Kevyn Orr - the man who must fix Detroit - Telegraph Although the crisis of 2008-09 deepened the financial struggle confronting many American cities, Detroit's difficulties did not emerge overnight. Since peaking at almost 2m in the decade after the Second World War, the city's population - and its number of taxpayers - has been steadily shrinking and now stands at just 700,000. Snyder declared a financial emergency and appointed Orr last month after a state review showed Detroit ran a deficit of $327m last year and has unfunded liabilities of more than $14bn thanks to retirement plans for former city employees. The decision to appoint Orr, who spent more than a decade as a specialist in bankruptcy law at Jones Day, suggests that the Republican governor is after radical solutions. "He has absolutely done the right thing," said Bruce Katz, an expert on US cities at the Brookings Institute and author of The Metropolitan Revolution. The fiscal situation is dire, and at some point in the life of a city, these sorts of actions are warranted. It is not an opinion shared by everyone in Detroit. The breadth of Orr's powers has catapulted him above Detroit's mayor, Dave Bing, provoking fierce criticism that the declaration of a financial emergency is undemocratic. The American Federation of State, County and Municipal Employees, a local union, is suing to overturn the appointment. The hostility underlines the precarious path that Orr, who perhaps helpfully graduated from a local university, will have to tread in a job that comes with a $275,000 annual salary. A week into his 18-month term and restructuring experts say the lawyer's most pressing need is to ensure that basic services - including health, education and police - are delivered. "You've got to get the buy-in from people," argued Jim Spiotto, head of bankruptcy law at Chicago law firm Chapman and Cutler. The city needs a cash flow to pay for the basics. That is a significant challenge in a city where the politics complicate the fiscal and economic picture. Katz of the Brookings Institute says the need to keep the lights on will quickly confront Orr with the connected, but more complex, challenges of trying to turn Detroit around. While the city's population has fallen over the last half century, it has done so unevenly, requiring the city government to provide basic services to pockets of people over a significant geographical area. About 25pc of Detroit's housing has been left empty, according to figures from Detroit Future City, a plan for the city drawn up by some local residents and businesses. "You have a shrinking population in a very large land mass," says Katz. How do you deliver services? Part of Orr's answer to that question will be where he sees the majority of Detroit's residents living a decade from now. Katz believes far more will be in the city's centre, where efforts should be focused on attracting businesses to create jobs and grow tax revenues. Juggling Detroit's pressing short-term needs for cash while drawing a map of its long-term economic future will not be easy. Orr acknowledged as much at a recent press conference, where he described the task as the "Olympics of restructuring." Besides Detroit's residents and politicians, Orr also needs the support of the city's bondholders, who have lent it almost $4bn since 2005. Experts forecast that Orr may try to negotiate with bondholders to lengthen the period Detroit has to pay back the debt, though just days into the job, his strategy remains unclear. As recession gripped the US in the first half of 2009, the White House chose to restructure GM by making the company file for bankruptcy protection. It was a process mediated by a court and, critically, relieved GM of immediate pressures to pay creditors as it worked to restructure its debt and rein in its future financial obligations. Orr could do the same to Detroit. "It's the nuclear option," says Spiotto. It will be an admission that everything else has failed.