Detroit bankruptcy leaders provide advice for city's future
There was a big stop on the Detroit post-bankruptcy "tour" this week.
Former Emergency Manager Kevyn Orr, now-retired federal bankruptcy judge Steven Rhodes, and Chief U.S. District Judge Gerald Rhodes all sat together at Crain's Newsmakers of the Year lunch to share their insights and hopes for the future.
Detroit News Business columnist Daniel Howes, who recently wrote about the lunch, says it's important to remember "there were a lot of other people who contributed to this rather monumental achievement, it wasn't just those guys."
Judge Rhodes revealed that the retirees' vote on pensions was the most nerve-racking part of the process, and Howes agrees. He says without the yes vote, the bankruptcy could still be in litigation.
According to Howes, Rhodes also raised the question of a missed opportunity, "that the city didn't use the bankruptcy to essentially freeze pensions in perpetuity and move over to a 401(k) style retirement for all their employees."
Eventually, the city will have to pay the pensions, and Howes says Rhodes expressed the need for the city to have discipline and make those payments without finding ways to get around them.
Detroit isn't the only city struggling to pay public pensions, and Howes says delaying payments is "a time bomb waiting to go off."