Detroit uses surplus to pay off post-bankruptcy bonds 8 years early (2014, mortgage)

[Geo-Aggie]

This according to a March 14th article in Crain's.

This settles the remainder of debt left on an 88.7 million dollar 12-year bond and will save the city 11.7 million in total interest payments over the next 8 years. Additionally, as money from parking was going toward paying this bond, now any parking revenue goes into the city's coffers to pay for .. whatever city leadership determines it will be used to pay for.

I have a hard time imagining Detroit could've accomplished something like this pre-bankruptcy. The bankruptcy and solid leadership of the last 4 years have really done well for the city. It'll be exciting to see where this goes in the next 10-20 years.

[Coldjensens]

Maybe they should pay back some of the people who got screwed over due to the bankruptcy.

Although that is a nice thought. I think they cannot legally do so. They cannot give public funds to someone without an obligation to do so or a benefit to the City.

[ekman243]

Actually most mayors can do the same things if they were handed the same hand that Duggans has. Imagine someone telling you that you no longer have to pay your mortgage along with refunding you all the interest that you paid in the past, credit cards or healthcare care premiums, you would be flush with cash yourself. I think you need to thank Kevin Orr and his team and the City of Detroit retirees who now pay outrageous amounts for their healthcare, pension cuts, no cost of living increases, and giveback of previously earned interest. If you re keeping count that is a lot of money that previous mayors and every other mayor in this country still have to pay.

[North 42]

Originally Posted by Geo-Aggie

This according to a March 14th article in Crain's.

This settles the remainder of debt left on an 88.7 million dollar 12-year bond and will save the city 11.7 million in total interest payments over the next 8 years. Additionally, as money from parking was going toward paying this bond, now any parking revenue goes into the city's coffers to pay for .. whatever city leadership determines it will be used to pay for.

I have a hard time imagining Detroit could've accomplished something like this pre-bankruptcy. The bankruptcy and solid leadership of the last 4 years have really done well for the city. It'll be exciting to see where this goes in the next 10-20 years.

I agree that Duggan’s solid leadership on top of the bankruptcy has been a big part of Detroit’s current success, regardless of what some others may think! The man has been successful for a reason!

[Geo-Aggie]

There's no downplaying the bankruptcy as necessary in making any of the recent success of Detroit possible, but likewise there's no downplaying the good decisions being made at the top by both public and private leaders of the city. While Duggan has been fantastic, this extends well beyond Duggan, and I think we should all recognize that too.

Also, while it is certainly unfortunate how the pension issue played out, I don't believe it was reasonable to claim there was another way. The city had over-promised payments which it could never make, due to population loss, manufacturing loss, and other factors. Pensions are generally unsustainable and the generous ones of generations passed are a relic. I'm not defending this, it's a crappy situation, but it is the situation which we must live within. Given our increased life expectancy and lower fertility rates, pensions are simply non sustainable in the manner which they were 50 years ago. If nothing else, rest assured that the injustice is being spread around. My employer will depress my wages to sustain a pension I can never collect from while contributing a fraction of that amount to a 401k account for me. I digress.

The best thing Detroit can do at this point is look toward a fiscally responsible future. Paying off debt 8 years early certainly fits that.

[ekman243]

Originally Posted by Geo-Aggie

There's no downplaying the bankruptcy as necessary in making any of the recent success of Detroit possible, but likewise there's no downplaying the good decisions being made at the top by both public and private leaders of the city. While Duggan has been fantastic, this extends well beyond Duggan, and I think we should all recognize that too.

Also, while it is certainly unfortunate how the pension issue played out, I don't believe it was reasonable to claim there was another way. The city had over-promised payments which it could never make, due to population loss, manufacturing loss, and other factors. Pensions are generally unsustainable and the generous ones of generations passed are a relic. I'm not defending this, it's a crappy situation, but it is the situation which we must live within. Given our increased life expectancy and lower fertility rates, pensions are simply non sustainable in the manner which they were 50 years ago. If nothing else, rest assured that the injustice is being spread around. My employer will depress my wages to sustain a pension I can never collect from while contributing a fraction of that amount to a 401k account for me. I digress.

The best thing Detroit can do at this point is look toward a fiscally responsible future. Paying off debt 8 years early certainly fits that.

What does any of this have to do with the fact that Duggans hand is simply better than previous mayors and most big city mayors because he doesn't have to pay out what they did/do,thus he and the present city council have more cash on hand ala you not paying your credit cards and mortgage any longer.In addition most negative press about a city, county or nation comes from the media instagating the political ambition of potential rivals.. So far he is quite lucky that so far the current city council seems to be happy or not ready yet (Mary sheffield young, female and popular)with where they are in life, but its coming, always has, always will. Mary and her father can cause so much damage to Duggan if they were not getting rich with city contracts.

[MS313]

I'm glad that this is what they're doing with the surplus money, it's going to set Detroit on a better path in the future as far as finance goes.

[usroute10]

Originally Posted by ekman243

Actually most mayors can do the same things if they were handed the same hand that Duggans has. Imagine someone telling you that you no longer have to pay your mortgage along with refunding you all the interest that you paid in the past, credit cards or healthcare care premiums, you would be flush with cash yourself. I think you need to thank Kevin Orr and his team and the City of Detroit retirees who now pay outrageous amounts for their healthcare, pension cuts, no cost of living increases, and giveback of previously earned interest. If you re keeping count that is a lot of money that previous mayors and every other mayor in this country still have to pay.

If so many of these retirees and their neighbors had not bailed on the city, and if they had elected competent government officials, maybe they would still have their pensions. But you can't be complaining about a pension when 2/3 of the population bailed and all of the people who you worked with live in the suburbs, Florida, Las Vegas and Phoenix.

[ekman243]

Your reply shows me you have reading and understanding issues, why are you taking a personal and political stand on a stated fact. Maybe it was the right thing to do or maybe it wasn't but the facts are that Kevin Orr and his team and the US government put Duggan and the current city council in a far better position than most city ,county and state governments, Detroit doesn't have to pay a lot of their past and future bills. What other cities, counties and states do about it short of filing bankruptcy remains to be seen, but currently they still are paying it out unlike Detroit. By the way when you are using the word "you" who are you referring to, the pensioners, the unpaid bondholders, me? If you are referring to me, I am neither, I just stated why Duggan has an advantage.

[Geo-Aggie]

Yes, ekman nobody is arguing that Duggan doesn't have an advantage, stop trying to make this into a strawman.

The point remains that Detroit couldn't pay a lot of its past and future bills. this is why bankruptcy happened. This is why bankruptcy had to happen. There were no guarantees that things would turn out well in post-bankruptcy Detroit. If you recall there were quite a few skeptics about Detroit having any sort of future, back in 2014, but things look tentatively good right now. Yeah, Duggan and other city leaders have a situation better than any of the leadership of Detroit has seen since probably the Early 1990's, but that doesn't mean they will make responsible decisions and help facilitate positive change in Detroit. Yet, that is what we see. This is good. Current city leadership gets credit where due.