Detroit Emergency Manager Kevyn Orr discusses bankruptcy, public service

During the address hosted by the Ford School of Public Policy and titled “The Future of Detroit Urban Governance,” Orr spoke of his intentions to propose financial measures that would address blighted neighborhoods and insufficient public services.

Orr, who graduated from the University with a bachelor’s degree in political science in 1979 and a law degree in 1983, said unlike his prior experience representing Chrysler and other large corporations in bankruptcy filings, developing a plan to restructure Detroit also required improving the city’s level of services.

In chronological fashion, Orr explained how he first became involved with the city of Detroit. He said while he initially felt he should turn down the job after being offered the position, a commitment to service motivated him to take the job.

“Are you willing to step outside your comfort zone and do something for service?” Orr recalled asking himself. He credited the former University President James Angell’s description of the University’s goal of offering “uncommon education for the common man” for teaching him the philosophy of service during his time as a student.

Detroit’s bankruptcy placed pension payouts to thousands of retired city workers in jeopardy. Because the bankruptcy process has included negotiations between the city’s creditors and labor leaders, Orr said the two entities need to reach an agreement regarding the extent to which pension obligations must be repaid.

“I don’t want to (cut pensions), but I’m making the hard call, that’s my job,” Orr said.

“Reaching a consensual resolution (with creditors) and getting (a retired city worker) to understand they have to give up expectations, particularly those in the twilight of life, is a difficult call.”

Though Orr’s presentation was punctuated by statistics that confirmed the difficulties Detroit would face in restructuring, his speech focused on how he helped assess the challenges facing the city by releasing a transparent report on its finances. He also outlined some of the initiatives Detroit Mayor Mike Duggan’s administration would implement over the next few months to balance the city’s finances.

A portion of Orr’s speech was dedicated to lauding several Detroit area foundations, such as the Kresge Foundation and Kellogg Foundation, which had jointly donated $330 million to protect the Detroit Institute of Arts. Those funds, combined with contributions from DIA donors, will assist the city in fulfilling most of its commitments to pensioners, thus preventing the sell-off of DIA art to pay its bills.

Orr credited the foundations as the reason that art from the DIA has not been sold to private investors. The deal is pending approval by a federal bankruptcy judge later this year.

“Foundation leaders said this is a particular time in the foundation of America and we need to stand up because otherwise there will be a yard sale in the DIA yard,” Orr noted. “If you don’t think that can happen, there are many sovereign, wealthy, Russian oligarchs, Brazilian millionaires who are calling and inquiring.”

Marieke Van Damme, LSA museum project manager, who attended the talk, criticized Orr for neglecting to mention arts as an asset to Detroit’s future.

“It was hard to hear him not mention arts and culture to revitalize the arts at all, and instead hear him say that he was going to have a yard sale,” Damme said “He had an incredible opportunity in this presentation to sell Detroit on its history of art and culture, I think creating more sports stadiums is not the way to empower a city.”

Rackham student Kumar Raj, an event volunteer, said he appreciated the opportunity to hear firsthand what was happening in Detroit, especially as a student who hoped to live in the city after graduation.

“I think you learn a lot of the academic side, and it’s nice to have a practitioner come and speak to all of us on a topic as important as Detroit,” he said.