Download - Detroit Creditor Proposal
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EXHIBIT B
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CITYOFDETROIT
PROPOSALFOR
CREDITORS
EXECUTIVESUMMARY
JUNE14,2013
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This proposal is based on numerous projections and assumptions
concerning future uncertain events including estimates of tax revenues
and forecasts of future business and economic conditions in the Cit all
of which are beyond the control of the City. Actual results may differfrom the assumptions and projections presented herein, and such
differences could be material.
Additional data are being gathered or developed, and various critical
financial and operational analyses remain in process. Thus, this
proposal remains subject to material change.
OFFICEOFTHEEMERGENCYMANAGER
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TableofContents
I. DetroitFacesStrongEconomicHeadwinds 3
II. KeyObjectivesforaFinancialRestructuringandRehabilitationofDetroit 33
III. CurrentFinancialStatus 34
IV . T eC tyHasTa enAct ontoA ressItsF nanc a C a enges 39
V. RestructuringandReinvestinginCityGovernment 41
.
VII. TenYearProjections(GeneralFundOnly) 47
VIII. Restructurin Pro osal 50
IX. CalendarandContacts 61
OFFICEOFTHEEMERGENCYMANAGER
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I. DetroitFacesStrongEconomicHeadwinds.
.
,
Detroit(the"City")hasexperiencedchangesthathaveadverselyaffectedtheeconomiccircumstancesoftheCityanditsresidents.
350,000
300,000
325,000
275,000
,
2000 2001 2003 2005 2007 2009 2011 2012
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I. DetroitFacesStrongEconomicHeadwinds.
30
UnemploymentRateinDetroit
20
25
10
15
5
2000 2001 2003 2005 2007 2009 2011 2012
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I. DetroitFacesStrongEconomicHeadwinds.
.- PropertyTaxes. Propertytaxrevenueshavedecreasedbyapproximately19.7%
overthepastsixyearsasaresultofdecliningassessedvalues($1.6billionfrom2008to2012)andlowercollectionrates(from76.6%in2008to68.3%in2012).
- IncomeTaxes. Incometaxrevenueshavedecreasedby$91millionsince2002(approximately
30%)
and
by
$44
million
(approximately
15%)
since
2008.
The
primarycauseofthesedecreaseshasbeenhighunemployment.
- TheCityiscurrentlylevyingalltaxesatornearstatutorymaximumrates.
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I. DetroitFacesStrongEconomicHeadwinds.
.
ComparativeTaxBurden.- PerCapitaTaxBurden. DetroitspercapitataxburdenonCityresidentsisthe
highestinMichigan. Thistaxburdenisparticularlyseverebecauseitisimposedonapopulationthathasrelativelylowlevelsofpercapitaincome.
- ResidentIncomeTax. TheincometaxburdenonDetroitresidentsisgreaterthanthatofresidentsinthesurroundingarea. TheCity'sincometax 2.4%forresidents,1.2%fornonresidentsand2.0%forbusinesses isthehighestinMichigan.
- PropertyTaxes. Detroitresidentspaythehighesttotalpropertytaxrates(inclusive
ofproperty
taxes
paid
to
all
overlapping
jurisdictions;
e.g.,
the
City,
the
State,
Wayne
Count ofthose aidb residentsofMichi ancitieshavin a o ulationover50,000. Thetotalpropertytaxrate(includingpropertytaxesassessedbytheCity,theStateandvariousspecialauthorities)imposedonDetroithomeownersisapproximately67.07mills;forbusinesses,thetotalpropertytaxrateisapproximately85.35mills.
- Atmore
than
19.95
mills,
the
City's
property
tax
rate
for
general
operations
is
closetothestatutorymaximumof20.00mills.
- UtilityUsersTax. DetroitistheonlycityinMichiganthatleviesanexcisetaxon
OFFICEOFTHEEMERGENCYMANAGER
.
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I. DetroitFacesStrongEconomicHeadwinds.
ContinuingBudgetDeficits.
Excludingtheeffectofrecentdebtissuances(e.g.,$75millioninFY2008,$250million inFY2010and$129.5millioninFY2013)thatfundedtheCity'soperatingdeficits,theCity'saccumulatedgeneralfunddeficithasgrowncontinuouslyoveranextendedperiod.
AttheendofFY2012,theCit 'saccumulated eneralfunddeficitwas$326.6million.
OFFICEOFTHEEMERGENCYMANAGER
IfnotfortheCitysrecentdebtissuances,theprojectedaccumulateddeficitforFY2013wouldhavebeenapproximately$700million.
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I. DetroitFacesStrongEconomicHeadwinds.
.
.
formofpaymentdeferralsandcostcutting),theCitywouldhaverunoutofcashbeforetheendofFY2013.
TheCityhadnegativecashflowsof$115.5millioninFY2012,excludingtheimpactofprocee s roms or erm orrow ngs. n arc , oavo runn ngou o cas , e
Cityborrowed
$80
million
on
asecured
basis
(of
which
the
City
spent
$50
million
inFY2012).
TheCityisprojectingtohavepositivecashflowsof$4.0millioninFY2013aftere err ngapprox mate y m ono currentan pr oryearpens oncontr ut ons
andotherpayments.
Absentinterventionand/orrestructuring,theCityisprojectingtohavenegativecashflows
of
$198.5
million
in
FY
2014.
AsoftheendofMay2013,theCityhad$68millionofcashbeforepropertytaxdistributions,buthadoutstandingdeferralsandamountduetootherfundsandentitiesofapproximately$216million. Theseareeffectivelyborrowingsandmustberepaid.
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I. DetroitFacesStrongEconomicHeadwinds.
