Detroit: Has Oversight Helped the Municipality Rebound?

Harris Beach PLLC
Contact
There is evidence of a turn-around for municipalities recently struggling to stay afloat. We have posted on several occasions about the fiscal challenges facing municipalities nationwide, from Detroit and Chicago in 2015 and 2016 as well as national concerns in late 2016 and fiscal issues within the State in 2016 but recent news shows some progress made since those posts.
 
The City of Detroit is on the rebound three years after emerging from bankruptcy to the point it has recently moved beyond budget oversight.  When Michigan’s oversight commission approved on April 30 ending oversight among the reasons was three straight years of balanced budgets with surpluses totaling, according to the Detroit News, $187 million.
 
As readers may recall, Detroit filed for bankruptcy during the summer of 2013 and exited in December 2014 following a “grand bargain” with the Michigan legislature for financial oversight along with $1.7 billion in restructuring and relief from many payments to two pension funds through 2023.  The oversight commission was established as a condition for state financial aid which aid in turn allowed Detroit to save cuts to city retiree pensions and protect the Detroit Institute of Arts from bankruptcy creditors.
 
The city still has issues to confront.  While the city is no longer under Michigan’s oversight commission, the commission itself will continue to exist for several more years as state law requires the commission annually grant the continuation of local control.  In addition, while many abandoned houses have been torn down, the city’s population has been reduced by nearly six percent since 2010.
 
MuniBlog will continue to monitor whether Detroit can continue to make progress, and whether population declines reverse course.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Harris Beach PLLC | Attorney Advertising

Written by:

Harris Beach PLLC
Contact
more
less

Harris Beach PLLC on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide