This month marks 10 years since Detroit became the largest U.S. city to ever file for bankruptcy. Then-emergency manager Kevyn Orr guided Detroit in shedding $7 billion of debt.
But for some residents, there was a very personal cost.
Retired Detroit firefighter George Orzech chaired the Police and Fire Department pension plan at the time of the bankruptcy in 2013. Bankruptcy was just a word to Orzech until he opened an email at his office ordering him to go to Detroit Metro Airport.
The following interview has been edited for clarity.
George Orzech: I opened the email up and it said, “You’ve been identified as one of the decision-makers in the upcoming city of Detroit bankruptcy.” And the guys behind me go, “George, what bankruptcy?” Told ‘em I don’t know. Then it started. So we went to Metro airport. And my brother just happened to be working for the airport at the time. He called me up, “What the hell’s going on here? There’s state cops, there’s helicopters!” I said I don’t know, I’m going to a meeting.
And this door opens and two big bodyguards walk in and Kevyn Orr comes walking in. And he and I looked at each other, we shook hands. But in the picture that the newspaper got, because he was followed by press, by everything. We weren’t even allowed to have a cell phone. It was all a setup. We shook hands, didn’t even look at each other. We just looked in different directions, like two ships passing in the night. Few minutes later, we’re sitting in this room and he passes out this Plan for Creditors.
What caught my attention was that, effective July 1, there’ll be no more pensions paid to anybody. No more hospitalization for any retiree whatsoever. So I said, “What are you going to do about the non-Medicare eligible widows?” And he looked at the lawyers up and down the row, he goes, “We’ll figure it out. We’ll get back to you.” I said, “No, no, no. We’re gonna go lawyer up, and we will talk to you.”
From that day to January, when I left, it was just every day. It was either in court or with the mediator, the state of Michigan, Gov. Snyder and his little group of merry henchmen. It was just every day.
Quinn Klinefelter, WDET News: They cut police and fire pension cost of living increases. Did they realize they were leaving you with very little health care coverage?
We had to tell them that we don’t get Social Security. All the Detroit police and firemen are not eligible for Social Security. And up until 1987, they weren’t even eligible for Medicare. That’s why they had a hospitalization plan. And the pension system wasn’t a problem because we were almost 99% funded when this happened. That’s why that email sort of baffled me a little bit because we were almost 100% funded. They didn’t want to pay any pension. So after they realized there’s no social security they said, “Oh, well guess we got to pay him their pensions.”
And now we’ll make that seem miraculous. As a city lawyer said, that’s a miraculous result out of a bankruptcy. No, it’s not a miraculous result. You’re not eligible for Social Security. Some little payout ain’t gonna pay for anything. If it wasn’t for Obamacare, they wouldn’t have any kind of hospitalization, even though it was expensive. You would have wiped out everyone’s pension checks that they were getting. How are they going to pay for any kind of private hospitalization?
So they go, “We can’t let you get away with not taking any kind of a hit.” What are you talking about? I mean, I’ve been injured. I’ve had a lot of problems even after retirement. When I got hired in ‘77 I got blown out of a building looking for a babysitter, for God’s sakes. Couldn’t walk for 100 days. Who’s gonna pay for that?
You got guys that were retired captains on the job that are used to making $80,000 or $90,000. Now you get half of that.
You’ve said your wife had some small health coverage through her job, and that helped you. But other retirees had to go back to work?
It scared people because folks that had retired still had families. And that’s why guys are working. There’s a lot of guys in the fire department I knew that worked a second job forever. And it helps to pay the bills until you hit age 65, when you are eligible for Medicare. And a lot of police officers, they’re always searching for security jobs or other jobs that will pay for the hospitalization.
July 1, 2014, they started a brand new hybrid pension plan for everybody that’s on the job currently and that’s been hired. So now when these guys retire they get two parts to a pension. And it’s still not anywhere near what I would consider livable wages. You got guys that were retired captains on the job that are used to making $80,000 or $90,000. Now you get half of that, maybe 60% of that. So you’re going back to work, unless your wife works if you’re married.
You put in almost 40 years with the department. You had four brothers who were Detroit firefighters. Did it feel a bit like the city was betraying you after promising you pensions and health care after all those years?
If you take the emotion out of it like I had to survival kicks in. And when we were in the bankruptcy, and Judge Rosen and the other judges came up with this idea to give the city 10 years of no pension payments whatsoever. The moment the word “art” came up, oh man (Ed. note: the city faced the possibility of selling portions of the Detroit Institute of Arts lucrative collection to cover pension costs). I have an appraisal in my bankruptcy stuff of the DIA. And it was worth billions. And there is no way in God’s earth that they were going to let one picture fly out of there for a couple $100 million to help pay for this problem.
So they came up with this so called “Grand Bargain” and foundations and assorted organizations paid $18 million into the pension fund a month. But you put that in perspective, $18 million, it was one half of one month’s benefits. We paid at the time, like $32 million to $35 million a month to all retirees. So that’s over $300 million a year. That’s what we pay. These guys are so stinking happy to give $18 million a month for 10 years and then it stops. You’re all done. Once you get into the finances of it and see how they really are by what they fight against you over or what they take you to court for, that pisses you off.