TheCityisnotmakingitspensioncontributionsastheycomedue. TheCityhasdeferredpaymentofitsyearendPoliceandFireRetirementSystem("PFRS")contributions(andfinancessuchdeferralsatarateof8%). AsofMay2013,the
y a e erre approx ma e y m on npens oncon r u onsre a e o
currentand
prior
periods
and
will
defer
approximately
$50
million
on
June
30,
2013
forcurrentyearPFRS pensioncontributions. Therefore,byfiscalyearend,theCitywillhavedeferredover$100millionofpensioncontributions.
e tyw notma et esc e u e . m onpayments ueon tspensionrelatedcertificatesofparticipationonJune14,2013.
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I. DetroitFacesStrongEconomicHeadwinds.
FY2013
Forecasted
Cashflow
to
Year
End
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I. DetroitFacesStrongEconomicHeadwinds.
FY2014
Forecasted
Cash
Flow
to
Year
End
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I. DetroitFacesStrongEconomicHeadwinds.
TheCityMustReduceItsHighCrimeRates.
Severely Inadequate.
. .populationover200,000. TheCity'sviolentcrimerateisfivetimesthenationalaverage.
EMSandDetroitFireDepartment("DFD")responsetimesareextremelyslowwhen, .
TheCityMustProvideFunctioningStreetLights.
AsofApril2013,approximately40%oftheCity'sstreetlightswerenotfunctioning.The
lights
that
are
functioning
are
scattered
across
an
outdated
population
footprint
(andthusarenotfocusedtomeetthecurrentpopulation'sactualneeds).
TheCityMustOverhaulItsDysfunctionalOperations.
PoliceDepartment("DPD").
- ver e as veyears, e as a ve eren po cec e s,a av ngvarying
approaches
to
DPD's
operations.
- DPD'sefficiency(responsetimes),effectiveness(caseclosurerate,crimereduction)andemployeemoraleareextremelylow.
OFFICEOFTHEEMERGENCYMANAGER
- DatadrivenpolicinghasnotbeenfullyadoptedwithinDPD.
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I. DetroitFacesStrongEconomicHeadwinds.
- , .extremelyhigh.
- TheDPD'sextremelylow8.7%caseclearancerateisdrivenbytheDPD'slackofacasemanagementsystem,lackofaccountabilityfordetectives,unfavorableworkru es mpose yco ec ve arga n ngagreemen san a g a r onra e n e
investigative
operations
unit.
- TheDPD'smanpowerhasbeenreducedbyapproximately40%overthelast10yearscausingconstantstrainontheorganization;theDPDneedstoevaluateappropriateun ormsta ng eve s.
- Communitypolicingeffortsareunderfunded,uncoordinatedandhavebeendeemphasizedbytheDPD.
Assessor'sOfficeandPro ert TaxDivision.
- TheCitylacksastaterequiredLevelIVAssessorandcurrentlyhasaformeremployeecontractorintheposition,whosecontractexpiresinJune2013. Duetoinadequatecompensation,amongotherthings,therearenoavailablecandidatesto
.
- TheAssessorsOfficehasapproximately15,000parcelsperemployee. TheStaterecommends4,000parcelsperemployee.
OtherDepartments.
OFFICEOFTHEEMERGENCYMANAGER
- ManyotherCitydepartmentsfunctionsuboptimallyandinefficiently.
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I. DetroitFacesStrongEconomicHeadwinds.
.
Thereareapproximately(i)78,000abandonedandblightedstructuresintheCity,nearlyhalfofwhichareconsidered"dangerous"and(ii)66,000blightedandvacantlotswithintheCitylimits.
ThenumberofCityparksisdwindling,andmanyareinpoororfairconditionasa
resultof
neglect
due
to
lack
of
funding.
- Theclosureof210parksinthe200809fiscalyearreducedtheCity'sparkportfolioby66% from317parksto107parks.
Approximately70superfundsiteshavebeenestablishedinDetroit.
TheCity'selectricitygridhasnotbeenadequatelymaintainedandisdeteriorating.
TheCity'sfirestationsareoldandarenotadequatelymaintained. ThevehiclesandequipmentemployedbytheCity'spolice,fire,EMSand
transportationpersonnelareaging,poorlymaintainedandlackadequateinformationtechnology.
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I. DetroitFacesStrongEconomicHeadwinds.
FireDepartment.
Equipment for Years.
squads(specializedrescuevehicles);(iv)onehazardousmaterialapparatus;(v)one
TACunit
(a
mini
pumper)
and
(vi)
36
ambulances
and
other
light
vehicles.
DFD'sfleethas"manymechanicalissues,"containsnoreservevehiclesandlacks.
- TheApparatusDivision'smechanictovehicleratioof1:39(oncestaffedwith63people;currently26)resultsinaninabilitytocompletepreventativemaintenance
onschedule.
- Detroitfirefightersfrequentlyoperateshorthandedduetoalackofserviceableequipment.
EMSFleet.
- ' ,
werein
service.
- SomeoftheCity'sEMSvehicleshavebeendriven250,000to300,000miles,andbreakdownfrequently.
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I. DetroitFacesStrongEconomicHeadwinds.
.
AgeofPoliceCars
- TheDPDoperateswithan"extremelyoldfleet"of1,291vehicles. MostDPDpolicecruiserslacknecessaryinformationtechnology.
- Amajorityofvehiclesinthefleetremaininservicebeyondanormalthreeyearreplacement
cycle.
Operating
with
an
aged
fleet
drives
up
maintenance
costs.
Facilities
- e asnot nveste norma nta ne ts ac ty n rastructure ormanyyears,contributingtolowemployeeandcitizenmorale.
