Fears for the future after Detroit bankruptcy ruling

DETROIT — David Meadows is a 20-year veteran of the police force here, but Tuesday morning he was part of a crowd of more than 70 demonstrators circling the street in front of the federal courthouse, where a judge had just ruled that the city is eligible for Chapter 9 bankruptcy protection.

Many of those gathered toted placards or chanted in support of city employees, whose fears about the future were confirmed with the news. "Bail out people, not banks!'' read one sign, while another proclaimed, "Stop debt service to banks that destroyed Detroit.''

"Pension is all we got, and now they want to cut that," said Meadows, 42, after pointing out that neither police officers nor firefighters pay into Social Security.

In addition, he's worried about his mother, a retired Detroit bus driver with medical problems who is too young for Medicare.

Now that Detroit may enter bankruptcy, emergency manager Kevyn Orr is expected to present his plan to reorganize the city's finances by year's end. The so-called plan of adjustment will detail how to mitigate some $18 billion in debt, including what assets, if any, Orr intends to sell. Among the assets reportedly up for possible sale: the collection at the Detroit Institute of Arts and the municipal water system.

U.S. Bankruptcy Judge Steven Rhodes also opened the door to pension reductions, saying Detroit pensioners had only contractual rights to their benefits. He warned Orr, however, that such cuts would not be considered lightly.

Detroit Fire Department retiree Del Williams, who takes five medications daily after heart bypass surgery, is scared that out-of-pocket health care costs will increase, straining an already austere budget. "I'm thinking about getting a side job, but who in this economy is going to hire a 58-year-old?'' he said.

Tony Gilbert, a former DFD captain who retired in 1998, lost his downtown condo to foreclosure late last year, shortly before Orr was appointed Detroit's emergency manager and the prospect of bankruptcy was broached. Health-related expenses for both him and his wife have wiped them out, he said.

"Now this," he said of the ruling. "I'm struggling."

Al Buford, a mail clerk who works in the Coleman A. Young Municipal Center, said the ruling was a foregone conclusion. "They already got it mapped out the way they're going to do this," he said, smiling wanly while loading boxes of interoffice mail into a car trunk. "I'm very concerned, but no use losing sleep, I guess."

Alvin Coleman, who works in the city's Water and Sewerage Department, said he doesn't know what's going to happen but believes he'll at least keep his job. "Maybe the city can get back on track now, but I don't know. Nobody knows how bad it's going to get before it starts to get better."

Amru Meah has his own future in mind, and he doesn't like what he sees. The cancer survivor and former buildings and safety engineering employee fears deep pension and health care cuts. "Costs are rising everywhere. How am I going to pay my bills?" he said. "How am I going to make my mortgage payments?"

Meah, 57, retired in 2009 after 32 years on the job. His wife does not work. "When I retired, I determined what my income would be. And now ... I don't know how I will survive," he said, shaking his head. "Maybe I'll file for bankruptcy too."