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  #591  
Old 12-29-2014, 05:23 PM
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After seeing something not so good happening in my city with city-owned cultural pieces, I think it's good that the art will be owned by a trust and not by the city.

My city owns a lovely old historic building that houses several arts organizations. The building is falling apart and the city refuses to maintain it. A group of wealthy private donors (who primarily, though not exclusively, live in the suburbs) raised enough pledges to give the building some badly-needed renovations that come with a 7-figure price tag (maybe 8 figure... can't quite remember) but on the condition that the city give the building to a private trust.

The city won't give up the building, but neither will they maintain it and it's a beautiful building that is literally crumbling. The private donors don't trust the city... they are afraid that as soon as the expensive renovations are made, the city will turn around and sell the building. Hence the proposed solution of turning the building over to a private trust.

It's best if the city doesn't own that kind of stuff IMO.
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  #592  
Old 02-18-2015, 07:39 AM
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here come da judge

http://www.freep.com/story/news/loca...ptcy/23551619/

Quote:
U.S. Bankruptcy Judge Steven Rhodes said that it was an easy legal decision to authorize pension reductions in Detroit's bankruptcy but that he felt still compassion for the city's retirees and citizens who suffered because of the city's financial collapse and water shutoffs.

.....
Still, his groundbreaking ruling on Dec. 3, 2013 giving Detroit emergency manager Kevyn Orr the authority to reduce the city's pension obligations was prudent, the judge said.

Michigan's Constitution describes public pensions as a contractual obligation that cannot be cut, but federal bankruptcy law allows contracts to be severed.

"I have to say that from a legal perspective, it was not a particularly difficult decision," he said.

Rhodes is officially retiring on Wednesday after delaying his retirement in 2013 to accept the case.

The judge said he was frustrated in 2014 when the city started shutting off water to delinquent ratepayers, including many people who could not afford to pay.

"It weighed on me very heavily," he said. "I was concerned that the city's response was not adequate. Now, that inadequacy, however, was not something I had any jurisdiction over and I tried to make that clear."

.....
■Lauded the grand bargain to save the Detroit Institute of Arts and lower pension cuts, a deal masterminded by chief mediator Gerald Rosen. Nonprofit foundations, the state of Michigan and the DIA's donors pledged the equivalent of $816 million over 20 years to the grand bargain, and retirees approved the deal by voting to accept cuts.

"The work that Judge Rosen and his team did on the grand bargain was absolutely miraculous and unprecedented, not only in the history of bankruptcy but in the history of mediation, as far as I know," Rhodes said. "They went outside of their roles as mediators to go out and solicit money to solve the city's problem. And that was enormous."

■Reiterated previous statements that Mayor Kwame Kilpatrick's $1.4 billion pension debt deal in 2005 "should have been a red flag" because it "was structured to be an intentional evasion of the legal debt limits that municipalities are by state law required to stay within. It was too innovative. It was too creative."

The city, he said, should have filed for bankruptcy at that point -- or perhaps earlier.

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  #593  
Old 03-31-2015, 04:46 PM
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TAX FORECLOSURES

http://www.npr.org/2015/03/30/396317..._campaign=news

Quote:
In Detroit, tens of thousands of people are facing a deadline Tuesday that could cost some of them their homes. That's when homeowners have to make arrangements to either pay delinquent property taxes — or risk losing their home at a county auction.

When Detroit emerged from bankruptcy last year, it did so with a razor-thin financial cushion. It desperately needs every bit of tax revenue it can muster.

Earlier this year, county officials sent out 72,000 foreclosure notices to homeowners behind on property taxes — 62,000 of them in Detroit alone. They say about 18,000 of these properties are occupied, but fewer than half of those homeowners have paid all of their tax.

So officials like City Councilman Gabe Leland are knocking on doors in Detroit neighborhoods, reminding residents that the window to pay taxes is quickly closing.