InformationSystems
Challen es enerall :
- Oldandobsoletetechnologyassetsandapplicationsmustbeupgraded.
- ITinfrastructureisnotintegratedwithinDepartments(e.g.,policeprecinctsanddistrictscannotshareinformationacrossITsystems)orbetweendepartmentsandunc ons e.g., e ono n egra on e weencore y nancesys eman
Departmentlevel
systems).
- City urgentlyneedstoupgradeorreplacethefollowingITsystems,amongothers:payroll;financial;budgetdevelopment;propertyinformationandassessment;
OFFICEOFTHEEMERGENCYMANAGER
incometax;andDPDoperatingsystem.
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I. DetroitFacesStrongEconomicHeadwinds.
,- DPD,DFDandEMSinformationtechnologysystemsareobsolete;vendorsdonot
providefullsupport;corefunctionsaresporadic.
- DPDhasnoITsystemsforjailmanagement,electronicticketingandactivitylogs.DPDvehicleslacknecessaryITinfrastructure.
PayrollSystem- TheCityusesmultiple,nonintegratedpayrollsystems. Amajorityofemployees
toclearlytrack,monitororreportexpendituresbycategory.
- ThecostofpayrolladministrationfortheCityissignificantlyhigherthanfor
comparableentities
almost
3.5
times
more
costly
than
other
public
sector
, .
IncomeTaxDivision
- Incometaxcollectionanddatamanagementarehighlymanual.
- ' ,
tono
automation
capability
and
is
"catastrophic"
per
an
IRS
audit
completed
in
July2012.
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I. DetroitFacesStrongEconomicHeadwinds.
,- OraclebasedFinancialReportingsystemwasimplementedin1999. Itisnotbeing
utilizedtoitsfullcapabilitiesandisnolongersupportedbyitsmanufacturer.
- Approximately70%ofjournalentriesarebookedmanually.
GrantManagementSystem
- Granttrackingsystemsarefragmented. Thus,theCityisunabletocomprehensivelytrackcitywidegrantfundsandstatus.
- rantreport ng snotstan ar ze ,suc t att e ty suna etopreventdisallowedcosts.
Permitting
- TheBuildin s Safet En ineerin andEnvironmentalDe artment'ss stemforlicensingandpermittingismorethantenyearsoldandneedstobeupgraded.
- TheFireMarshallDivision'ssystemforinspectionsandpermittingismorethan20yearsoldandneedstobereplaced.
- urren n orma on ec no ogysys em e c enc es ea o o enec s nperm invoicing
and
collection
of
fees.
DepartmentofTransportation. DDOTfleetisagedandmaintenanceisconsistentlydeferred;approximatelyonethirdofDDOTfleetisoutofservice.
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I. DetroitFacesStrongEconomicHeadwinds.
TheCityownedMisterskypowerplanthasbeenidleforapproximately23years,buthasnotbeendecommissioned.Inaddition,theCityhas31substationsthatwouldneedtobedecommissioned.TheCityisintheprocessofobtainingestimatesfor
ecomm ss on ngcos s.
Approximately40%ofDetroit's88,000streetlightsarenotfunctioningdue,inlargepart,todisrepairandneglect;outagesexistonbothDTEEnergyCompany("DTE")andPLDpoweredlights.
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I. DetroitFacesStrongEconomicHeadwinds.
BalanceSheetLiabilities
TheCityestimatesthat,asofthecloseofits2013fiscalyear,theCitywillhaveliabilitiesreflectedonitsbalancesheetofapproximately$9.05billion,including:
.
- $5.85billioninspecialrevenueobligations;
- $1.43billioninpensionrelatedCertificateofParticipation("COPs")liabilities;
- $343.6millioninmarkedtomarketswapliabilitiesrelatedtoCOPs(asofay , va uat on ;
- $1.13billioninunlimitedandlimitedtaxgeneralobligationbondliabilitiesandnotesandloanspayable;and
- 300millioninotherliabilities.
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I. DetroitFacesStrongEconomicHeadwinds.
OPEBLiabilities.
- Unfundedotherpostemploymentbenefit ("OPEB")liabilitiesincreasedfrom$4.8 billionto$5.7 billionfromJune 30, 2007throughJune30,2011(themostrecentactuarialdataavailable). 99.6%oftheCity'sOPEBliabilitiesareunfunded.
- AsofJune30,2011(themostrecentlypublishedactuarialvaluation),therewere19,389retireeseligibletoreceivebenefitsundertheCity'sOPEBplans. ThenumberofretireesreceivingbenefitsfromtheCityisexpectedtoincreaseovertime.
- WeilerClassOPEBBenefits.
- InJuly2006,theCitymadeanumberofunilateralchangestothehealthcare
benefitsfor
unionized
police
and
firefighter
retirees.
Alan
Weiler
filed
aclass
, collectivebargainingagreements.
- TheCityandtheWeiler classsettledbeforetrial,andthecourtenteredaConsentJudgmentapprovingtheparties'settlementagreement.
- The
Weiler class
retirees/beneficiaries
currently
cost
the
City
approximately
$75millionperyear,representingover40%ofretireebenefitscostsundertheHealthandLifeInsurancePlan.
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I. DetroitFacesStrongEconomicHeadwinds.
- TheCity'sreportedpensionUAAL(basedon2011actuarialvaluations)of
$639,871,444issubstantially understated. Furtheranalysisusingmorerealisticassumptions(includingbyreducingthediscountratebyonepercentagepoint)sugges s a pens on w eapprox ma e y . onaso une , .
