Detroit is rapidly approaching a point of no return with its finances, said the city's appointed emergency manager, in a report released Sunday.
The report came from bankruptcy attorney Kevyn Orr, who was appointed to review the bankrupt city and take over its finances, CBS reported. The state picked Mr. Orr in March, after learning that the city was facing a budget shortfall of $327 million.
Mr. Orr said the shortfall is growing and will hit $386 million in the next two months.
"What is clear ... is that continuing along the current path is an ill-advised and unacceptable course of action if the city is to be put on the path to a sustainable future," said Mr. Orr, in the report, CBS said.
The city's attempt to stave off further financial degradation is lacking, he found. For instance, Mr. Orr said, deferring pension payments hasn't helped much.
"Even with these deferrals, the city has operated at a significant and increasing deficit," he said, in the report. "It is expected that the city will end this fiscal year with approximately $125 million in accumulated deferred obligations and a precariously low cash position."
Mr. Orr blamed the city's waste, "mismanagement, crippling operational practices and, in some case, indifference or corruption" as key factors in its fiscal emergency.
"Outdated policies, work practices, procedures and systems must be improved consistent with the best practices of 21st century government," he wrote, CBS reported.
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