The Detroit city government is weeks away from running out of the cash it needs to operate, according to an initial report from the emergency manager overseeing its finances.
One of an estimated 78,000 vacant buildings in Detroit. Years of financial decline have left the city government insolvent, according to a report released Monday.
The report from Kevyn Orr, the bankruptcy attorney appointed by the state in March, lays out a bleak financial position for the city.
“The city has effectively exhausted its ability to borrow,” he writes in the report, adding that the city “is clearly insolvent.” To avoid running out of cash before the end of its fiscal year on June 30, it must “defer payments on its current obligations,” including more than $100 million in pension payments that are due.
“No one should underestimate the severity of the financial crisis,” Orr said in a statement. “The path Detroit has followed for more than 40 years is unsustainable and only a complete restructuring of the city’s finances and operations will allow Detroit to regain its footing.”
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