- UAALundertheCity'stwopensionsystems theGeneralRetirementSystem("GRS")andthePFRS increasedbyover$1billionbetweenJune30,2007andJune 30, 2011,even(i)usingactuarialassumptionsusedtocalculate2011UAALand
a tercons erat ono t econtr ut ono t e sprocee s n an .
- ForthefiveyearperiodendingonJune30,2012,pensionpaymentsandcostsofadministrationhaveexceededcontributionsandinvestmentincome,resultingin
liquidationof
pension
trust
principal.
Continuing
on
this
path
will
eventually
lead
tothepensionplansinsolvency.
Contribution/Investment
Income
GRS $1,601,193,045 ($60,113,101) $1,661,306,146
PFRS $1,445,581,026 ($127,803,339) $1,573,384,365
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I. DetroitFacesStrongEconomicHeadwinds.
TheCityestimatesthat,asoftheendofFY2013,itwillhave:
- $5.34billioninoutstandingprincipalamountofrevenuebonds;and
- .
Therevenuebondsandtherevolvingloansarerelatedtothefollowingfunds:
- SewageDisposalFund
- $2.82billioninoutstandingprincipalamountofnotesmaturingJuly1,2013throughJuly1,2039,asofJune30,2013.
- $472.8millioninoutstandingprincipalamountofstaterevolvingloans,asofJune30,2013.
- ,expenses,pledgedtosecurepaymentofprincipalandinterest.
- Netsystemrevenuesof$227,447,337versusdebtservicerequirementsof$199,990,125inFY 2012.
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I. DetroitFacesStrongEconomicHeadwinds.
- - $2.52billioninoutstandingprincipalamountofvariousseriesofnotesmaturing
July1,2013throughJuly1,2041,asofJune30,2013.
- $21.4millioninoutstandingprincipalamountofstaterevolvingloans,asofJune30,2013.
- Substantiallyall
of
the
revenues
of
the
City's
water
system,
net
of
operating
expenses,pledgedtosecurepaymentofprincipalandinterest.
- , , $153,441,666inFY 2012.
- AutomobileParkingFund
- $9.3 millionin
outstanding
principal
amount
of
Detroit
Building
Authority
Revenue
RefundingBonds:ParkingSystem,Series1998AmaturingJuly1,2010throughJuly1,2019,asofJune 30, 2013.
- Substantiallyallrevenuesoftheparkingsystem,netofoperatingexpenses,pledgedtosecurepaymentsofprincipalandinterest.
- Netsystem
revenues
of
$2,708,223
versus
debt
service
requirements
of
$2,923,454inFY 2012.
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I. DetroitFacesStrongEconomicHeadwinds.
GOBonds. TheCityestimatesthat,asofthecloseofFY2013(i.e.,June30,2013),itwillhave$1.01 billioninoutstandingprincipalamountoflimitedandunlimitedtaxgeneralobligationbonds,consistingof:
- $469.1millioninoutstandingprincipalamountofunlimitedtaxgeneralobligation
(UTGO)bonds
maturing
from
April
1,
2013
through
November
1,
2035.
- $100millionoftheforegoingbondsaresecuredbyasecondlienondistributablestateaid.
- $540.3 millioninoutstandingprincipalamountoflimitedtaxgeneralobligation(LTGO)bondsmaturingApril1,2013throughNovember1,2035.
- Issuanceof
LTGO bonds
do
not
require
voter
approval.
They
are
payable
from
.
- $249.8millionoftheLTGObondsaresecuredbyafirstlienondistributablestateaid. $129.5millionoftheLTGObondsaresecuredbyathirdlienondistributablestateaid.
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I. DetroitFacesStrongEconomicHeadwinds.
. , , ,have$121.5millioninotheroutstandinginstallmentnotesandloanspayablerelatedtovariouspublicimprovementprojects.
- $87.8millioninnotespayable(whichnoteswereissuedinconnectionwiththe" " " "ec on oan uaran ee rograman aresecure y u ure oc ran revenues).
- $33.7millioninloanspayable($33.6millionofwhichisanoninterestbearingunsecuredloanpayabletotheDowntownDevelopmentAuthorityasgeneraloperat ng un s ecomeava a e .
OnAugust23,2012,theCityissued$129.5millionofLTGO bondsata$9.1 millionpremium(generating$137millioninproceedsafterissuancecosts)inparttodefease
shortterm
bonds
issued
March
2012.
The
remaining
proceeds
of
these
issuances
were
setasidewithatrusteebankinanescrowaccounttoprovidefundsforreformsandliquidityinFY 2013. Thecurrentamountoftheescrowisapproximately$80million.
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I. DetroitFacesStrongEconomicHeadwinds.
- In2005,servicecorporationsestablishedbytheGRSandPFRScreatedatrustthat
issuedtheCOPs.TheproceedsoftheCOPswerecontributedtotheCityspensiontrusts.
- PrincipalandinterestontheCOPsispayablesolelyfrompaymentsmadebytheCity
tothe
service
corporations
pursuant
to
service
contracts.
- TheCityestimatesthat,asofthecloseofFY2013,thefollowingamountswereoutstandingundertheCOPs:
- $480.3millioninoutstandingprincipalamountof$640,000,000CertificatesofParticipationSeries 2005AmaturingJune15,2013through2025;and
- $948.54 millionin
outstanding
principal
amount
of
$948,540,000
Certificates
, .
- TheCityhasidentifiedcertainissuesrelatedtothevalidityand/orenforceabilityoftheCOPsthatmaywarrantfurtherinvestigation.
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I. DetroitFacesStrongEconomicHeadwinds.
.- InconnectionwiththeCOPs,theCityenteredintoeightpayfixed,receivevariable
interestrateswapseffectiveasofJune 12, 2006havingatotalnotionalamountof$800million.