......
But Wayne County Deputy Treasurer Eric Sabree says a moratorium is out of the question because Detroit's property tax revenue is already spoken for.

"We pledge all the penalties and fees in our bond pledges to borrow money," he says. "We can't do a moratorium on police protection or fire protection."

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  #594  
Old 07-29-2015, 03:49 PM
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IMPROVEMENT

http://www.detroitnews.com/story/new...ting/30835941/

Quote:
Detroit — Mayor Mike Duggan will hold a news conference Wednesday afternoon to detail what city officials say is a “major upgrade” in the city’s bond rating status.

The city, which is seven months out of bankruptcy, said it received an investment grade bond rating Wednesday from Standards & Poor’s Rating Services on $245 million in bonds tied to the city’s bankruptcy exit financing.

The financial recovery bonds were originally privately placed with Barclays Capital Inc., on Dec. 10 as the city made its exit from Chapter 9.

The rating service says its assigned its ‘A’ rating, with a stable outlook, to Michigan Finance Authority’s Local Government Loan Program revenue bonds, issued on behalf of Detroit and based on a first-lien pledge of the city’s income tax. The bonds are also secured by a limited-tax general obligation pledge.

At the same time, Standard & Poor’s assigned its ‘B’ issuer credit rating, with a stable outlook, to Detroit. The bonds are rated based on the income tax pledge.

The city says the favorable rating should allow it to save $2.5 million annually and $20 million in interest costs over the life of the debt.
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  #595  
Old 07-29-2015, 03:54 PM
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Signs of irrational exuberance?
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  #596  
Old 10-20-2015, 06:02 PM
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RECOVERY?

http://www.bloomberg.com/news/articl...ord-bankruptcy

Quote:
Hope Is a Traffic Jam as Detroit Shakes Off Record Bankruptcy

Downtown thrives as vast expanses remain poor and unpeopled
`A good comeback story,' but its ending remains unwritten

Progress in Detroit is a bumper-to-bumper jumble of cars and buses inching through downtown.
Ten months after emerging from a record $18 billion municipal bankruptcy, Detroit is functioning in ways unseen for months and even years -- street lights are on, parks get mowed, municipal debt is sold on the public market and the police are training civilians to manage traffic at clogged intersections.
"It’s a madhouse," said Joshua Elling, a community development executive whose usual 20-minute commute can sometimes take an hour.
This is the contrast of the remade Detroit. A vibrant downtown attracts young people, and a new streetcar line and arena complex rejuvenate a city accustomed to resignation. Yet the vast expanse of residential streets, where four of 10 live in poverty, map the long-term challenge. Surrounding neighborhoods represent 95 percent of Detroit’s land mass, roughly the size of Boston and Baltimore combined, and await revival amid 70,000 vacant buildings.
"Everybody likes a good comeback story, a good underdog story, and that’s what Detroit is," said Luther Keith, executive director of Arise Detroit, a coalition of neighborhood groups headquartered on the sprawling east side. “Where it goes, I don’t know.”
The Census Bureau deems the city the nation’s poorest. After losing more than half of its population and 90 percent of its manufacturing jobs since 1950, Detroit became the nation’s first major city to file for bankruptcy protection, in July 2013. There is no template for a recovery of this magnitude. Despite indicators of increased housing sales, the city continues to lose population, dropping to 680,000 last year. The child poverty rate is 59 percent. For most of the city’s 139 square miles (360 square kilometers) little has changed.
Feeding Zone
Downtown Detroit, however, thrives. Quicken Loans Inc. and Blue Cross Blue Shield of Michigan are responsible for more than 15,000 jobs there. In downtown and midtown, 77 restaurants have opened since 2013, a 26 percent increase, according to 7.2 SQ MI, a data project that tracks economic changes in the city. Over the same period, the number of retail establishments grew 13 percent, to 352.
Reminders of reality are never far away. A billboard promoting a homicide tip service features the picture of a man next to the inscription, "You know who killed me."
“People understand it took us 50 years to get to this point -- you can’t turn it around on a dime," said Jed Howbert, who directs the jobs and economic development team for Mayor Mike Duggan. "There’s no hiding the fact that there are areas of the city that are so vacant that you’re rebuilding a neighborhood from whole cloth."
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  #597  
Old 12-03-2015, 03:22 PM
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POST-RECOVERY PLAN
PENSION PAYMENTS

