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.
Check the Detroit Public Library for the missing cash.
The commie lib ‘RATS did a great job with Detroit. I wonder how soon it’s going to be before the rest of America goes in the sewer.
You’d think someone in the media would notice the correlation, wouldn’tcha?
OK, what do you guys want to sell off. Send me a list and I’ll get back to you.
Yeah. Detroit. It's the Republicans' fault.
I thought it was bankrupt for years.
The “media” is next. The state controlled “media” is having a hard time staying afloat now. Wait until ObamaCare kicks in. LOL!
Gee, that’s a darn shame.
Actually I think much of America is a lot further down that sewer than we realize. Detroit hasn’t been propped up they way many American cities have been. Money has gone to Detroit but there’s been no pretense of doing anything for the city. The money has gone into a few pockets.
Cut the gravy train to Chicago and she’s gonna burn.
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.
Michael, enough of this financial stuff! Did you the watch Jerry Springer Show? Opera?
Wow - it sucks to be them.
Now go pay your taxes, Detroit is going to need a bailout. :)
“The commie lib RATS did a great job with Detroit. I wonder how soon its going to be before the rest of America goes in the sewer.”
Detroit has had “black leadership” since 1974. Coleman Young was the principal architect of the fall of Detroit. He was mayor for some twenty years! Now they have a former NBA basketball player as mayor. They’ve all pandered to the “Free Sh!t Folks,” and you can see where it has gotten them.
AFSCME ranks right up there with the SEIU in my book.
I wonder how they feel knowing that even the private sector unions voted against their attempted prop 2 power grab? LOL
+Detroit to go bankrupt in less than a month>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I thought it was liquidated already a couple decades ago. It certainly looks like that.
Couldn’t be. Obama saved Detroit.