Who will take on job of fixing Detroit’s finances?
DETROIT — It appears the appointment of an emergency manager to take over Detroit’s failing finances is all but a done deal. But one question remains: Who will get the difficult, thankless job?
Gov. Rick Snyder is being coy about his selection, saying only the person is “top notch.” Michigan’s Emergency Loan Board will do the official hiring of the candidate, who will provide state oversight on spending and restructuring.
Whoever is chosen, he or she will not only have to tackle the city’s massive deficits and debt but also succeed in pulling Detroit out of a tailspin so steep that it’s had to borrow millions of dollars just to pay its bills and city workers’ salaries.
“This will take somebody who has very deep and strong financial expertise and very deep and strong political and personal capabilities,” said Timothy Horner, a partner in the Warner Norcross & Judd law firm. Horner, whose firm has been closely following Detroit’s struggles because it represents businesses and creditors, said Friday that the emergency manager job is “a very difficult assignment.”
An appointment is unlikely to occur before Detroit Mayor Dave Bing has a chance to appeal Snyder’s determination Friday that the city is in a financial emergency. The 10-day appeal period will be followed by a March 12 hearing. It’s then that Snyder can change his mind or reaffirm his position and move forward with an appointment.
Bing said Friday that he doesn’t agree and that he is looking into the city’s options.
Emergency managers have the power under state law to develop fi- nancial plans, renegotiate labor contracts, revise and approve budgets to help control spending, sell off city assets not restricted by charter and suspend the salaries of elected officials.
Given the makeup of Detroit — more than 80 percent of the 700,000 residents are black — the emergency manager’s job would be easier if that person is black, according to Bill Brandt, chief executive of Development Specialists, Inc., a national turnaround firm.
“If he’s even toying with the idea of putting a white fella in charge in a city that’s 80 percent black it will be seen as more of this plantation mentality,” Brandt said.
Among the issues needing immediate attention is Detroit’s massive health care costs.
Detroit’s sinking population and tax base will have to fund its legacy liabilities, Horner said.
“Over many years, the city made many promises to employees and workers and incurred debt based upon a city that was much larger,” he said.
Horner also pointed out the manager would need to have experience with bankruptcies.
“If the emergency manager is not able to restructure, we will end up with Chapter 9,” he said.