Skip to comments.Detroit to go bankrupt in less than a month
Posted on 11/21/2012 7:20:31 PM PST by Founding Father
The city of Detroit, facing a serious cash crisis, is set to go bankrupt by the end of this year and would put city workers on furlough unless it strikes a deal with the city council that would bring in $30 million before Dec. 14.
Detroit has been in financial turmoil for years, losing a quarter of its population in the past decade and facing a shrinking auto industry that has reduced tax revenues. The Detroit City Council gave the mayor the option to hire a financial advisor and in return receive $30 million by the end of the year.
But the Council on Tuesday voted 8-1 to delay the decision on the deal, which would pay the Miller Canfield Law Firm $300,000 to advise Mayor Dave Bing. The deal would have released $10 million in bond money on Tuesday and another $20 million in December.
The Council decided not to authorize the contract due to suspicions that Miller Canfield has conflicts of interests, since the firm handles other city business. The Council was also concerned that the firms contract may not be legal, since it was not prepared or approved of by the citys chief on-staff lawyer. Council members were also upset that Bing only presented them with one law firm, denying them options to choose from.
"The Councils rejection of the Miller Canfield contract means the city will not receive the first $10 million scheduled for release today, Bing said in a statement. As a result, it will be more difficult for the city to maintain its liquidity until the receipt of property tax revenues beginning in January. Todays vote is one more example of how City Council has stalled our efforts to bring financial stability to the city of Detroit."
Some blame the mayor for the denied funds, claiming that his limited options gave the Council no choice but to reject the proposal.
Why is Mayor Bing putting gthe citys finances at risk by marrying himself to one law firm? City Council President Charles Pugh told reporters.
If a deal cannot be struck within the upcoming weeks, then those who will suffer most are Detroits government employees. Bing plans to put city workers on furlough on Jan. 1 to save cash if fails to receive the much-needed money from the law contract. With a $30 million cash shortfall, the city would temporarily lay off thousands of workers to avoid bankruptcy. The only city workers who would be able to keep working are police officers, firefighters, EMS workers, or employees of departments that raise revenue for the city.
The City Council also rejected a proposed contract to overhaul the Detroit Water and Sewerage Department, proposing to cut 81 percent of its workforce in an attempt to save cash.
If we dont stop this, there will be nothing left of the city of Detroit, Michael Mulholland, secretary treasurer of the American Federation of State, Council and Municipal Employees Local 207, told the Detroit Free Press. With a city that has already lost much of its population due to declining jobs, cutting the workforce with furloughs and layoffs is only worsening the crisis. At the current rate, Detroit is set to hit a weekly cash flow of $4.1 million in mid-December and drop to negative $4.8 million at the end of the year.
Crystalline idiocy. Detroit has had Democratic mayors since 1962.
Please just let it die.
Please just let it die.
Detriot is a picture postcard of what happens when RATS are allowed free reign.
Coming next: California.
Dave Bing represents the only semblance of sanity in this God forsaken city. Charles Pugh, former newscaster, is a complete buffoon as are the rest of the Council Members. The best thing that could happen here is that they go broke and renegotiate all the city contracts and get people who actually want to work.
(That's Austrian for "self sticking it to the man")
You’ve got to be kidding me? They actually had the audacity to write that?
Detroit has ONLY had extreme liberal governance and policies to make it what it is today?
How could they seriously write that?
I mean, WTF?!?!?!
True insanity. Does anyone read that rag of a magazine? Why doesn’t someone make a youtube video calling out that absurdity.
Man we are living in 1984.
New word for the day.
“Yes, it’s always been a mystery to me that the media remains liberal despite their certain knowledge that liberalism breeds problems with attaining and maintaining economic prosperity.”
Power, not prosperity. Communism was never about prosperity.
Of course. Detroit is part of the plan for all of us. The left wants power, and they are perfectly fine with casting all of humanity in a pit of misery so they become the only option for any hope at all. For them to have power you have to lose all control over your life. No self-reliance or work ethic or morality to guide you. Only trust in them as they hold absolute power.
Their plan is working exactly as they intend. Romney and Bush got to share the blame for the last four years which were engineered by democrats.
They say, "The worse it is, the better it is," and "Never let a crisis go to waste." Their allies in the media warp reality and hide the truth while they play on the darkest human emotions such as envy, racism, hatred, and self-pity to turn the country against itself. They are planting a very dark, evil seed and the crop it produces will be very ugly for us all.
socialism in action
You’re absolutely right. How stupid of me. How could I forget that?
” Now they have a former NBA basketball player as mayor. “
Well, I think he also did...”fairly well” as a businessman, owner of steel companies. He certainly could have retired very well off years ago but he took this extremely tough job as a civic responsibility. I don’t think he can be classified as a loafer...
” I dont think he can be classified as a loafer...”
That was not my inference. But he, like his predecessors, has not been successful You can go 90 MPH in entirely the wrong direction. Liberalism does that to people.
"Liberal economic policies have destroyed more cities than nuclear weapons."
Detriot got what it deserved when they elected a hardcore Communist Party member as mayor, Coleman Young; kept electing a hardcore Communist as their Representative, John Conyers Jr., and kept electing Communist Party supporters (then DSA leaders) as the head of the City Council (Maryann Mahaffey and Erma Henderson), plus Jackie Vaugh, I believe a Cockrell was on it, Carl Levin, and other leftists.
As you sow, so shall ye reap.
Media will blame the GOP Governor in 3...2...1...
Let us not forget Kwame Kilpatrick. Purveyor of all things shady, criminal, and downright ghetto.