Detroit retirees, workers want end to financial pain
Cuts inevitable because the city doesn’t have money to pay debts
— Detroit’s retired and current employees pleaded with the judge overseeing the city’s bankruptcy to limit the suffering they face from a plan that imposes $7.4 billion US in cuts on them and other creditors.
“I know that some sacrifices have to be made, but I never thought I would be struggling to get health care,” Jesse Florence, a retired city bus driver, told U.S. Bankruptcy Judge Steven Rhodes Tuesday in federal court in Detroit.
Florence’s health-care premiums jumped from $152 a month to $1,026, he told Rhodes. “This is devastating.” Rhodes is hearing from city creditors who aren’t represented by lawyers in Detroit’s record $18-billion bankruptcy. Most of the 17 people who spoke Tuesday morning were retirees or current workers. The hearing will continue Wednesday afternoon.
Active and retired city workers, as well as investors, would be forced to take less than the $10.4 billion they are owed if Rhodes approves Detroit’s plan after a trial set to begin next month. Some bondholders would recover as little as 11 per cent of their claims.
Some of the objectors expressed disbelief the city doesn’t have enough money to pay them. Others complained some pensioners, including police and firefighters, are getting a greater recovery than others.
One homeowner asked Rhodes to block the city from cutting off water to anyone who owed $150 in unpaid bills.
“It is up to you to stop the national and international disgrace,” Kristen Hamel said, drawing applause the audience.
Rhodes responded to some of the questions, asking the city to bring an expert familiar with the water shut-off policy and urging emergency manager Kevyn Orr to provide more information to individual pensioners about how the city calculated their cuts.
Attorney Heather Lennox responded on behalf of Orr to the comments, saying the “plan isn’t perfect. It certainly isn’t all that we wish it could be.”
Cuts are inevitable, Lennox said, because the city doesn’t have enough money to pay all its debts.