kitty (originally $350-million, then $195-million). No, this wasn’t going to be a voluntary checkoff box on our tax returns. They were just going to take money from Michigan’s general fund in order to prevent a selloff of the DIA help Detroit become financially solvent again.

Other businesses and philanthropic groups would be shaken down for the rest of what was to be known as the “Grand Bargain”.

After passage of the “Grand Bargain”, some pensioners did get back more than those who worked in other areas of the city, but it was nowhere near what they were all originally promised.

Some creditors, those with deeper pockets than Michigan Taxpayers, weren’t going to go quietly into the night with just pennies on the dollar. Syncoria and FGIC pledged to fight this to the bitter end.

Well, then end came within the past week or so when Detroit agreed lease the Grand Circus Park Garage and Detroit-Windsor Tunnel to Syncoria and FGIC getting control of the rest of the city-owned garages and other incentives to be disclosed at a later date.

But, what of the Detroit Water and Sewer Department?

In another brilliantly executed plan by the governor’s people, Detroit will still own the Water Department but the operation will be overseen by a newly created regional water authority (which representation is tilted towards Detroit, BTW), that was just saw final approval in Macomb County on Thursday.

In exchange for $50-million from the suburbs for the next 40-years (not to mention an additional $4.5-million “payment assistance fund”) an oversight board will be created consisting of one representative from each county, two from Detroit and one by the governor. A five member “super-majority” will be needed for major decisions, meaning Detroit can effective veto anything that it doesn’t like. Rate hikes are supposedly capped at 4%, but language was inserted into the deal that made that cap conditional on revenues matching expenditures.

Which brings us to where we are at today and what we can expect in the near future.

Well, for one, the governor’s people have done an outstanding job of pulling the strings behind the scenes to get their desired outcome. Employees get thrown under the bus, Detroiters won’t have to pay for electing poor leadership and the rest of Michigan gets the bill for this mess.

And the future?

I’ll be covering that in an upcoming post.

Stay tuned…

You Betcha! (7)Nuh Uh.(1)

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