Detroit CFO says post-bankruptcy oversight critical for city
CHICAGO, April 23
CHICAGO, April 23 (Reuters) - Detroit's future once it exits the biggest municipal bankruptcy in U.S. history will depend on oversight, the city's chief financial officer said on Wednesday.
"I believe the post-bankruptcy structure is absolutely critical and that right now is a big question mark," John Hill told a conference sponsored by the Federal Reserve Bank of Chicago and the Civic Federation, a Chicago-based government finance watchdog group.
U.S. Bankruptcy Judge Steven Rhodes, who is overseeing Detroit's case, recently raised the idea of a court-appointed monitor. Michigan Governor Rick Snyder, a Republican, has mentioned the possibility of a control board similar to one used for New York City's fiscal crisis in the 1970s.
While Kevyn Orr, the city's state-appointed emergency manager who took Detroit to bankruptcy court, is expected to leave his position in September, Hill said the state has the option of replacing him if necessary.
Hill, who was appointed CFO last November, said it was important for the city's elected officials to participate in reforms. They will be responsible for executing the debt adjustment plan once it wins court approval and the emergency manager departs.
Hill also said the city's broken financial systems must get fixed to maximize revenue collection.
"There has to be a point of view and vision how this organization should operate and everything has to line up with that vision," he said.
"No one wants to get out of bankruptcy and get back in there. So sustainability is a key element," Hill told reporters after addressing the conference.
Detroit faces a Friday deadline to submit its fourth revision of a key supporting document for the debt restructuring plan. Rhodes has scheduled a Monday hearing on final approval of that document, which details the financial woes that led the city to bankruptcy in July 2013 and how creditors, including retirees and bondholders, would fare under the plan.
One big uncertainty has been the future of Detroit's water and sewer department. Rhodes last week revived the idea of a regional authority despite the fact that talks between Detroit and its three nearby counties had broken down.
Hill said there were other options for water and sewer services such as privatization and that a final decision would be made before Orr leaves.
Hill, a certified public accountant, headed Washington D.C.'s Federal City Council from 2004 to 2012. He previously served as executive director of that city's Financial Control Board, which was created by Congress in 1994 to take over the U.S. capital city's finances and budget. (Reporting By Karen Pierog; Editing by Tom Brown)
- First Ebola case diagnosed in the United States: CDC |
- Advanced iOS virus targeting Hong Kong protestors -security firm
- Traveler from Liberia is first Ebola patient diagnosed in U.S. |
- Hong Kong democracy protesters and officials mark uneasy National Day |
- Mayor of Los Angeles suburb of Bell Gardens shot dead