Deal keeps Orr during bankruptcy, restores council power

Christine Ferretti
The Detroit News

Detroit — City Council members unanimously approved a resolution Thursday that transfers power back to Detroit's elected leadership while keeping the emergency manager in place through the remainder of the city's bankruptcy.

The agreement, revealed late Thursday, comes following marathon closed-door talks over Kevyn Orr's next duties that spanned about 16 hours over three days.

The resolution means Orr will remain Detroit's emergency manager, but only for the bankruptcy. Orr will hand other responsibilities over to the elected leadership. His official removal will be effective once the city's debt-cutting bankruptcy plan is confirmed.

In a news conference after the vote, Mayor Mike Duggan said the move signifies a huge shift.

"As of tomorrow council will be approving contracts, council will be adopting ordinances and those powers will be restored," Duggan said, adding he will gain control over the city's police and finance departments. "The traditional powers will be fully restored."

Council President Brenda Jones added "we are ready to continue the business of this city, but none of us are bankruptcy lawyers."

"We know there is litigation that must continue," she said, in reference to the decision to keep Orr for now. "Kevyn Orr knows that proceeding better than anyone. We knew that Kevyn Orr would be the best person to do so."


Under Michigan's emergency manager law, the council was able to remove Orr from office as early as Saturday.

According to the law, after serving at least 18 months Orr may, by resolution, be removed by a two-thirds vote of the City Council and approval from Mayor Mike Duggan.

Bankruptcy Judge Steven Rhodes, once the bankruptcy trial concludes will make a decision to approve or not approve a plan of adjustment. If approved, Rhodes will set an effective date -- typically 30 to 60 days, Duggan said -- and that would be the day the plan of adjustment would take effect.

Council members are in a delicate position, given the political pressure to restore elected representation in Detroit while also proving to U.S. Bankruptcy Judge Steven Rhodes that they are committed to carrying out the city's bankruptcy exit plan.

Orr, Duggan, Detroit Corporation Counsel Melvin Hollowell and U.S. District Judge Gerald Rosen, lead mediator of the city's Chapter 9 bankruptcy case, also participated in the private discussions over the three days.

Duggan said he's watched the panel become "legal experts" over the past few days.

"You should feel good about the fact that we came out with the correct outcome," he said.

Meanwhile, a coalition of about 40 pastors advocating for Orr's removal have organized a Monday night rally at Hart Plaza.

The Rev. David Bullock, senior pastor of Greater St. Matthew's Baptist Church, said the group wants Orr to go and more clarity on the oversight called for under the act as he exits.

"We want Orr to go and the full restoration of democracy as well," said Bullock, who is also a spokesman for the Change Agent Consortium, a national coalition of faith, labor, civil rights organizations.

"I believe the mayor and City Council should be unequivocal about that. They should stand up and lead."

But second-term Councilman Andre Spivey said Orr will stay for now in the modified role to get through the bankruptcy.

The council is sensitive the concerns of the community, he added.

"They have every right to protest and we'll receive it," he said. "But we have to think about not just Detroit, but the region, the state and really the nation and world is watching what happens in Detroit."

Bullock claims keeping Orr in Detroit is "an insult" to voters. He noted multiple consultants the city has contracted with for its municipal bankruptcy case and restructuring.

"There are enough consultants on the city's payroll at this point," he said.

Gov. Rick Snyder made it known publicly late Tuesday that Orr should stick around until the city's Chapter 9 case is resolved.