AP Interview: Bing says bankruptcy ‘inevitable’
Nov 7, 2013, 9:49 PM
DETROIT (AP) – Outgoing Detroit Mayor Dave Bing says the once-thriving automotive capital of the world had no choice but to file for bankruptcy after it “hit bottom,” buried by high pension and health care obligations and millions of dollars in bond debt.
But Bing told The Associated Press that while he anticipated the decision to make Detroit the largest city in U.S. history to seek bankruptcy protection, he remains convinced the state could have done more to help Detroit avoid it.
State-appointed emergency manager Kevyn Orr currently controls Detroit’s checkbook, and he led the city’s Chapter 9 petition over the summer. Although Bing has said he has tried to work with Orr for the best interests of the city, he said in the interview Wednesday that he still believes Gov. Rick Snyder had other options to help rather than tap the turnaround specialist to take over.
“All of us want the end game to be the same thing: a safe city, a vibrant city,” Bing said. “You get there with resources _ people and money. What Lansing has not done, in my opinion, is helped us with those resources. They’re starving us. That’s not to say give us a blank check, but there’s no way you can fix the problem without those two resources.”
Snyder’s office says the governor and legislators have found ways _ outside of a state bailout _ to help Detroit. These include provisions in a state law that continues the rate in which the city can collect taxes. That adds up to $164 million in annual savings, according to Snyder’s office. A dedicated $10 million also was steered to Detroit to help tear down vacant, blighted structures.
Bing, a former star guard with the Detroit Pistons and member of the professional basketball Hall of Fame, announced in May that he would not seek a second four-year term. In two months, he will be replaced by former Detroit Medical Center chief executive Mike Duggan, who won Tuesday’s election.
When Duggan takes over in January, he _ like Bing since Orr’s hiring in March _ will have no control over how Detroit spends or pays its bills. But Bing said the city Duggan leads will be far different than the one he worked to improve and that the worst _ at least fiscally _ is over.
“We’ve hit bottom,” Bing said. “I believe we are somewhere three to five years away from turning the city around. I do believe in the next 12 months, as we’re still under an emergency manager, we will see some improvements.”
Orr has said the city’s debt is at least $18 billion, which includes underfunded obligations of about $3.5 billion for pensions and $5.7 billion for retiree health coverage.
“Kevyn is taking direction from the governor. Both of them are neophytes as it relates to Detroit, its politics and its problems,” Bing said. “This is not a negative for Kevyn because he’s over his head. There’s too much for him to do. His skill set is bankruptcy, not running the city of Detroit. To try to take us through bankruptcy and run the city of Detroit, he cannot get that done.”
Orr spokesman Bill Nowling said “collaboration” between the mayor and emergency manager is key.
“It’s not about how … we got to the point of having an emergency manager,” Nowling said Thursday. “That decision has already been made. It’s not about titles and positions. It’s about where do we want to go in terms of restructuring the city.”
Bing was elected in May 2009 to finish the final few months of ex-mayor and convicted felon Kwame Kilpatrick’s second term. Bing was elected to a full term later that year. He inherited Detroit’s debt, a budget deficit topping $300 million, a bloated city administration, nearly 90,000 non-working streetlights, inefficient public bus system and other problems.
Some cuts, such as paring Detroit’s workforce from 14,000 to about 9,400, were “painful, but necessary” and saved close to $400 million in salary and benefits payments, Bing said.
Bing also was able to work with state officials on legislation for public lighting and regional transportation authorities. He appealed to businesses and foundations and came away with $8 million for 23 ambulances and 100 new police cruisers.
Close to 10,000 vacant houses have been demolished and Bing said he worked with General Motors to keep the automaker’s headquarters in Detroit.
A new, $60 million public safety headquarters opened this year, as did more neighborhood mini police stations under his watch.
“I hoped it had never come to that,” Bing said of Orr’s bankruptcy filing. “I understand numbers, and I understood there was no way for us … the kind of debt we had on our balance sheet … to get any relief on that without bankruptcy. It was inevitable.”
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