  Wilus1mj Member Username: Wilus1mj Post Number: 34 Registered: 05-2005 Posted From: 67.149.62.53 |
With all the older suburbs struggling with rising costs to maintain pensions & healthcare for its retirees. Will Detroit address the problem...maybe with 401K plans instead of pensions? | ||
Livernoisyard Member Username: Livernoisyard Post Number: 51 Registered: 10-2004 Posted From: 69.242.223.42 |
At some point, they have to do something. KK isn't making its progress payments, as it is, to the current pension plan. Instead, the city borrows more via bonding. | ||
Ray1936 Member Username: Ray1936 Post Number: 273 Registered: 01-2005 Posted From: 207.200.116.139 |
As a retired City employee (1955 - 1984), I can tell you that the city has never made a required pension payment on time. They wait until the end of the fiscal year every year, and often have been taken to court when they failed to pay at the end. Then the courts always order them to pay -- with interest. Never made sense to me. However, I've never known them to create a bonding issue to make payments. Is this a fact, Livernoisyard, or rumor??? | ||
Bobj Member Username: Bobj Post Number: 443 Registered: 11-2003 Posted From: 65.221.183.120 |
There is no way that the City of Detroit can continue the current pension plan with new employees - they need to go the 401k route before they bankrupt the whole plan and put retiree'e pensions at risk. | ||
Livernoisyard Member Username: Livernoisyard Post Number: 55 Registered: 10-2004 Posted From: 69.242.223.42 |
Funding city employees' pensions is but one problem facing Detroit's taxpayers currently. Rumor, you say? The Detroit News seems to report things differently than a particular ex-city employee... Here are but two articles, one concerning Archer's time and another more recent. This has been a lingering time-bomb for some time. There are more sources of information on the city of Detroit finances: Thursday, March 24 2005 - Standard & Poor's downgrades Detroit's bonds Action complicates the city's ongoing financial crisis; $95 million deficit expected in '05. "DETROIT -- One day after Mayor Kwame Kilpatrick proclaimed that a stable credit rating is one of the city's bright spots, rating agency Standard & Poor's downgraded the city's bonds to just above junk grade. Citing financial deterioration and "ongoing structural imbalances that could take years to cure," the agency lowered the city's unlimited-tax general obligation bonds to BBB+ from A-, and lowered the limited-tax bonds to BBB from A-. The action complicates the city's ongoing financial crisis by tending to increase its borrowing costs -- something it can ill afford as it struggles to match spending with declining revenues. Preliminary projections show the city will close the fiscal year that ends June 30 with a $95 million deficit, and the problem is being compounded by a negative balance of $69 million from the previous year. The city has about $1.7 billion of outstanding general obligation debt. During the mayor's State of the City address Tuesday, he warned that the upcoming budget year will be difficult. Without offering details, he said the city will have to make "decisions many of us will not be happy with." He urged unions to help the administration reduce spiraling health care costs." Financial crisis faces Detroit’s next mayor - Economic downturn, fallout from Sept. 11 wallop city’s budget By Judy Lin / The Detroit News "* Sale of bonds. This fiscal year, the city had budgeted $400 million in bond sales, $40 million for city services and $360 million for federally mandated improvements to the city’s Water and Sewerage Department. Under Archer, the city’s bond rating has improved dramatically, though it still ranks below that of many other major cities. The city’s bond rating is important because it sets the price at which a city can borrow money for major projects. But with the economy slipping, Wall Street’s bond-rating agencies are likely to revise Detroit’s rating downward. From 1979-86, Detroit did not issue general obligation bonds because Wall Street’s rating services declared Detroit bonds below “investment grade.” In 1987, the city sold its first bonds in eight years, $51 million worth. But by 1992, in the midst of the last recession, major rating firms were issuing warnings about the city." |
