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Detroit's bankruptcy may lead to more chaos

Some hope bankruptcy will get Detroit on the road to recovery. But the city remains broken, and its public employees now worry for their future.

July 19, 2013|By Alana Semuels
  • Downtown Detroit in 2008. Five years later, the city is seeking bankruptcy protection, and its problems have only gotten worse.
Downtown Detroit in 2008. Five years later, the city is seeking bankruptcy… (Carlos Osorio, Associated…)

DETROIT — Jose Covarrubias has tried to keep his small house on a semi-deserted street in southwest Detroit a bastion of calm, but it has gotten more difficult every day.

He installed a chain-link fence with a lock to prevent wandering vagrants from using his yard as a short cut; someone kicked it down. He threatened to call the police on a stranger who showed up with a ladder and tried to steal his antenna; the thief laughed in his face, reminding him that police rarely have time to respond to calls that don't involve dead bodies.

He woke up Sunday to what's become a typical scene in Detroit these days — arsonists had set the house on the corner on fire, and it burned a bright, hot yellow.

"We laugh and say, 'It's Detroit' — but it's hard," he said, standing outside his house, which, with its pots of flowers and coat of fresh paint, stands out on a block of boarded-up and burned-out homes. "The cops don't come, and you can't leave your house without thinking someone will steal something."

For many in Detroit, Thursday's bankruptcy filing raises questions about whether things could now get even worse — or whether a court-ordered financial overhaul in what was once America's fourth-largest city could finally reverse the city's long decline.

A Michigan judge ruled Friday that the bankruptcy violated the state constitution and ordered the city to withdraw its petition, a decision that was immediately appealed by the state attorney general.

City unions expressed dismay at the bankruptcy, accusing the city's emergency manager, Kevyn Orr, of rushing to file before negotiations over pension liabilities were completed. The White House weighed in, with Press Secretary Jay Carney saying Detroit's bankruptcy would be worked out between the city's leaders and creditors, but that the federal government would look for ways to help.

"We're paying close attention to the challenges that Detroit is facing," he said.

The bankruptcy filing is especially stressful for city employees, who are waiting to hear whether the city could take away their pensions. Police officers and firefighters do not pay into Social Security, so if the city seizes their pensions in bankruptcy, many say they'd be left with little money for retirement.

Even without the bankruptcy filing, public employees are stretched thin. Detroit has the highest rate of violent crime of any city with more than 200,000 people. The average police response time was 58 minutes this year, compared with an average of 11 minutes nationally. The city has about 11,000 fires a year, though the Fire Department "lacks equipment ordinarily regarded as standard," according to the city's proposal for creditors, released in June.

"See that one? The nozzle doesn't spray water," said fireman Thomas Kaiser, pointing to one of the two fire engines in the firehouse in the southwest district where he works. There's no money to fix the truck. In fact, money is so short that many onetime officers in the Fire Department have been demoted and had their pay cut, as less senior firemen lose their jobs.

"We're the busiest fire department in the world, but when was the last time we had a raise? Twelve years?" Kaiser asks. "We risk our lives and they're changing the rules halfway through."

He'd already been out on two calls in the first five hours of his 24-hour shift. In many city fire departments, firefighters are sent home after two calls. The city, which measures 139 square miles, is so spread out that this ladder company once traveled 30 minutes to get to a fire.

It is not even the shortest-staffed emergency department in the city. The firefighters hear calls come in over the scanner, begging for ambulances for people passed out on the street, or for car crashes on the freeway, only to hear in response that there are no paramedic services available. In the first quarter of the year, only 10 to 14 of the city's 36 ambulances were in service.

"You hear it all the time," said Denny Dooley, another fireman.

The slow response times and high crime rates have escalated Detroit's troubles. More and more families have fled the city, eroding property tax revenues and leaving more homes empty to be either stripped for parts or set on fire. About 40% of the city's streetlights do not work. There are 78,000 vacant structures in a city whose population is about 687,000.

Kaiser moved his family out of Detroit because he said it got too dangerous for his children to walk around the block by themselves. He used to mow his lawn with a gun strapped to his belt. Dooley still lives in Detroit, but says that in the winter, when darkness falls early, he goes between his house and his car with a hunting rifle.

"There's trouble everywhere," he said.

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