- Posted October 08, 2014
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Mayor says Detroit can succeed under bankruptcy plan
DETROIT (AP) - Detroit Mayor Mike Duggan testified in federal court Monday that the city has a feasible strategy with the resources it needs to successfully emerge from bankruptcy protection but said that the plan is also contingent on the wider economy and other outside forces.
Duggan appeared before U.S. Bankruptcy Judge Steven Rhodes as lawyers representing Detroit wrapped up their case Monday with testimony from City Council President Brenda Jones. Rhodes still needs to hear from his own expert, and other witnesses could be summoned.
"I support this plan, and I believe it is feasible," Duggan said, though he warned of factors outside of the city's control.
"I can't predict a national recession," he said. "I can't predict a cut in state revenue sharing. I can't predict other casinos being approved," he said. Detroit gets a share of the taxes on the $1.35 billion in annual revenue from the city's three casinos.
"This is going to be tight, and it's not without risk," he continued.
Rhodes is seeking assurances that elected leaders will take the steps needed to get the city's operations back on track should he approve the plan to shed $7 billion in accumulated debt. The city's plan includes spending $1.7 billion over the next decade to improve police, fire and other services.
The bankruptcy plan was drafted by emergency manager Kevyn Orr, who was hired by state in March 2013 to fix Detroit's finances. That July, he made Detroit the largest U.S. city to file for bankruptcy. He's no longer directly running the city after Duggan and the Detroit City Council regained their authority last month.
Duggan said that not enough progress has been made in improving city services, a key to halting a continuing population drain. Detroit's population fell to an estimated 681,000 last year from a 1950 peak of 1.85 million.
In particular, the mayor cited a shortage of buses that prevents Detroit from meeting its posted schedules.
"We're probably at about 10 percent of where we need to be," Duggan said. "We're building in the right direction. It's going to be a multi-year process."
Jones was more upbeat about the current state of services.
"I'm satisfied and happy with the progression and level of services citizens are now seeing," the council president testified.
Published: Wed, Oct 08, 2014
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