http://www.detroitnews.com/story/new...tant/76586222/

Quote:
The city of Detroit plans to hire a consultant to examine massive legacy costs that come due when its recovery plan winds down, a report to Gov. Rick Snyder says.

In the Nov. 24 biannual report publicly released Monday, Detroit’s Financial Review Commission writes that the city is implementing programs in accordance with its bankruptcy plan and anticipates a larger than expected surplus for the 2015 fiscal year.

But it also hits on recent actuarial projections that suggest the city’s required contribution to its two pension funds in 2024 could jump by more than $80 million.

The state-mandated review commission was installed to oversee the city’s finances after bankruptcy and to ensure that Detroit complies with its court-approved exit plan.

Detroit’s bankruptcy “grand bargain” funding plan relieves the city from much of the contributions to the General Retirement System and Police and Fire Retirement System through 2023. But in 2024, the city would have to start funding a substantial portion of the pension obligations to the systems from its general fund.
....
The city’s plan of adjustment laid out a schedule for pension payments for the first 10 years. In the year ending June 30, 2015, the state contributed $96 million and foundations chipped in $18.3 million toward the police and fire fund. Additionally, the state paid $98.8 million and the Detroit Institute of Arts kicked in $5 million for the general retirement fund.

Foundations have a nine-year commitment of $18.3 million annually toward funding police and fire pensions and the DIA is to contribute $5 million toward general pensioners each of those years.

The city’s general fund did pay $12.5 million into the general pension for 2015 and is to pay $20 million each year between 2016-19. Detroit’s Water and Sewerage Department also is paying into the fund.

Naglick and Rose noted that changes in the projections over the next few years could be positive or negative.


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  #598  
Old 12-17-2015, 01:07 PM
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http://www.bondbuyer.com/news/region..._medium=social

Quote:
Detroit, A Year Out Of Bankruptcy, Still Faces Long Road Back

CHICAGO – Long-term pressures continue to weigh on Detroit's recovery, a year after the city emerged from bankruptcy with a healthier balance sheet.

The city marked the one-year anniversary on Dec. 10 of its exit from the largest-ever municipal bankruptcy.

The city has hit fiscal targets laid out in its Chapter 9 Plan of Adjustment, and will soon complete a long-planned shift of its water and sewer debt to a new regional authority.

Detroit's ability to respond to profound economic challenges and attract residents and businesses was helped, but not solved, by the city's elimination of $7 billion of debt through bankruptcy, market participants say.

......
The city's September 2015 unemployment rate of 11.5% remains high but is lower than the 16.3% a year ago. Monthly average employment is up more than 1% in the current year and could benefit from commercial investments planned by General Motors Co. at its Detroit-Hamtramck assembly plant.

The most detailed look at the city's post-bankruptcy finances came in late November from the Detroit Review Commission. The nine-member group was established under the so-called "Grand Bargain" legislation that drove the bankruptcy exit plan and is charged with ensuring that Detroit stays on course by reviewing borrowing, some contracts, and long-term fiscal plans.

Detroit ended fiscal 2015 June 30 with operating revenues up 1% over budgeted projections. For the current fiscal year, revenue is tracking about 3% over budget, according to the city. Based on first-quarter fiscal 2016, the city projects a $35 million budget surplus.

"We are very pleased that revenues are coming in slightly ahead. We've been very disciplined," said the city's finance director, John Naglick.

