DETROIT, May 13 (UPI) — The city of Detroit is basically insolvent and has borrowed beyond its means, a report from Emergency Manager Kevyn Orr said.
Orr, who was appointed to take over the city’s finances under a state law meant to cover fiscal emergencies, did not use the world “bankrupt” in a 41-page report issued after his first 45 days on the job, The Detroit News reported Monday.
He did call the city “insolvent” however. He also said Detroit had “effectively exhausted its ability to borrow,” to pay off debts.
The report says Detroit paid $133 million in debt payments in 2012 on a budget of $1.23 billion.
The city is $15.6 billion in debt, including $5.7 billion in unfunded healthcare obligations owed to 28,500 city workers, including 10,000 current city employees and 18,500 retirees.
“No one should underestimate the severity of the financial crisis,” Orr said in a statement.
Mayor Dave Bing said he was reviewing the report, the Detroit Free Press reported.
“My initial review is that the assessment by Mr. Orr of the city’s financial condition is consistent with my administration’s findings,” Bing said in a statement.
Bing said he would respond further after giving the report a more thorough review.
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