Detroit could oust emergency manager Orr this week

DETROIT — Discussions are intensifying over the removal of Kevyn Orr as Detroit's emergency manager before the end of the month, but city officials said Monday that he's likely to stay on in a role that maintains his authority over the city's bankruptcy case.

One of the final unresolved issues about Orr's departure is exactly what powers he would keep in his new role. A central question: If Detroit's bankruptcy judge were to order major changes to the city's plan to emerge from Chapter 9, would Orr have enough power to see those changes through without approval of the mayor and City Council?

"It's all technical issues like that," Councilman Andre Spivey said Monday as he and other council members and Mayor Mike Duggan prepared to hash out details on the transition of power back to local elected officials as the 18-month mark of Orr's tenure approaches.

The council will meet in a private session Tuesday afternoon to discuss its options for terminating Orr's term. The council has not yet reached a consensus. But some members say they are ready for Orr to go.

The council's second-ranking member, George Cushingberry Jr., said Monday he's been speaking with the city's top lawyer, Butch Hollowell, about possibly voting on Thursday to have Orr's reign as EM end on Sunday, but keeping him on as the city's bankruptcy lawyer with power to see the city through confirmation and to execute contracts spelled out in bankruptcy agreements.

"If we can get him to agree to that, then we've got a deal," Cushingberry said of Orr. "I want him out now. I'm canvassing to see if I've got the votes for it. It looks like Kevyn's willing to do that. But it's not clear if the governor is."

Officials were tight-lipped about the exact nature of a post-EM role for Orr, who's essentially had control over the city since he was first appointed by Gov. Rick Snyder in March 2013 as Detroit teetered on the brink of financial collapse and finally filed an $18 billion municipal bankruptcy, the largest U.S. city ever to do so.

Under the state's emergency manager law, two-thirds of the nine-member council must agree to terminate Orr and the mayor also must approve.

Even if Orr departs as EM and Duggan and the council gain full operational control over the city, Detroit's elected officials face years of state oversight.

Under terms of the bankruptcy grand bargain to ease pension cuts and spare the Detroit Institute of Arts from selling its assets, lawmakers required a state-appointed board be created to oversee Detroit's financial affairs for 13 years to prevent the city from backtracking post-bankruptcy. The board, similar to one that oversaw financial decisions in New York and Washington, D.C., after financial crises in those cities, will have significant say-so over contracts, spending and borrowing matters city leaders have traditionally decided.

Snyder spokeswoman Sara Wurfel said the governor is "focused on helping ensure the city can exit bankruptcy as smoothly as possible and quickly as possible."

"We are talking and working cooperatively with the city – both the mayor and council – to see how that can be best achieved on this matter," she said.

Orr spokesman Bill Nowling couldn't be reached for comment, but Orr has said numerous times that he expects his tenure here to end this month.

State oversight of Michigan's largest city has been one of the most thorny issues amid Detroit's financial free fall, with activists fighting the state's emergency manager law in federal court after an earlier version of the law was repealed by voters in 2012, only to be replaced quickly by the Legislature and Snyder with a version substantially similar.

Mayor Mike Duggan has made clear he and the council want to show Orr the door in terms of governing the city. But with Detroit perhaps just a few weeks from ending confirmation hearings on its plans to emerge from Chapter 9 protection, city officials say Orr has to stay on in some capacity to shepherd the city through the final stages of bankruptcy.

The notion: You don't fire your lawyer so late in the case, especially with Detroit having reached settlements with all but one major creditor.

Duggan spokesman John Roach said the mayor had no comment on ongoing discussions about Orr's role.

The City Council is preparing for a vote on the issue as early as Thursday, although council members disagreed about when the vote might take place.