......
PRESSURES

Pension obligations and remaining debt pose challenges to the city's balance sheet recovery.

"The city's debt service, even after the debt relief provided in the plan of adjustment, remains substantial," the commission report said. The city is required to provide quarterly debt service reports to the FRC certifying its ability to meet its obligations through the fiscal year. The last tranche of current city debt matures in fiscal year 2044, and the current annual debt service requirements through fiscal year 2025 average $147.4 million.

While Detroit's bond debt is known, its pension costs are cloudier.

After 2023, the city will draw from its general fund to cover pension obligations. When it exited bankruptcy a year ago, actuarial estimates in the city's Plan of Adjustment projected a payment of $111 million in 2024. In November, the system's actuary raised the figure to $194.4 million. The fiscal commission report says the big leap was due to changes in mortality tables and a differing effective date of the exit plan and pension plan amendments.

"It is important to understand that many changes in the projections will occur over the next few years and these changes may be positive or negative," the commission report said.

Naglick said the city intends to engage a consultant next year to look at funding options.

"In the absence of substantial economic expansion and revenue growth, the requirement to resume funding pensions from general operations risks posing serious financial challenges for Detroit," Moody's warned.

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  #599  
Old 03-15-2016, 02:55 PM
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http://mobile.reuters.com/article/idUSKCN0WE00I

Quote:
(Reuters) - Steven Rhodes, a former federal bankruptcy judge who is now running the Detroit Public Schools (DPS), said on Friday he is prepared to close the debt-laden district next month if the Michigan Legislature fails to throw it a financial lifeline.

Rhodes was appointed by Governor Rick Snyder last month as transition manager of the state's largest public school district. Lack of funding and mismanagement have left students to learn in cold and dirty classroom conditions.

Asked by Reuters in a telephone interview what he would do if there is no legislative fix, Rhodes was blunt: "Close the schools."

But he also said he had "the greatest confidence" that state lawmakers would take action over the next two weeks to prevent such an outcome. Rhodes cautioned there was no "Plan B" to avoid a shutdown once the district's money runs out on April 8.

"It would be a disaster for the kids. It would be a disaster for parents. It would be a disaster for the city. It would be a disaster for the state. It can't happen. So I don't believe it will happen," he said.

Rhodes oversaw the city of Detroit's historic bankruptcy before he retired from the bench last year.

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Old 04-03-2016, 05:02 PM
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DETROIT SCHOOLS
CORRUPTION

http://www.usatoday.com/story/news/n...rged/82378558/

Quote:
DETROIT — In its latest crackdown on school corruption here, the federal government Tuesday dropped a legal bomb on 12 current and former principals, one administrator and a vendor — all charged with running a nearly $1 million bribery and kickback scheme involving school supplies that rarely were delivered.

Among those charged: Ronald Alexander, principal at Charles L. Spain Elementary-Middle School that's scheduled to receive more than $500,000 in donations from TV talk show host Ellen DeGeneres. Alexander's charge, unrelated to DeGeneres' announcement in February, is bribery for allegedly pocketing $23,000 money from Norman Shy in exchange for using the owner of Allstate Sales as a school-supply vendor, according to federal court records.

Shy, 74, of Franklin, Mich., is at the heart of the accusations. For 13 years, he is accused of paying $908,500 in kickbacks and bribes to at least a dozen Detroit Public Schools principals, scamming schools to the tune of $2.7 million with the help of those principals, prosecutors allege. Each defendant faces up to five years in prison and up to $250,000 in fines.

......
News of the larger corruption case comes at a critical time as the state grapples with fixing the finances of the struggling Detroit district, the largest school system in Michigan. The schools have been under the control of a state-appointed emergency manager since 2009 and have accumulated an operating deficit of at least $515 million.

Last week, Michigan lawmakers passed $48.7 million in emergency financing to ensure that the school system doesn’t run out of cash early next month. They also put the district under the authority of a financial review commission.

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