That same city filed for Chapter 9 bankruptcy protection Thursday, July 18.
USA Today reported that Detroit Emergency Manager Kevyn Orr released a plan last month to restructure the cash-strapped city’s debt and obligations that would leave many creditors with much less than they are owed. The petition for bankruptcy seeks protection from creditors and unions who are renegotiating an estimated $18.5 billion in debt and other liabilities.
If accepted by a federal bankruptcy judge, Chapter 9 will force creditors to negotiate with Detroit for partial settlements, maybe just pennies on the dollar.
The PCUSA, headquartered in Louisville, Ky., chose Detroit and the Cobo Center in 2008 to host its GA meeting June 14-21, 2014. The 222nd GA in 2016 will be in Portland, Ore., June 18-25, and the 223rd gathering is scheduled for June 16-23, 2018, in St. Louis, Mo., according to the PCUSA’s Office of the General Assembly (OGA) web site.
On Friday, July 19, the OGA declared that preparations for the 221st General Assembly continue with confidence even after the bankruptcy announcement by Detroit. A statement posted on the web site declared faith in Detroit’s people, congregations and presbytery to host the meeting.
The Cobo Center is not owned by the city, so it is not part of the bankruptcy filing.
“I believe that when the assembly chose Detroit in 2008, the Spirit was guiding us toward a unique opportunity to witness and to be witnessed to,” Hay said. “By our presence in Detroit we stand with people who are creatively working to bring forth a new city in a difficult time and can learn from their energy and imagination. By our presence in Detroit we refuse to give up on a people and a city that refuses to give up on itself.”
The Rev. Gradye Parsons, stated clerk of the General Assembly, shared a similar show of the PCUSA’s solidarity with the impoverished in regard to the potential impact the bankruptcy could have on the city and its residents.
“We hope that the bankruptcy will be carried through with justice and not create greater suffering on families that are already struggling,” Parsons said.
Detroit, with a population estimated to be around 705,000 people (2011 statistics), is the largest U.S. city ever to file for bankruptcy, surpassing the municipal bankruptcy filings of Jefferson County, Ala., and Stockton, Calif.
The Motor City, known for its automobile industry, assembly lines and sweet Motown sounds, has seen manufacturing crumble, and nearly 30 percent of its 140 square miles is nothing more than vacant lots and abandoned buildings. Just one automaker – General Motors – still has its headquarters in Detroit.
Only a third of ambulance units are in use, 40 percent of the city’s street lights are dark, potholes on city streets are not repaired, and the unemployment rate hovers around 16 percent – twice the national rate.
Police response to emergency calls averages about an hour, part of the reason the city has one of the highest crime rates in the country. There were 411 homicides in 2012, the highest number in two decades, leading to a rate higher than the level 40 years ago when the city was known as the Murder Capital.
Detroit’s woes can be traced to a dwindling population and substantial loss in tax revenues along with decades of financial mismanagement.
The city’s population rose to 1.8 million in the 1950s, but many of its middle-class residents and numerous businesses have fled, taking their tax dollars with them. From 2000-2010, Detroit lost a quarter-million residents.
While there is a distinct possibility that services like sanitation, transportation, police and fire protection could be affected by bankruptcy proceedings, Detroit City Council President Pro Tem Andre Spivey said that will not happen, at least not immediately.
“City services we provide will not be shut down,” Spivey said. “We’ll still be providing services, but the challenge is where we’re going to get to as we go through the bankruptcy process.”
A deal with creditors gives the city access to $11 million monthly in casino tax revenues that can be used to maintain services while negotiations take place with other creditors and unions.
Hay said the GA meeting in Detroit will provide much-needed financial assistance to the city, sources of income for people to support themselves and their families, all while providing opportunities to worship and pray with the congregations there seeking to be witnesses for Christ.
“I continue to be excited about Detroit,” Hay said. “Detroit Presbytery’s Committee on Local Arrangements (COLA) has been outstanding. And I think that Detroit has something important to say to us.”