Orr Is Object of Desire for Detroit Council That Shunned Him

Kevyn Orr became Detroit’s emergency manager last year with power to overrule a city council that couldn’t wait to get rid of him. Now that they can, they may keep him a while longer.

As Detroit’s record $18 billion Chapter 9 bankruptcy trial heads home, the practical need for Orr to conclude it may trump elected leaders’ opposition to state control. The council may vote this week on a revised role for Orr, though Michigan law allows members to remove him entirely after he marks 18 months in office Sept. 27.

With five new members this year among nine, the council displays a more civil and cooperative tone, said former member Sheila Cockrel.

“This is a profoundly different council,” said Cockrel, who teaches about city politics at Wayne State University in Detroit. She pointed out that Mayor Mike Duggan and his staff attended a recent council retreat outside Detroit, a collegial meeting of the two government branches unheard of in the past 20 years.

“It was a huge statement,” Cockrel said.

The decision on Orr will reveal the council’s temperament and its relationship with Duggan, Detroit’s first white mayor since 1973, to whom Orr has given control over much of government of the city, which is 83 percent black.

Shouting Matches

The council had been a cauldron of parochial rivalries and flamboyant ineptness as Detroit lost population and piled up debt. It was famous for bickering, corruption, mismanagement and mistrust of the predominantly white suburbs and state.

During one infamous session in 2008, councilwoman Monica Conyers shouted at shaven-headed Kenneth Cockrel Jr. -- Sheila Cockrel’s stepson and former council colleague -- and called him Shrek, after the animated ogre. Conyers in 2010 was sentenced to 37 months in prison for bribery.

Recent events may have a soothing effect.

The council was put on a short leash after Orr was named emergency manager in March 2013 under a state law that gave him sweeping authority over Detroit’s finances and government. Orr can override council decisions, which are limited in scope.

Then, last November, seven of the nine council members were elected by districts for the first time in almost 100 years, a move meant to make them more accountable. Only two now are chosen by the entire city.

Crossing Lines

Duggan, a 56-year-old Democrat, was elected at the same time, vowing that he could guide the city better than an emergency manager. It was a measure of desperation that the majority-black city known for racial polarization elected the former hospital executive who had moved from a suburb in order to run.

Although Duggan had denounced Orr’s appointment, the two forged a close working relationship as Orr granted the mayor broad authority.

Orr’s office maintained control of city finances and the police department, hiring a new police chief.

Meanwhile, Duggan expanded demolition and rehabilitation of vacant homes, some resold through an online auction. About 200 overgrown parks were mowed, 20,000 street lights replaced and crews began hauling away 650 tons of illegally dumped refuse per week, according to Duggan’s office. Orr handed Duggan control of the water and sewer system, which is to be converted to a regional authority jointly run by the city and the suburbs.

Reasoned Deliberation

Orr’s retention, the first fully autonomous, major decision by the council while under state control, may be notable for its lack of drama.

Duggan, who must approve a council vote to oust Orr, has been negotiating with members and Republican Governor Rick Snyder, who appointed the emergency manager, for a transition plan from state control. The council met in private yesterday to discuss the matter.

Sheila Cockrel said that with the city in bankruptcy court, creating a new role for Orr is problematic under the 2012 state law that governs his appointment and powers. Still, the council must do what’s best for a city with a dwindling population and declining revenue base, Cockrel said.

“What happens when there’s no emergency manager to resolve some of the more contentious issues?” Cockrel said. “There’s a real governance challenge ahead.”

Continued Control

Should the city emerge from bankruptcy under the plan Orr presented to the court, Detroit’s finances would remain under the watch of a state-appointed panel. It would be modeled after the board of control that guided New York’s finances after near-bankruptcy in the 1970s.

The city’s decision on Orr may test the state emergency-manager law, said Doug Bernstein, a lawyer at Bloomfield Hills, Michigan-based Plunkett Cooney PC, who represents foundations in the bankruptcy that have pledged money toward city pensions. The law doesn’t address the removal of an emergency manager by a municipality that has filed for bankruptcy.

Orr is too familiar with the intricacies of Detroit’s bankruptcy to be cut loose, he said.

“There’s probably nobody who has the complete background of everything going on like Kevyn has,” Bernstein said. “I wouldn’t expect, even if the council decides to vote him out, that he’s going to disappear from the process.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE