Detroit will be broke by December, says Joe Harris

[kraig]

Would Krispy Kreme suffer as a result?

You ain't right. LOL

[313WX]

Would Krispy Kreme suffer as a result?

Only if there was one close enough to the city for them to visit.

[kraig]

Well, well, well. It looks like somebody found some low hanging fruit.








July 14, 2009


Bing renegotiates Detroit sewage system bonds to save millions

By Zachary Gorchow
Free Press Staff Writer The City of Detroit has renegotiated $305 million in sewage system bonds to save the city $11.5 million a year, Mayor Dave Bing announced today.
The bank that had backed the bonds had its credit rating downgraded, triggering an interest rate increase for the city. The city remarketed the sewage system bonds to new investors at fixed interest rates. “This transaction represents a tremendous savings for the citizens of Detroit and all customers of the sewage system,� Bing said in a statement. “I commend our finance team for moving quickly to find a solution that saves our residents money in the short term and puts us in a more secure position going forward.�




This, by no means, solves the city's problems. But I am willing to give the guy credit for doing something. It never hurts to think.

[lilpup]

I suspect there are all sorts of nickel and dime things that have drained the coffers over the years just because people were too uninformed or lazy to do the active management the city needs. Another such example were the city-owned business rental properties where tenants were behind or in default yet the city was paying the utility bills.

[EastSider]

Well, well, well. It looks like somebody found some low hanging fruit.

July 14, 2009


Bing renegotiates Detroit sewage system bonds to save millions

By Zachary Gorchow
Free Press Staff WriterThe City of Detroit has renegotiated $305 million in sewage system bonds to save the city $11.5 million a year, Mayor Dave Bing announced today.
The bank that had backed the bonds had its credit rating downgraded, triggering an interest rate increase for the city. The city remarketed the sewage system bonds to new investors at fixed interest rates. “This transaction represents a tremendous savings for the citizens of Detroit and all customers of the sewage system,� Bing said in a statement. “I commend our finance team for moving quickly to find a solution that saves our residents money in the short term and puts us in a more secure position going forward.�




This, by no means, solves the city's problems. But I am willing to give the guy credit for doing something. It never hurts to think.

This article might need to be cross-posted to Crap Journalism in the D.

Unless the law changed, sewage and water department monies are completely separate from any city's general fund. They are not allowed to be intermingled willy-nilly under any circumstances.

How exactly does this move help the city's general fund deficit?

[kraig]

This article might need to be cross-posted to Crap Journalism in the D.

Unless the law changed, sewage and water department monies are completely separate from any city's general fund. They are not allowed to be intermingled willy-nilly under any circumstances.

How exactly does this move help the city's general fund deficit?

So saving 11.5 million dollars isn't worth anything to you? I stated that this doesn't solve the city's problems. However, it does demonstrate that things can be restructured to favor the city.

Part of the reason why water rates have risen so high for the metro area is because the city viewed the water revenue as such a seperate entity that no one seriously attempted to control the costs.

Hopefully, efforts to restructure will carry over to the general fund as well.

[EastSider]

So saving 11.5 million dollars isn't worth anything to you? I stated that this doesn't solve the city's problems. However, it does demonstrate that things can be restructured to favor the city.

Well, if those 11 and a half million dollars can't affect the general fund deficit, then they mean less to me than, say, dumping Cobo and knocking $15 million of the books. Those extra dollars can't put more police on the street, tear down any more decrepit homes or patch one more pot hole.

Part of the reason why water rates have risen so high for the metro area is because the city viewed the water revenue as such a seperate entity that no one seriously attempted to control the costs.

Huh? Water rates are driven by the costs to maintain the lines and improve the sewage system so we don't shit where we drink. There's also the not-so-small matter of federal court oversight of the system. Judge Feikens has been calling the shots on DWSD for longer than a lot of posters here have been alive.

[kraig]

Well, if those 11 and a half million dollars can't affect the general fund deficit, then they mean less to me than, say, dumping Cobo and knocking $15 million of the books. Those extra dollars can't put more police on the street, tear down any more decrepit homes or patch one more pot hole.



