Detroit’s Comeback
Stacy L. Fox Former Deputy EM City of Detroit
April 28, 2015
Over the past several decades, the City’s population has declined over 60%
JUN-50 JUN-60 JUN-70 JUN-80 JUN-90 JUN-00 JUN-10 DEC-12 -
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1,850
1,670
1,511
1,203
1,028 951
714 685
(Pop
ulat
ion
in 0
00's
)
2
Detroit has more revenue sources, but less revenue
State-shared Revenue
Revenue from taxes
Fee and Service Revenue
1960 Total Revenue: $2 Billion (in 2013 dollars)
State-shared revenue16%
Property taxes49%
Fees, sale of servicesand other revenue35%
2012 Total Revenue: $1.1 Billion (in 2013 dollars)
State-shared Revenue16%
PropertyTaxes13%
IncomeTaxes21%
Fees, sale of services and other revenue30 %
Wagering Taxes16%
Utility Taxes4%
3
4
State of the City Pre-Bankruptcy
• High unemployment• High crime rates• Crumbling infrastructure• Inadequate city services• Inability to compete with
suburbs
5
Financial Condition Detroit’s deteriorating financial condition continued
to grow as legacy expenditures absorbed additional resources
2007 A 2008 A 2009 A 2010 A 2011 A 2012 A 2013 P$0
$100
$200
$300
$400
$500
$600
$700
$800
$91$142
$267
$91$197
$327$245
$75
$75
$75
$75
$75
$75$250
$250
$250
$250
$130
Accumulated Deficit LTGO Series 2008A LTGO Series 2010 LTGO Series 2012C
($ in millions)
6
Chapter 9 Case – Key Events
• Resolution through Mediation
• Mayoral Election• Ruling on Pensions• Grand Bargain• Pensioner Vote
General Fund Pro Forma Capitalization
7
Pre-Petition Pro Forma$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
OPEB $4,303
Pension $3,129
Pension $1,447
COPS $1,473
$543
$1,100
UTGO $488
UTGO $388
$290
$275
Other $280
Other $90
LTGO
Exit Financing
Total: $10,506b
Total: $3,300b
LTGO
COPS Swap
General Fund 10 Year Pro Forma Revenues and Expenditures
8
(6)
(4)
(2)
-
2
4
6
8
10
12
14
Revenues$10.46b
Revenues $10.4b
Legacy exp. $6.9b
Legacy exp. $2.1b
Operating expenditures
$7.5b
Operatingexpenditures
$7.5b
Revenues $0.8b
Reinvestmentexp.
$1.7b
Expenditures $14.3b
Expenditures $11.2b
$3.9b deficit
Revenues $11.2b
(in
$b
illi
on
s)
Without Restructuring With Restructuring
Financial Summary of Reinvestment Initiatives – Ten-Year Total
-$1,000M
-$500M
$0M
$500M
$1,000M
$1,500M
$2,000M
$1,717.8M
-$841.1M
$876.7M
Additional Operating Expenditures
Fleet Reinvestment
Technology Infrastructure Reinvestment
Capital Expenditure Reinvestment
Reorganization Implementation Costs
Department Cost Savings Initiatives
Department Revenue Initiatives
$715.7M
$167.4M
$151.7M
$225.3M
$37.7M
-$358.2M
-$482.9M
Blight$420.0M
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10
Done:• Restructured balance sheet• Certain outsourcing• Public Lighting Authority• Great Lakes Water Authority
In Progress with good results:
• City service improvements
• Operating Land Bank• Blight demolition on-
going
Challenges:• Further outsourcing• Organizational restructuring• Continued population decline due
to structural and service disadvantages
• Ensuring the City stays on track
State of the City – Post-bankruptcy
Questions?
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