DETROIT (AP) — A year after filing for bankruptcy, Detroit is building momentum to get out, especially after workers and retirees voted in favor of major pension changes just a few weeks before a judge holds a crucial trial that could end the largest public filing in U.S. history.
Pension cuts were approved in a landslide, according to results filed shortly before midnight Monday. The tally from 60 days of voting gives the city a boost as Judge Steven Rhodes determines whether Detroit's overall strategy to eliminate or reduce $18 billion in long-term debt is fair and feasible to all creditors. Trial starts Aug. 14.
"I want to thank city retirees and active employees who voted for casting aside the rhetoric and making an informed, positive decision about their future and the future of the city," said Kevyn Orr, the state-appointed emergency manager who has been handling Detroit's finances since March 2013.
General retirees would get a 4.5 percent pension cut and lose annual inflation adjustments. They accepted the changes with 73 percent of ballots in favor. Retired police officers and firefighters would lose only a portion of their annual cost-of-living raise. Eighty-two percent in that class voted "yes."
Voting ended July 11, and the counting was done by a private company.
Support for the pension changes triggers an extraordinary $816 million bailout from the state of Michigan, foundations and the Detroit Institute of Arts. The money would prevent the sale of city-owned art and avoid deeper pension cuts. The judge, however, still must agree.
In a statement Tuesday, Michigan Gov. Rick Snyder said the vote is recognition that the state has pulled together in support of the city. He noted that many people faced "difficult decisions" and said their sacrifices are appreciated.
"We have farther to go down this road," Snyder said. "But the vote tallies show how far we've come in the past year, and that Detroit's future is increasingly brighter."
Anthony Sabino, a bankruptcy expert who teaches business law at St. John's University in New York, said results of the voting are a big win for the city.
"It will pave the way for a confirmation hearing. Detroit will be able to move forward, not with absolute financial certainty but far more than Detroit has enjoyed in decades," he said.
Indeed, a Boston-based restructuring expert hired to advise the judge said Monday Detroit's overall bankruptcy plan is "feasible," a key standard at the upcoming trial. But Marti Kopacz warned that antiquated computer systems, a pledge to spend more than $1 billion to improve services after bankruptcy and a "cultural malady" among workers all will be challenges.
"There are ... employees who don't grasp that their job is to provide a service to the taxpayers versus the taxpayers owing them a job," Kopacz said in a report released Monday.
There are tens of thousands of creditors in Detroit's bankruptcy, from bond holders to businesses that provide soap, but much of the focus of the last year has been on the roughly 32,000 retirees and current and former workers banking on a pension. They have put a real and often anguished face on the process.
The judge set aside a day last week to hear the personal stories of retirees frightened about getting smaller checks.
The average annual pension for police and fire retirees is $32,000, while most other retired city workers get $19,000 to $20,000. Orr has said pension changes are unfortunate but necessary because two funds are underfunded by billions. If investment performance improves in the years ahead, he said, the cuts could be restored.
Many retiree organizations had urged a "yes" vote, insisting the pension changes were the best option under tough circumstances. But Dorothy Baker, 64, disagreed. Besides the pension cut, the library retiree who lives in suburban St. Clair Shores would lose a portion of her annuity earnings.
"Don't they sell assets in bankruptcy? They haven't sold any assets. There are parking garages and golf courses," said Baker, who worked for Detroit for nearly 39 years.
The Michigan Constitution says public pensions can't be cut, but Rhodes said in December that federal bankruptcy law trumps that shield. It was a groundbreaking opinion that could influence local governments across the country that go broke.
Michigan Attorney General Bill Schuette believes the judge is wrong, but he won't appeal now that retirees have voted for the cuts.
"I will respect their decision," Schuette said in a statement.
TWENTYNINE PALMS, Calif. (AP) — A recently discharged Marine who volunteered at a horse ranch with the missing pregnant wife of another California-based Marine has been arrested on suspicion of possession of a destructive device, authorities said Monday.
But authorities wouldn't say whether the cases of Christopher Brandon Lee, 24, and Erin Corwin, 20, are connected.
Lee, then a Marine corporal, was arrested July 4 after a search warrant was served at a home in Yucca Valley and then released on bail two days later, the San Bernardino Sheriff's Department said in a statement.
A day after that, he was honorably discharged after six years in the Marine Corps, the Desert Sun reported.
The arrest came about a week after the last time Erin Corwin was seen leaving her home apparently bound for Joshua Tree National Park while three months pregnant. Corwin disappeared under suspicious circumstances, authorities said. Two days later, her car was found outside the gate of the Marine Corps Air Ground Combat Center in Twentynine Palms, where her husband, Marine Cpl. Jonathan Corwin, is stationed. Both are from Oak Ridge, Tennessee.
Corwin and Lee both volunteered at the White Rock Horse Rescue Ranch in Yucca Valley, the Desert Sun reported.
Sheriff's spokeswoman Jodi Miller said Lee was arrested as a result of a search warrant in an ongoing investigation, but would not give more details, nor say any more about the destructive device Lee is suspected of possessing.
It was not immediately clear whether Lee had hired an attorney, and current contact information in his name could not be found.
He was in the Marines for seven years, last serving as a rifleman in the Individual Ready Reserve.
A number of people have been interviewed in Corwin's case, Miller said, but no person of interest or suspect has been named.
Several law enforcement agencies and hundreds of volunteers searched a broad swath of desert for Corwin, but there have been no reported sightings. The search was significantly scaled back last week, but it continues, officials said.
MARYVILLE, Tenn. (AP) — A Tennessee restaurant owner has placed a sign in the window of her business welcoming gun owners — a move she says has brought in more customers and saved her business from closing.
Shiloh Brew and Chew owner Sharma Floyd said she put up the sign after seeing a news account of a business being robbed after posting a sign saying guns were not allowed in the building.
The Maryville restaurant owner opted to go in the opposite direction. Floyd told WVLT-TV in Knoxville that "business exploded" and the response from customers was overwhelmingly positive.
Floyd said she doesn't want her sign to be a challenge to anyone. She's simply standing up for what she believes in.
"My parents always taught me that if you believe in something and you're passionate about it and you open your mouth up about it, you better be able to back it up," Floyd said. "And that's my stance on that."
The new business came after a rough winter when, Floyd said, expenses got to be too high, several pipes burst, and maintenance costs rising. It got to the point where Floyd said it was time to shut down her dream.
"I was really emotional when I told my workers," Floyd said.
Floyd is happy that people have responded positively to the sign. She's met new faces who have never stopped by to try her food, and several groups have told her they are planning to have dinner at her restaurant on Tuesday evening to show their support.
BAY MINETTE, Ala. (AP) — A Mobile County constable is in jail on a murder charge with bond set at $250,000.
District Judge Scott Taylor set the bond for 68-year-old Larry Sheffield of Semmes during a hearing Monday afternoon at the Baldwin County Courthouse in Bay Minette.
Sheffield was arrested early Sunday and charged with murder in the shooting death of 52-year-old Jeffrey McMillan outside a bar on the Mobile Causeway. Spanish Fort Police Chief David Edgar says the two men argued inside the bar and then it turned physical outside. He says the victim was shot once at close range.
Sheffield declined comment as he was being transported from the Spanish Fort Jail to the county jail. He was elected constable for the Semmes area in 2012.