Huh? Water rates are driven by the costs to maintain the lines and improve the sewage system so we don't shit where we drink. There's also the not-so-small matter of federal court oversight of the system. Judge Feikens has been calling the shots on DWSD for longer than a lot of posters here have been alive.

Would you rather that the City keep paying the extra 11.5 million? In order to improve the lines and the sewer system, a loan was taken out. Shouldn't it be considered a good thing if the amount being paid back is less? Are you implying that Judge Feikens is setting the water rates?

[EastSider]

Would you rather that the City keep paying the extra 11.5 million? In order to improve the lines and the sewer system, a loan was taken out. Shouldn't it be considered a good thing if the amount being paid back is less? Are you implying that Judge Feikens is setting the water rates?

Show me where "the city" pays that extra money. Unless state law changed, those bonds are paid for with revenue from the DWSD, which is wholly separate from the city general fund.

Your question about the role of Judge Feikens make me suspect you are one of the youngin's who need to study up on their history of the federal suit against DWSD.

[kraig]

Show me where "the city" pays that extra money. Unless state law changed, those bonds are paid for with revenue from the DWSD, which is wholly separate from the city general fund.

Your question about the role of Judge Feikens make me suspect you are one of the youngin's who need to study up on their history of the federal suit against DWSD.

DWSD- Detroit Water & Sewerage Department. I know it's separate, but you do realize that the City has some responsibilities as owner of the system. If the city has made a move to manage the money owed by the system, that should be considered a good thing.

Maybe you should study up on current history. The Detroit City Council voted on the water rate increase, not Fiekens.

Why are you so down at an attempt of structural improvement of City Government?

[Locke09]

The City has gone from 19000+ employees at the beginning of the Kilpatrick administration to less than 14000 employees [[not counting about 500 grant funded employees). That is more than 25%, which already counts as massive layoffs in my opinion.

There will need to be more layoffs. But first, the city should at least:

a. Determine what services will no longer be provided and then target the layoffs for positions providing those services. The across-the-board layoffs don't make any sense to me when you have already cut every service area to the bone. You have to eliminate some services now. Which should they be?

b. Eliminate waste that is unrelated to labor costs: no non-critical projects should be undertaken when you are "broke"; hold vendors accountable for meeting deliverables within the contract budget as opposed to giving them millions more and they still don't deliver the agreed upon product; stop having contractors do jobs that you also have a city position for, either eliminate the contractor or eliminate the city position, etc.

Do the first two things and you have more credibility when you announce layoffs, coupled with wage cuts, coupled with benefits cuts, coupled with work rule changes, coupled with healthcare cost increases, and so on.

[EastSider]

Maybe you should study up on current history. The Detroit City Council voted on the water rate increase, not Fiekens.

Sigh...

"The City Council rejected a water and sewer increase Tuesday, a move that could push a U.S. District judge to unilaterally set higher rates for 4 million customers in 126 communities."

This was just from this past June, less than 4 weeks ago.

http://www.detnews.com/article/20090...906240346/1409

Judge Feikens has the ability under the lawsuit to raise or lower rates, regardless of what the council says or does. That he usually allows the council to vote does not mean that he must let them vote.

[Novine]

"Why are you so down at an attempt of structural improvement of City Government?"

What structural improvement? The bank that had backed the bonds had its credit rating downgraded so the city got out of that bank. Saving money is a good thing but it's not like the city made any major change to its own operations. As others have noted, the savings accrue to the DWSD. For the average city resident, this is going to have little impact on them, if DWSD even passes along the savings.

[kraig]

Eastside, as you're well aware, the City Council did indeed vote to raise the rates, not Feikens.

The entire article pretty much spoke to the need for the City to handle its responsibilities or someone else will.

The state also has the authority to place the City into receivership if the City does not do a better job of handling its finances. Therefore, it's in the City's best interest to handle it's finances better. The saving of the 11.5 million is an example that the City is attempting to do that.

