Rod Meloni: There was never any doubt

Detroit files for Chapter 9 municipal bankruptcy, as expected


DETROIT – There is no victory in being right. On April 4, 2012, if you read this blog, you read that all roads lead to Chapter 9.

That was the day the City of Detroit's City Council voted to approve a consent agreement with the state to try and restructure itself to avoid bankruptcy. But a city government built on the old GM business model of defined benefit pensions and lifetime healthcare paid for by the company/government had no alternative.

I claim no special insight or genius. General Motors and Chrysler were dragged through "quick rinse" bankruptcy by the federal government in 2009 out of necessity. So, there was never any doubt the similarly constructed City of Detroit would end up there, too.

Now comes the tough part, rebuilding this city. It is not hyperbole to say there are some [but not all] neighborhoods in the city that could be called Hell on earth. There are 70,000 vacant homes, many totally scrapped, falling apart and havens for drug dealers and their customers. Talk with a homicide detective and they will tell you one of the preferred methods of murder in the city is to shoot someone in the basement of one of these old wooden hulks and then set it on fire.

The chances are likely no one will ever find the body under the rubble. Residents who might risk the danger of calling the police to report the activity usually wait more than an hour for a police scout car to arrive, if one arrives at all. Should you have a medical emergency good luck getting an emergency vehicle to respond, there is a distinct possibility that ambulance will break down on the way to the call and might never show up. So much for emergency services! Even more pathetic frankly is the fact that the residents of the City of Detroit pay the highest taxes in the state. So let's do the math on that. They are paying Somerset Collection prices for dollar store merchandise. This is wrong and is the world turned upside down.

Chapter 9 is the devastating wave of water that will begin the cleansing that is entirely necessary to pull this beleaguered city up from the ashes. We can assume there will be pitched battles by creditors, and in particular the city's unions and retirees. But the emotion is quickly draining from this swamp. A bankruptcy judge will calmly and coolly referee these negotiations.

Yes, that is what Chapter 9 really is; a very long and expensive series of negotiations that will clean Detroit's balance sheet once and for all. Gone now are the ridiculous kinds of rhetoric and threats we heard over the past couple of years like "we will burn this city down before we allow an emergency manager."

Well, the emergency manager just pulled the trigger on a Chapter 9 bankruptcy, one that was inevitable. Now comes the mop up. Let's hope that process is better and more effective than the last 60 years of declining city government.

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