Feb 23 Detroit Mayor Mike Duggan on Thursday
proposed setting aside money in a special trust fund to cover
higher-than-expected pension payments expected to begin in
Under the plan, fund deposits and interest earnings would
total $377 million by the end of fiscal 2023, according to John
Naglick, the city's finance director.
Detroit, which exited the biggest-ever municipal bankruptcy
in December 2014, has already set aside $70 million for the
higher pension payments.
The court-approved bankruptcy exit plan had projected city
pension payments to spike to $111 million beginning in fiscal
2024 after years of minimal or no payments by the city. But a
subsequent actuarial analysis pegged the payment spike at $200
million or more.
In his annual budget presentation to the city council on
Thursday, Duggan also proposed a $1.074 million general fund
budget for the fiscal year beginning on July 1 that is slightly
smaller than the current spending plan.
The city's credit rating remains deeply in the junk category
in the wake of the bankruptcy, which allowed Detroit to shed
about $7 billion of its $18 billion of debt and obligations.
Naglick said Detroit is eying the sale of about $100 million
of bonds backed by state of Michigan transportation funds due
the city. The bonds would be issued through the Michigan Finance
Authority and would have investment grade ratings, he said.
(Reporting by Karen Pierog in Chicago; Editing by Matthew