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  #601  
Old 04-04-2016, 12:34 PM
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Hope these principals lose their job & pension and the school supply company has to pay back what they stole. Ugh.
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  #602  
Old 04-04-2016, 01:16 PM
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Given that these are federal criminal charges, keeping the jobs may not be an option anyway
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Old 04-04-2016, 04:12 PM
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Given that these are federal criminal charges, keeping the jobs may not be an option anyway
Hopefully keeping their pension isn't an option either.
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Old 04-04-2016, 04:23 PM
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That depends on state law, I've found.

In New York, they're still trying to change it...and it's been getting nowhere.
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  #605  
Old 04-04-2016, 04:58 PM
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Saw this thread get bumped today and thought the name is now a bit off (they did declare, right?).

Then I wondered if they're currently closer to their last bk or to their next one....

So I guess I'm ok with the name.
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  #606  
Old 04-04-2016, 05:39 PM
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I don't feel like changing the thread name. I'm making it about Detroit financial/governance issues.

Yes, Detroit already went through the bankruptcy process. Exited a while ago.

They may still have a trouble supporting some of the leftover liabilities/budget/etc. (specifically the pensions, which weren't cut anywhere near as much as the bonds were.)

But it will probably take them a while to end up back in bankruptcy court.
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Old 04-08-2016, 10:51 AM
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http://mobile.reuters.com/article/idUSKCN0WE00I

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(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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DETROIT SCHOOLS
CORRUPTION

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


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[snip]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. [/snip]
o.i.c.

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  #608  
Old 04-08-2016, 11:30 AM
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Yes, this is why I have to keep track. Things change.
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  #609  
Old 05-18-2016, 08:20 AM
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I wrote a review of Bomey's book:
http://stump.marypat.org/article/456...bomey-a-review

That's not the real reason for the post. It's to excerpt Bomey's book. There was only one short section where actuaries were mentioned.

Here it is:

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What’s more, actuarial assessments for pension funds are part mathematical science, part fortune-telling. Actuaries try to predict the future by applying formulas to project investment returns and mortality rates among pension holders. This allows employers to estimate their pension costs. But actuarial methods involve a surprising amount of guesswork, sprinkled with a heavy dose of worldview.

What is a reasonable rate of return to expect on your investments? Anyone with an online investment account knows that past performance isn’t an indicator of future results. Responsible families, businesses, and governmental entities project conservative rates of return to avoid shortfalls when the stock market doesn’t perform well. In 2014, the top 100 publicly traded U.S. companies with pension plans projected annual rates of return of 7.3 percent, according to actuarial firm Milliman.

In Detroit, Orr’s team concluded that by projecting average annual investment-return rates of 7.9 percent and 8 percent, the two pension funds had made their collective shortfall look a lot smaller than it really was. Why? The higher the assumed rate of return, the less money governments have to contribute to keep their pension funds healthy. With an expectation of high rates, there’s an assumption that investment increases will be sufficient to meet future pension obligations. This offers governments little incentive to accurately report the health of their pension funds. By simply maintaining an artificially high projected rate of return, they can lower their annual costs and spend money on other priorities.
….
Like many other pension funds, Detroit’s pension boards also used a polarizing actuarial technique called “smoothing” to spread out investment losses over a long period of time, instead of recognizing the losses immediately. The smoothing process—an actuarial form of lessening the impact of underperforming investments—further masked the seriousness of the pension shortfall in Detroit and allowed the pension boards to obscure the consequences of irresponsible investments.

Other than that, actuaries are pretty much not mentioned. We don't even appear as an index item, and the book has a thorough index.
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Old 05-19-2016, 03:05 PM
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http://www.governing.com/blogs/bfc/c...al-issues.html

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Detroit's school woes also aren't new. A recent report from Moody's Investors Service chronicles how Detroit Public Schools' finances have been steadily deteriorating despite being under direct state oversight since 2009. Even after $48.7 million in emergency state funding, DPS officials say they only have enough money to operate through June, which has already triggered two sickouts by teachers who fear that they won't receive paychecks after June 30 for work performed before that time.

The Moody's report says Michigan leaders have less than two months to agree on a plan if DPS is to avoid bankruptcy. Yet with so little time remaining, the state House and Senate have passed dramatically different plans.

Recent House legislation would split the district in two, with one entity to pay off debt and the other to handle day-to-day educational operations. It would provide $500 million to pay off an operating deficit estimated at $515 million and extend a $33 million loan to assist the transition to the new arrangement. Teachers' union contracts would not transfer to the new district, and some district staff would be required to reapply for their jobs.

A Senate restructuring bill passed in March would also split the district in two, but it provides $720 million in funding and includes none of the House's labor provisions.

While the failure to act only worsens both pension and school-district finances, there is at least one important difference between the two: Appropriating enough money to meet obligations generally solves pension problems, at least in the short term. But money is only part of what ails Detroit's schools.

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