- Recentvaluationsestablishthenegativefairvalueoftheswapsatapproximately
$343.6million
(as
of
May
31,
2013).
- January2009 TheCityreceivednoticefromtheswapcontractcounterpartiesthatdowngradingoftheCOPsandcertainswapinsurerswouldconstitutean"AdditionalTerminationEvent"undertheswapcontractsifnotcured.
- June2009 TheCityandtheswapcontractcounterpartiesagreedonanamendmenttotheswapagreements,eliminatingtheAdditionalTerminationEventand
the
otential
for
an
immediate
demand
for
a ment.
Pursuant
to
the
amendment,theswapcounterpartieswaivedtheirrighttoterminationpayments,andtheCityagreedto:
- directcertainwageringtaxrevenuestoatrustascollateralforthequarterly
a mentsowin totheswa counter arties;
- increase
the
interest
rate
of
the
swap
agreements
by
10
basis
points
effective
July1,2010;and
- includenewterminationevents,includingifCOPratingswerewithdrawn,
sus endedordown raded.
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I. DetroitFacesStrongEconomicHeadwinds.
- Event;theCityandtheswapcounterpartiesareinnegotiationsregardingtheTerminationEvent.
- March2013 AppointmentofEmergencyManagerconstitutesaneventofdefaultr gger ngano er erm na on ven .
- Althoughthisproposalreflectstreatingtheswapobligationsasspecialrevenuedebtsecuredbythewageringtaxrevenues,thattreatmentisstillbeingreviewedbytheEmergencyManager.
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I. DetroitFacesStrongEconomicHeadwinds.
.
TheCityestimatesthat,asoftheendofFY2013,theCitywillhave$300millioninotherliabilitiesoutstanding.
AsofJune30,2012,theCityowedatleast$264.6millioninotherliabilities,consistingprimarilyof:
- $101.2millioninaccruedcompensatedabsences,includingunpaid,accumulatedvacationandsickleavebalances;
- ' .
- $63.9millioninclaimsandjudgments,includinglawsuitsandclaimsotherthanworkers'compensationclaims;and
- $13.0millionincapitalleasesandaccruedpollutionremediation.
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I. DetroitFacesStrongEconomicHeadwinds.
TheCityisorwasapartyto48collectivebargainingagreements(CBAs)andhasmadegreatstridesundertheConsentAgreementinreducingcostsimposedbyitsnumerousactiveandexpiredCBAsbetweentheCityandvariouslabororganizationsrepresenting
yemp oyees,manyo w c a eenamen e y n eres ar ra onawar s ssue byarbitratorsappointedpursuanttoPublicAct312. UndertheConsentAgreement,theCity
has
unilaterally
implemented
City
Employment
Terms
("CETs"),
which
were
approved
bytheFinancialAdvisoryBoard(the"FAB")appointedbytheGovernor,theTreasurer,. ,
substantialpercentageoftheCity'semployeesarenotgovernedbycurrentCBAs,andmanyareworkingunderCETtermsandconditionsofemploymentand/orthosetermsandconditionsimplementedorestablishedthroughstatutoryinterestarbitrations.
,workforceintheformofbudgetrequiredfurloughdays("BRF"),wagereductionsandreductionsinotherwagerelateditems,suchasvacationdays,sickdays,longevitypaymentsandovertimerules.TheCityimplementedBRFsequivalentto10% ofwages
.
August 2012,as
part
of
the
CET
implementation,
BRFs
were
eliminated
for
non
uniform
employeesandreplacedwithapermanent10%wagereduction.AdditionalBRFswereimplementedinFebruary2013affectingcertainnonuniformedemployees.
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I. DetroitFacesStrongEconomicHeadwinds.
("DPOA")membersinAugust2012. DPOAchallengedtheCETsaspartofanAct312arbitrationprocess;adecisioninthatarbitrationreducesthe10%wagereductionto5%effectiveJanuary2014.
e s, mp emen e ona un onsw con rac sexp re onor e ore une , ,alsoincludedcompensationreductions,asfollows:
- Freezingsickleavebanksandeliminatingreservesickleaveaccrual;
- Eliminatingsicktimecashpayoutsforfutureearnedtime;
- Eliminatingtheabilitytoreinstatefurloughdays;
- Eliminatingthe$3perdayallowancefordailycarusage;
- Eliminatingfourtosixannualbonusvacationdays;and- Reducingvacationaccrualto160hoursfrom320hours.
ThefollowingadditionalCETchangeswereimplementedonDPOAmembers:
- Limitingpaidtimeforcourtiflessthantwohours;
- Eliminatingeducationalreimbursement;
- Requiring80hourstobeworkedinthepriorworkperiodtobeeligibleforovertime;
- Changingpaymentofholidayearnings;
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I. DetroitFacesStrongEconomicHeadwinds.
- - Eliminatingtheoptiontoreceivepayforcourtandreturningtobankingthefirst
60hoursofcourttime;
- Eliminatingbonusvacationdays;and
- Delayingseparationpayments.
UnilaterallyimplementedCETsimposednumerousconcessionsonCityemployees,includingfreezing,reducingoreliminatingactiveemployeebenefits,reducingor
.alsonegatedseniorityprotectionsinvariousCBAsbyexpandingmanagementrights,modifyingmethodsandprocessesbywhichworkisperformed,changingshifts,hoursofoperationandovertimeprocedures;andrevisingoreliminatingjobclassifications. Inaddition
to
concessions
im osed
b
the
CETs
in
some
cases
and
as
noted
above
concessionshavebeengrantedthroughstatutoryinterestarbitrationprocesses.