What is the problem with the City trying to improve its structural integrity, which includes all of its assets?

[kraig]

"Why are you so down at an attempt of structural improvement of City Government?"

What structural improvement? The bank that had backed the bonds had its credit rating downgraded so the city got out of that bank. Saving money is a good thing but it's not like the city made any major change to its own operations. As others have noted, the savings accrue to the DWSD. For the average city resident, this is going to have little impact on them, if DWSD even passes along the savings.

Here's the point that you and Eastside aren't getting.

Because the City was looking, it saw an opportunity to save money and capitalized on it. Had the City not been looking for opportunities, it wouldn't have saved a dime. Downplay it all you want, but saving 11.5 million is a good thing. In fact, your attitudes towards the savings speaks volumes about the change in culture that is needed in the area. In what other city would people complain about saving 11.5 million dollars?

[E hemingway]

This $11.5 million Bing' administration says it saved the city is nice and quaint, but it doesn't matter. The city is in too deep of a whole to dig itself out of right now. Bing's people can negotiate and flail around all they want but the mold has been cast. The city will run out of money in a matter of months, if not weeks, and Robert Bobb will basically have the opportunity to be made King of Detroit if he wants it. When, it's not a question of if anymore, a receiver is appointed Bing, Cockrell, Watson and the rest of the city's political hierarchy will be relegated to Carla Scott status. This is Detroit. The finances are never as bad as they might seem. They are at least 10 times worse.

[EastSider]

Eastside, as you're well aware, the City Council did indeed vote to raise the rates, not Feikens.

The entire article pretty much spoke to the need for the City to handle its responsibilities or someone else will.

The state also has the authority to place the City into receivership if the City does not do a better job of handling its finances. Therefore, it's in the City's best interest to handle it's finances better. The saving of the 11.5 million is an example that the City is attempting to do that.

What is the problem with the City trying to improve its structural integrity, which includes all of its assets?

Grrr...

They voted for them only after reconsidering. A part of that reconsideration was acknowledgment of Feiken's ability to increase the rates without council's say. In fact, nearly every time the subject comes up, it's a Detroit version of kabuki theater. The DWSD presents the rate increase to council, they cluck around like a bunch of chickens for a day, the DWSD points out the judge can just order the increase, and Council passes the increase with some more clucking for the boobs about how they're trying to just help the little guy.

This action has nothing to do with the city's general fund deficit, which is precisely the deficit that will get an Emergency Financial Manager appointed for the city, and that is the reason I am saying "Big whoop" to juggling some stupid bonds.

[Novine]

Kraig, I give you credit for not being clueless so quit playing the role.

"The state also has the authority to place the City into receivership if the City does not do a better job of handling its finances. Therefore, it's in the City's best interest to handle it's finances better. The saving of the 11.5 million is an example that the City is attempting to do that.

What is the problem with the City trying to improve its structural integrity, which includes all of its assets?"

DWSD and "the City" are only nominally connected. For all of the waste at DWSD, it's not facing receivership and it provides the services to its customers at rates that are lower than most in the country [[contrary to an earlier comment you made). If and when the City of Detroit goes into receivership, the control and operation of DWSD will be unaffected. Continue to pretend it's otherwise. No one who understands the difference is fooled by the act.

[kraig]

Grrr...

They voted for them only after reconsidering. A part of that reconsideration was acknowledgment of Feiken's ability to increase the rates without council's say. In fact, nearly every time the subject comes up, it's a Detroit version of kabuki theater. The DWSD presents the rate increase to council, they cluck around like a bunch of chickens for a day, the DWSD points out the judge can just order the increase, and Council passes the increase with some more clucking for the boobs about how they're trying to just help the little guy.

This action has nothing to do with the city's general fund deficit, which is precisely the deficit that will get an Emergency Financial Manager appointed for the city, and that is the reason I am saying "Big whoop" to juggling some stupid bonds.

Like I said, there needs to be a change in the culture. If you think like a loser, you're always going to lose.

