Emergency Manager Files Report On Detroit Finances
DETROIT (WWJ/AP) – Emergency manager Kevyn Orr has formally filed his first report on Detroit’s finances with the state Treasurer’s office.
Orr’s spokesman Bill Nowling said the Financial and Operating Plan was due Monday under Michigan’s new emergency manager law.
Orr, who was hired by the state in March to oversee Detroit’s finances, had 45 days from when the new law went into effect to submit his report.
The report says Detroit’s net cash position was negative $162 million as of April 26 and that the projected budget deficit is expected to reach $386 million in less than two months.
Mayor Dave Bing said in a statement that Orr’s findings are consistent with what his administration has found. He said complete and comprehensive evaluation of Orr’s report is planned over the next day, and the mayor is reserving further comment until that time.
The summation is the latest blow to the city which came under state oversight in March when Gov. Rick Snyder selected Orr to handle Detroit’s finances. Then, the city estimated its budget deficit to be about $327 million. Detroit also has struggled over the past year with cash flow, relying on bond money held by the state to pay some of its bills.
But Orr reports that Detroit’s net cash position was negative $162 million as of April 26 and that the projected budget deficit is expected to reach $386 million in less than two months.
He also warns that the city’s financial health might change as more data is collected and analyzed, adding that the city’s fiscal health could further deteriorate if changes aren’t made.
Gov. Rick Snyder said the report presents huge challenges.
He it’s too early to tell if bankruptcy will be needed. For now, he plans to stay out of Orr’s way.
“I’m going to play my role, so I really leave it back to Kevyn Orr, the emergency manager, to continue his assessment and make those determinations,” Snyder said. “And a large part depends on the interaction: how the creditors come to the table, how people come to the table to try to work through it.”
“The preference is to avoid something like that,” Snyder added.
Snyder says the biggest issues that need to be solved are Detroit’s big deficit, and finding ways to get better police protection in the city.
Orr was expected to address reporters later in the day. Stay with WWJ and CBSDetroit.com for the latest.
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