Theselaborcostconcessionshavenotbeenuniformlyappliedtoallbargainingunits,andsomeCityemployeeshavenotbeenaffectedbythesemeasures. Therestructuringplan
(aswell
as
across
unrepresented
employees)
and
that
the
impact
of
these
concessions
on
employeesaremitigatedtotheextentpossible.
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III. CurrentFinancialStatus
($inmillions) Fiscalyearendedactual Prelim.
2008 2009 2010 2011 2012 2013
Totalrevenues 1,397.7$ 1,363.3$ 1,291.0$ 1,316.8$ 1,196.9$ 1,121.9$
Operatingexpenditures (1,111.1) (1,025.3) (964.7) (887.5) (857.1) (692.0)
Legacyexpenditures (414.6) (462.0) (397.9) (486.1) (461.6) (477.3)
Defi ci t(excl .fi nanci ngproceeds ) (127.9) (124.1) (71.7) (56.9) (121.8) (47.4)
Financingproceeds 75.0 250.0 137.0Totalsurplus(deficit) (52.9)$ (124.1)$ 178.3$ (56.9)$ (121.8)$ 89.6$
AccumulatedunrestrictedGeneralFunddeficit 219.2$ 331.9$ 155.7$ 196.6$ 326.6$ 237.0$
TheCityhasmadesignificantprogressdecreasingoperatingcosts;however,revenueshavedeclinedmorequicklyandlegacycostshaveincreased.
,revenuesfromFY 2008toFY2012byanaverageof$100millionannually.
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III. CurrentFinancialStatus
.- CityhasconsistentlydeferredyearendPFRS contributionsbyusingapaymentplan
financingarrangementincludingaccrualof8%interest(~$50millionforFY2012)
HealthBenefits Retiree.
- ThetotalcostofhealthcarebenefitsCitywideinFY2012wasapproximately
$275million,
of
which
approximately
$177 million
related
to
retirees.
- TheGeneralFundsportionofhealthcarecostsinFY2012wasapproximately, .
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III. CurrentFinancialStatus
TheCityHasLimitedOptionsforFurtherRevenueGenerationand,intheAbsenceofaComprehensiveFinancialRestructuring,CostSavingMeasures.
,Budget Deficits Will Continue for the Foreseeable Future.
Legacyobligationscontinuetoincrease;
Limitedornoaccesstodebtcapitalmarkets; Diminishing,ifany,returnsfromfurthertaxincreases;and
Minimalpotentialforfurtherpayrollrelatedreductions.
AbsentStructuralChanges,theCity'sAccumulatedDeficitisExpectedtoGrowtoUnprecedentedLevels.
' , currentlevelof$326.6 milliontoover$1.35billionbyFY 2017.
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IV. TheCityHasTakenActiontoAddressItsFinancialChallenges
Since2011,theCityhasreduceditsheadcountbymorethan2,700employees(from12,302 employeesasofcloseofFY2010toapproximately9,560asofMay31,2013).
TheCity'sheadcountreductionshaveresultedinannualsavingsofover$100 million.ReductionsofLaborCoststhroughImplementationofCityEmploymentTerms("CETs")
ImplementationoftheCETsprovidesforanestimated$102millioninannualsavings.RevenueGeneratingInitiatives
IncreasedCorporateTaxRate. InJanuary2012,theCity'scorporateincometaxratewasraisedto2.0%from1.0%. Thisincreasedratewasprojectedtogenerateanestimated$6 millioninadditionalannualrevenue.
EnhancedTaxCollectionInitiatives. TheCit hasim lemented andisim lementin initiativesdesignedto(i)improvecollectionofpastduetaxesand(ii)enhancecollectioneffortsonaprospectivebasis. Theseeffortstoenhancecollectionoftaxescouldgenerateanestimated$13millioninadditionalannualrevenue.
' . ,
increased
its
rates
to
more
closely
align
with
market
rates/eliminate
practice
of
chargingcustomerslessforpowerthantheCityitselfwaspaying. IncreasedPLDratescouldgenerateanestimated$9 millioninadditionalannualrevenue.
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IV. TheCityHasTakenActiontoAddressItsFinancialChallenges
ReductionsinVendorCosts. TheCityisimplementinganinitiativetoreduceitsvendorrelatedcostsby10%. Reductionsinvendorcostsareexpectedtosaveanestimated$10 millionannually.
ReductioninSubsidytoDDOT. In2012,theCityundertookstepstoimprovethe
efficiency
of
the
Detroit
Dep't
of
Transportation
(e.g.,
through
route
rationalization),
therebyreducingthesubsidyfromtheCity'sGeneralFundtotheDDOTenterprisefundbyapproximately$15 millionannually.
DeferredCapitalExpenditures
TheCityhasdeferredcapitalexpenditures.
- Average
aggregate
capital
outlays
for
the
fiscal
years
2008
2012
were
only
. .2003 2007were$151.94million.
- Forfiscalyears2014 2023,itisestimatedthatGeneralFundnecessarycapitalexpenditureswillaverageapproximately$145million.
DemolitionInitiative. ProgramlaunchedinApril2010withthegoalofdemolishing
10,000vacant
structures
in
three
years.
Over5,000structureshavebeendemolished;theremainingportionofthe10,000structuresinthe ro ramare lannedtobedemolishedb December2013.
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V. RestructuringandReinvestinginCityGovernment
addressedabove(including,inparticular,deficienciesinservicesrelatingtopublicsafety),andtoachieveasustainablerestructuringthatpromotesthelongtermhealth,safetyandgrowthoftheCity,theCitymustaggressivelypursue anddevotesubstantialresources
.
