On Tuesday, Gov. Rick Snyder's administration moved forward with plans to convert Belle Isle into a state park and pump millions of dollars into repairing the island's ailing facilities. (David Coates / The Detroit News)
Three months into the largest municipal bankruptcy in American history and they still don't get it.
Take the latest deal to make Belle Isle a state park, reviving the same suspicions and hyperbole that scuttled it the first time and hastened the appointment of Emergency Manager Kevyn Orr. The predictable backlash from City Council again is proving an inconvenient truth about the melodrama enveloping everything from the island park to the city’s pension funds.
In a word: clueless.
Somehow the city can afford to spend $6 million a year to maintain a “jewel” tarnished by its own chronic neglect, even though it demonstrably cannot. Somehow city-owned treasures at the Detroit Institute of Arts can be insulated from the depredation of creditors and the pressure they can exert, but they probably cannot.
Somehow one of the city’s two pension funds should be free to once again issue “13th checks” to pensioners and active employees from surplus market gains, despite evidence from the city’s auditor general and others that the practice contributed to woefully depleting the fund’s assets and imperiling future solvency.
Wake up, folks. Detroit’s path out of bankruptcy requires making decisions to do less because the city has less. Wake up, pensioners. Any additional largesse funneled to you and yours in the form of bonus checks is cash that won’t be used to bolster the underfunded portion of your pension fund — the same fund intended to support thousands in old age.
The bankruptcy of Detroit, engineered by Orr and his team and backed by Gov. Rick Snyder, is moving ahead quickly with or without the dysfunctional culture that a) contributed to the collapse because it b) couldn’t make decisions or c) face reality as it is. No, the avatars of dysfunction are mostly stuck in neutral looking nostalgically in the rearview mirror.
The city whose automakers taught the world to go fast still is beset by too many leaders schooled in the high art of Detroit’s slow walk, a delaying tactic unable to change the arc of the city’s fiscal collapse. Or change its bureaucratic morass. Or change a political culture inured to the incompetence and self-dealing enabled by its inaction and grandstanding.
Instead, obstruct, complain and retrench: file lawsuits and allege conspiracy. Claim “disrespect” in a plan to improve a piece of prime real estate that the city will own but the state will pay to maintain. Petition U.S. Bankruptcy Judge Steven Rhodes to allow a union pension fund to take steps to resurrect the irresponsible policies blamed for undermining a pension fund intended to support 30,000 retirees and active employees.
Really? Now? As Team Orr and the pension funds are preparing to tangle in court over funding levels, how and whether the funds should take a haircut? Now is when the board of the city’s General Retirement System wants to cut 13th checks? Because, what, it demonstrates action (if short-sightedness) to actives and retirees?
The mind reels. All of it, and more — report after report detailing pension fund abuses, the pathetic state of equipment for police and fire, indefensible financial transactions exposing the city and its taxpayers to billions in additional liabilities — justify Detroit’s bankruptcy.
They also raise questions about what remains when the workout is done. Under Public Act 436, the state’s emergency manager law, Orr could be bounced less than a year from now by a two-thirds vote of the next council. He and his patron, the governor, fully expect council to exercise its prerogative to do so, leaving what, exactly?
A new council and a new mayor, each to be elected next month. A leaner balance sheet and more rationalized city services. An energized business and foundation community partnering with federal agencies in support of Detroit’s turnaround, arguably the toughest of its kind ever attempted this side of Katrina-ravaged New Orleans.
Mounting evidence suggests that Detroit is approaching a historic inflection point in its long, painful decline. Decades-old questions of efficiency and financial credibility are being called. Superfluous city functions are being privatized or exited altogether, easing the burden on a a shrunken tax base.
Blight is being targeted by a partnership that includes the feds and some of the region’s most influential business leaders and foundations. Decrepit equipment for police and fire is being upgraded or replaced. Public corruption, a cancer eating at the body politic, is being investigated and prosecuted.
In short, a lot more is moving in the right direction than not, including a long-overdue deal for state-supported maintenance of Belle Isle. Given the alternative we already know, why is that all so hard to understand?
Daniel Howes’ column runs Tuesdays, Thursdays and Friday.