A year into Detroit’s bankruptcy, many residents still feel abandoned
In the year since this city filed for bankruptcy, becoming the largest municipality ever to do so, leaders have adopted a more optimistic tone about the future, pledging to fix streetlights and attract new residents and jobs.
But Eric Byrd isn’t buying it.
“No change round here yet,” said the 30-year-old, looking around his neighborhood on the west side of the city. Nearly every house on the block is abandoned, hollowed out by fire or vandals. Yards have been reclaimed by tall grass and wildflowers, and the roads are potholed and empty.
By all accounts, Detroit’s bankruptcy has been handled quickly and evenhandedly under the guidance of Judge Steven Rhodes. Already, the city has come up with a plan of adjustment and given retirees and employees the chance to vote on it; their ballots were due July 11.
It also has enlisted $816 million from private funds and the state to help limit cuts to city pensions and protect the Detroit Institute of Arts from a fire sale. The city even recently launched an initiative to recruit natives back to the city, inviting them to an event to experience the new Detroit.
Not everyone is impressed, though, especially current and past city employees, who have seen big changes to their health insurance and probably will see reductions in their pensions. Their anger was evident Tuesday, when Rhodes held a hearing to give some the opportunity to voice their objections to the bankruptcy.
“It’s more than a tough pill to swallow. It’s tantamount to eating an elephant in one bite. And I can’t do that,” said Beverly Holman, a city retiree, in her testimony.
Their complaints are fueled by fear and distrust: that the process through which retirees had to accept or reject the bankruptcy plan was rigged; that the city is shutting off water to residents unfairly; that retirees will be forced on the dole if the bankruptcy plan goes forward; that City Council members are getting a 5% raise while many retirees are struggling to pay the bills.
Perhaps the biggest objection was to this: The city says the pension funds overpaid into some retirees’ accounts and wants that money back. One man testified Tuesday that the city wanted $89,000 from him. Like all retirees in this situation, he has the option of paying it back in a lump sum or having his pension reduced.
In a room open to the public to watch the proceedings, a crowd of 50 or so retirees had gathered, many of them saying they feared they would lose their homes if the bankruptcy plan went forward. They applauded and whooped during the testimony of Holman and others. Applauding is about all they can do at this point because the votes are already in and the city has hinted that the retirees have approved the plan.
“My life is at stake because I can’t afford the insurance,” said Gisele Caver, another retiree, through tears after telling Rhodes that the cuts to her health plan have made it impossible to pay for the medicine she needs.
The plan needs approval from more than half of the members of each voting class. The results will be announced July 21; next month, Rhodes will hold a hearing about the plan and decide whether to accept it.
Still, some Detroiters are pledging to continue to fight the bankruptcy, no matter what happens in court. They say they’ll continue to protest with the group Moratorium Now!, although only a handful of people participated in an organized protest outside court Tuesday, a startling contrast to the days when hundreds of Detroiters marched to object to the bankruptcy.
“Worst comes to worst, I guess we’ll just be rioting in Detroit,” said William Davis, 57, a city retiree who was in court watching the hearing.
Some current employees suggest that the plan of adjustment, if approved, could have some negative consequences for the city’s future. Martin Andary is a firefighter on Detroit’s west side, where one of the engines can’t draft water quickly enough and another needs to be started every eight hours or it dies. He says colleagues are picking up and leaving Detroit or getting out of public service because they’re sick of seeing their pensions and salaries reduced.
“I do feel that it’s an attack on the working man,” he said of the plan, which he voted to reject.
Still, the bankruptcy plan is more generous than it was originally. It cuts the pensions of nonuniform retirees by 4.5%, and gets rid of a cost-of-living adjustment for police and fire retirees. The original plan proposed cuts of 34% to nonuniform retirees and 10% to police and firefighters.
And the bankruptcy has freed up money to spend on city services that otherwise would have been spent on debt, said Bill Nowling, a spokesman for the city’s emergency manager, Kevyn Orr.
On Friday, the city will mark a year since the bankruptcy filing. In that time, the city has hung or replaced 50,000 streetlights, Nowling said, and it privatized trash collection and added more recycling and bulk trash collection. Homicides are down 18%, and robberies are down 25%, he said.
“If you look at how bankruptcy transpires, it can seem far off to people in the neighborhoods,” he said. “But we’re actually doing things that people can see every day.”
Indeed, life is continuing in Detroit’s neighborhoods despite the testy exchanges in bankruptcy court.
A few blocks from the west side neighborhood where weeds grow around Eric Byrd’s home, a group of children played on the street, bouncing a basketball. A trio of teenagers in yellow shirts walked home from their jobs at a restaurant. And a group of contractors in yellow vests worked with shovels, digging up a sidewalk that the city had finally decided to fix.
Must-read stories from the L.A. Times
Get all the day's most vital news with our Today's Headlines newsletter, sent every weekday morning.
You may occasionally receive promotional content from the Los Angeles Times.