TheCityproposestospendapproximately$1.25billionoverthenexttenyearsto,amongother
things,
(i)
improve
the
performance
and
infrastructure
of
its
Police,
Fire,
EMS
and
TransportationDepartments,(ii)comprehensivelyaddressandremediateurbanblight,
lingeringissuesplaguingtheCity'selectricalgridandlighting.
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V. RestructuringandReinvestinginCityGovernment
Police
- Objectives- Reduceres onsetimestothenationalavera e.
- Improveclosureratesandfirstresponderinvestigations.
- Updateand
overhaul
police
fleet
and
facilities.
- ModernizetheDepartment'sinformationtechnology.
- .
- Refinestructure,staffingandorganizationofdepartmenttobetterservecitizens;holdallmembers(swornandcivilian)ofthedepartmentaccountabletoeffectively
maintain
core
responsibilities
of
policing.
Fire/EMS
- Objectives
-
infrastructureand
equipment
to
perform
its
duties.
- Modernizeinformationtechnology.
- Improveoperatingefficiencyandcoststructure.
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V. RestructuringandReinvestinginCityGovernment
- Objectives
- Implementcurrentpopulationbasedstreetlightfootprint.
-
Authoritystructure(withoversightfromtheCity).
- Improveservice
to
citizens
and
better
cost
management.
BlightRemoval.
Objectives
-StabilizeandrevitalizeneighborhoodsandcommunitieswithintheCityandimprove
.
- Decreaseincidenceofcrimeandfireinblightedbuildingsandareas.
- Increasepropertyvalues.
- .
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V. RestructuringandReinvestinginCityGovernment
Objectives
- Improvementinperformanceofgridandservicestocitizens.
- .
- Increaserevenuecollectionfromcustomers.
InformationSystemsUpgrades
InvestmentbytheCityinupgradedinformationtechnologyisanindispensableaspectoftherestructuringandreinvestmentproposalsandiscriticaltoachievingalmostalloftheobjectivesdescribedherein.
Objectives
- augmentingworkflows.
- IncreaseintegrationbetweenfinanceandoperationalsystemsCitywideresultinginlowerlaborcostsandimprovedefficiencies.
- Improvefinancialandoperationalreporting,resultingin:
- Abilitytomonitorandimproveoperatingperformance.
- Moretimelyandaccuratefinancialreportingtointerestedparties.
OFFICEOFTHEEMERGENCYMANAGER
- Improvedrevenueandcollectioneffortsasaresultofstreamlinedprocesses.
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V. RestructuringandReinvestinginCityGovernment
.
Objectives
- Reducegeneralfundsubsidythroughincreasedrevenueandreducedcosts.
- .
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VI. RealizationofValueofAssets
'advantageouscourseofactiontopreserveormaximizethevalueofsuchassetsforthelongtermbenefitoftheCity. TheCitywillevaluatealloptions,includingpreservingthestatusquo,enteringintopartnershipswithotherpublicentities,outsourcingof
leaseorothertransactions.
Nodecisionshavebeenmaderegardinganyparticularasset,andtheEmergencyManagerwillcontinuetoevaluateoptionsforinclusioninhiscomprehensive
.
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VII. TenYearProjections(GeneralFundOnly)
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j ( y)
TheCityacknowledgesthatitmustexertreasonableeffortstomaximizerecoveriesforallcreditors.
Asdemonstratedbythe10yearprojections,however,theCity'sexpectedrevenueswillfallsignificantlyshortofthelevelsrequiredtofundtheCitysoperationsandfullysatisfyitsliabilities.
GiventheCity's(i)substantialdebtlevels(LTGO;UTGO;COPs;Swaps),(ii)significantlaborrelatedliabilitiesand(iii)continuingoperatingexpenses,sharedsacrificewillberequiredfromallstakeholderstoachievetheCity'sdual(andcomplementary)goalsofmaximizingreturnsforitsstakeholderconstituencieswhilesimultaneouslyestablishingtheframeworkforahealthyandgrowingDetroitmovingforward.
AlloftheCit 'sstakeholderscanbenefitfromarestructuredandrevitalizedDetroit.
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THE
EMERGENCY
MANAGER 49
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g p
SecuredDebt
- DWSDDebt. TheexistingDWSDwaterandsewerbonddebtmaybedividedintotwoclasses,ifapplicable:- DWSDClassADebtClaims
- DWSDClass
A
Debt
Claims
shall
consist
of
claims
under
or
evidenced
by
certain
debtthatmaybepaidpriortotheeffectivedateoftheCityscomprehensive
.
- OntheeffectivedateoftheCityscomprehensiverestructuringplan,accrued
principalandinterestforDWSDClassADebtClaimsaccruedthroughthe
restructuringplan'seffectivedatewilleither(i) berepaidinfullincashor
.
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THE
EMERGENCY
MANAGER 50
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- newlyformedMetropolitanAreaWaterandSewerAuthority,or"MAWSA,"astheissuer.
i. NewSeriesABondPrincipal: Anamountequaltothesumoftheprincipalof
eou s an ng e a was ssue ore eem e ass e
Bondsplusinterestthereonaccruedthroughtherestructuringplans
effectivedate
and
fees
incurred
in
connection
with
the
new
financings.
ii. NewSeriesABondCollateral: LienonnetrevenuesgeneratedbyMAWSA
asse sw esamepr or esas e ass e , u su or na e o
theoperatingandmaintenancecostsofthesystem,includingtheTransaction
Payment.
iii.New
Series
A
Bond
Interest
Rate:
Prevailing
market
rate
for
similar
long
term
mun c pa on satt et meo ssuance.
iv. NewSeriesABondMaturities: Thevariousseriesofnewmunicipalbonds
wouldhavelongtermmaturitiesdeterminedatthetimeofissuanceonthe
basisofthenexistingmarketconditions.
