Detroit is emerging from the largest municipal bankruptcy in US history, according to remarks made by Governor Rick Snyder today. As part of the exit plan the city will be returned to the Mayor and local city council, and emergency manager Kevin Orr will resign.
As part of the approved exit plan, a commission of state officials will closely watch the finances of Detroit and conduct regular audits of spending and city services. That commission is already holding meetings.
How cities work through municipal bankruptcy is critical as one exit plan can be the model for another town. Court rulings in theses cases are also important and have implications for other municipalities faced with bankruptcy. Recent court proceedings in California cited Judge Rhodes opinions on Detroit. In his final statements on the Detroit case he urged the city to ensure that city services continue without the significant erosion in reliability seen at the start of the bankruptcy process.
CivSource reported on the bankruptcy at the time, including its implications for local democracy as the emergency manager role removes power from locally elected officials for an unspecified period of time. In all, retired municipal workers and other public pension holders faced some of the deepest cuts including a 4.5% cut in monthly payouts and an end to cost of living increases. Other municipal assets like the city’s art collection were saved.