[EastSider]

Like I said, there needs to be a change in the culture. If you think like a loser, you're always going to lose.

How is twiddling with a few bonds a "change in the culture?" The way I see it, this is just window dressing, throwing a rug over the big hole in the living room floor, hoping that nobody steps in the center and falls through.

[kraig]

How is twiddling with a few bonds a "change in the culture?" The way I see it, this is just window dressing, throwing a rug over the big hole in the living room floor, hoping that nobody steps in the center and falls through.

When I said "change in the culture", I was referring to You and Novine's way of thinking. Apparently, that went over your head.

That sound you hear is everyone else that read it and got it laughing at you right now.

[kraig]

Kraig, I give you credit for not being clueless so quit playing the role.

"The state also has the authority to place the City into receivership if the City does not do a better job of handling its finances. Therefore, it's in the City's best interest to handle it's finances better. The saving of the 11.5 million is an example that the City is attempting to do that.

What is the problem with the City trying to improve its structural integrity, which includes all of its assets?"

DWSD and "the City" are only nominally connected. For all of the waste at DWSD, it's not facing receivership and it provides the services to its customers at rates that are lower than most in the country [[contrary to an earlier comment you made). If and when the City of Detroit goes into receivership, the control and operation of DWSD will be unaffected. Continue to pretend it's otherwise. No one who understands the difference is fooled by the act.

The same Mayor that's over the rest of the City departments is over the Water Department. You do realize that don't you? So if that same mayor applies due diligence to the water department there's a chance that he will apply that same due diligence to the general fund operations. If you ever paid attention one of the first things I stated was that this, by no means, solves the city's problems. However, it is a sign that things may move in a better direction than they have.

And if you believe that the City fo detroit will go into receivership and the Water System will not be touched, well, which bridge can I sell you?

The Ambassador
The DRIC
Oh, you're old school, how about the Brooklyn?

[EastSider]

When I said "change in the culture", I was referring to You and Novine's way of thinking. Apparently, that went over your head.

That sound you hear is everyone else that read it and got it laughing at you right now.

I'm glad you think the city's current situation is a laughing matter.

The city needs to cut spending from the general fund and cut spending now, to the tune of $300 million. Redoing bonds that aren't paid for with general fund monies is not going to end the city's fiscal crisis, regardless of whether you think that type of thinking is correct or not, whether it's part of the "new" or "old" culture.

[Novine]

"The same Mayor that's over the rest of the City departments is over the Water Department. You do realize that don't you? So if that same mayor applies due diligence to the water department there's a chance that he will apply that same due diligence to the general fund operations."

Who in the Mayor's office applied this due diligence to DWSD? What personnel changes at DWSD made this possible? The simple explanation is that when the ratings change was made, DWSD didn't have any choice but to remarket those bonds. Bing can take credit for it happening on his watch but it has nothing to due with anything that came from the Mayor's office. Proof? The remarketing effort was started in March.

http://dwsdupdate.blogspot.com/2009/...rket-debt.html

http://www.bondbuyer.com/article.htm...0903167PBHYP5V

Now who's laughing?

[EastSider]

Oh, your old school, how about the Brooklyn?

I don't own a school, and I've never heard of one around here called Brooklyn. There's a street named Brooklyn, was there a school there once upon a time?

The same Mayor that's over the rest of the City departments is over the Water Department. You do realize that don't you? So if that same mayor applies due diligence to the water department there's a chance that he will apply that same due diligence to the general fund operations. If you ever paid attention one of the first things I stated was that this, by no means, solves the city's problems. However, it is a sign that things may move in a better direction than they have.

Due dilligence? From Bing? Is that a fancy-pants term for "sleeping?" His due dilligence is done. He simply needs to cut, cut, cut.

If this paltry sum of money from an area that has nothing to do with general fund deficit is a sign of things to come, then we shouldn't expect very much.

And if you believe that the City fo detroit will go into receivership and the Water System will not be touched, well, which bridge can I sell you?

How would the water system play into repairing the general fund deficit in your eyes?