Tagged: Detroit financial crisis

Detroit's emergency manager, Kevyn Orr, wants to account for assets held in the Detroit Institute of Arts, which has sparked fears that part of the collection could be sold in the future.

We've posted information here, and Michigan Radio's Sarah Cwiek will have an update for us later today.

Update 11:34 a.m.

The DIA just put out this statement on their Facebook page:

"The DIA strongly believes that the museum and the City hold the museum’s art collection in trust for the public. The DIA manages and cares for that collection according to exacting standards required by the public trust, our profession and the Operating Agreement with the City. According to those standards, the City cannot sell art to generate funds for any purpose other than to enhance the collection. We remain confident that the City and the emergency financial manager will continue to support the museum in its compliance with those standards, and together we will continue to preserve and protect the cultural heritage of Detroit."

9:19 a.m.

Detroit is in a big financial hole, and the man in charge of righting the ship wants to know what can be sold.

Mark Stryker and John Gallagher of the Detroit Free Press report that Detroit's emergency manager, Kevyn Orr, is considering whether the DIA's art collection, with a roughly estimated value of $14 billion, should be counted as assets that can be sold to pay debts:

Liquidating DIA art to pay down debt likely would be a monstrously complicated, controversial and contentious process never before tested on such as large scale and with no certain outcome. The DIA is unusual among major civic museums in that the city retains ownership of the building and collection while daily operations, including fund-raising, are overseen by a nonprofit institution.

Stryker and Gallagher report on the many hurdles facing such a sale, including ...

• restrictions on selling off city assets in municipal bankruptcy law,
• museum ethics and operating rules that forbid selling art,
• opposition from patrons who donated art,
• and major a public outcry against such a sale:

“There would be hue and cry the likes of which you’ve never heard,” said Ford Bell, president of the American Alliance of Museums in Washington, D.C. “The museum should be a rallying point for the rebirth of Detroit and not a source of funds.”

Orr spokesman Bill Nowling said there's no plan yet to sell any asset of the city, but he said all the city's assets must be accounted for.

Detroit emergency manager Kevyn Orr named former Cincinnati Police Chief James Craig as Detroit's new Chief of Police.

Michigan Radio's Sarah Hulett attended the press conference, where Orr announced that Craig will begin July 1, 2013:

The new police chief of Michigan's largest city says he's committed to reducing violence and making the Detroit Police Department a premier police agency.

This announcement followed the plan that Orr outlined in his 45-day report on Detroit's economic status. 

Detroit Mayor Dave Bing will not seek re-election.

Bing made that announcement after months of indecision. He frustrated reporters weeks ago when he pulled petitions for re-election, only to say he hadn't committed to running.

Then he called a press conference, and handed out pamphlets highlighting his successes in office.

Then he spoke for nearly 20 minutes about his achievements before announcing "that I have decided not to seek another term as mayor Detroit."

Bing said his political career might not be over.

It's a simple formula. Don't spend more than you make.

Charles Dickens' character "Mr. Micawber" expressed it this way in David Copperfield:

"Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery."

"Misery" describes the city of Detroit's problems over the last several years.

Detroit has been breaking Micawber's rule for some time. In his report released last night, Detroit Emergency Manager Kevyn Orr wrote this:

Excluding proceeds from debt issuances, the City's expenditures have exceeded revenues from fiscal year 2008 to fiscal year 2012 by an average of $100 million annually.

Here's a representation of Detroit spending more than it makes in graph form:

DETROIT (AP) - Detroit Mayor Dave Bing has taken a step toward seeking a second four-year term leading the city that now operates under a state financial manager.

Bing picked up petitions Thursday afternoon at the city clerk's office for a spot on the August primary ballot. The top two vote-getters advance to November's general election.

He's been silent for months on his re-election intentions as Detroit entered state oversight. Gov. Rick Snyder in March named bankruptcy attorney Kevyn Orr as Detroit's emergency manager.

Bing says he's working closely with Orr, who must approve all financial decisions.

The 69-year-old Bing was elected mayor in May 2009 to complete the remaining months of disgraced ex-mayor Kwame Kilpatrick's second term. Voters re-elected elected Bing that November.

He inherited a budget deficit that now stands at $327 million.