- DWSDClassBDebtClaims.
- DWSDClass
B
Debt
Claims
shall
consist
of
all
claims
under
or
evidenced
by
each
seriesofexistingwaterorsewerbonddebt(whethercallableornot)thatarenot
DWSDClassADebtClaims.
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THE
EMERGENCY
MANAGER 51
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.
,ofDWSD ClassBDebtClaimsshallreceiveSeriesBRestructuredBondsor
suchtreatmentasmaybeagreeduponbytheparties.
- SeriesBRestructuredBondTerms: SeriesBRestructuredBondswouldbeissuedbyMAWSA toholdersofoutstandingDWSD ClassBDebtClaims.
i. Series
B
Restructured
Bond
Principal:
For
each
series
of
Series
B
RestructuredBonds,anamountequaltothesumoftheprincipaloftheoutstandingDWSDClassBDebtBondsforwhichsuchSeriesBRestructuredBondsaretobeexchangedplusinterestthereonaccruedthroughtherestructuringplanEffectiveDate.
ii. SeriesBRestructuredBondCollateral: Lienonnetrevenuesgeneratedby
MAWSAassets
in
the
same
priorities
as
currently
exist
for
the
DWSD
Class
B
DebtBondsforwhichsuchSeriesBRestructuredBondsaretobeexchanged,subordinatetotheoperatingandmaintenancecostsofthesystem,includingtheTransactionPayment.
iii. SeriesBRestructuredBondInterestRate: Prevailin marketrateforsimilarlongtermmunicipalbondsatthetimeofissuance.
iv. SeriesBRestructuredBondMaturities: ThesamematuritydatesastheDWSDClassBDebtBondsforwhichtheSeriesBRestructuredBondswillbe
OFFICEOF
THE
EMERGENCY
MANAGER
.
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-
- TherearesixseriesofsecuredGeneralObligationDebt:
- $100,000,000originalprincipalamountDistributableStateAidSecondLien
Bonds(UnlimitedTaxGeneralObligation),Series2010(A)(TaxableRecovery
ZoneEconomicDevelopmentBondsDirectPayment).
- $249,790,000originalprincipalamountDistributableStateAidGeneral
ObligationLimited
Tax
Bonds,
Series
2010.
- $38,865,000originalprincipalamountSelfInsuranceDistributableStateAid
ThirdLienBonds(LimitedTaxGeneralObligation),Series2012(A)(2).
- $30,730,000originalprincipalamountSelfInsuranceDistributableStateAid
ThirdLienRefundingBonds(LimitedTaxGeneralObligation),Series2012(B2).
- $6,405,000original
principal
amount
General
Obligation
Distributable
State
AidThirdLienCapitalImprovementRefundingBonds(LimitedTaxGeneral
Obligation),Series2012(B).
- $53,520,000originalprincipalamountSelfInsuranceDistributableStateAid
ThirdLienBonds(LimitedTaxGeneralObligation),Series2012(A2B).
- Totalannualdebtserviceisapproximately$39millionperyearfromFY 2015through
FY 2033.
- Treatment: Subjecttonegotiationwithholders.
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THE
EMERGENCY
MANAGER 53
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-
- TheCityhas$87.8millionoutstandinginconnectionwithnotespayablerelatedtovariouspublicimprovementprojects,whichnoteswereissuedinconnectionwiththe"Section108"HUDLoanGuaranteeProgramandaresecuredbyfuture"Block
"ran revenues.
- Treatment: Subjecttonegotiationwithholders.
- SecuredClaimsArisingunderServiceAgreementsRelatedtoCOPRelatedInterestRateSwaps
- Treatment: Subjecttonegotiationwithholders.
- SecuredAutomobileParkingFundClaims
- $9.3million
in
outstanding
principal
amount
of
Detroit
Building
Authority
Revenue
RefundingBonds:ParkingSystem,Series1998Aaresecuredbyapledgeofallrevenuesoftheparkingsystem,netofoperatingexpenses.
- Treatment: PrincipalandinterestaccruedthroughtheeffectivedatewillbepaidinfullincashusingproceedsofsalesofCity'sparkingrelatedassets. Intheeventthatsalesarenotnegotiatedandconsummatedpriortotheeffectivedate,claims
willbe
subject
to
negotiations
with
holders.
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THE
EMERGENCY
MANAGER 54
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limitedrecourseparticipationnotes(the"Notes").
- ClaimsUnderUnsecuredGeneralObligationBonds/Notes.
- Aggregateamount: Approximately$650million.
- Treatment: Exchangedforaprorata(relativetoallunsecuredclaims)principal
amount
of
new
Notes.- ClaimsofServiceCorporations(oraffiliatedtrusts)onAccountofCOPs.
- ggregateamount: pprox mate y . on.
- Treatment: Exchangedforaprorata(relativetoallunsecuredclaims)principalamountofnewNotes.
- ClaimsforUnfundedOPEBLiabilities.- Currentretireeswillreceivemodifiedmedicalbenefitsplansutilizingeitherthe
exchangestobecreatedbyJanuary1,2014underthePatientProtectionandAffordableCareActorMedicare,asapplicable. Theproposedreplacement
$27.5millionand$40millionannuallydependingonchoicestobemade.
- Claimswillresultfromthemodificationofbenefits. Theamountofsuchclaimshasnotbeenfinallydetermined.
OFFICEOF
THE
EMERGENCY
MANAGER
- TreatmentforAllowedClaims: Exchangedforaprorata(relativetoallunsecuredclaims)principalamountofnewNotes.
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-
.- Assetforthabove,preliminaryanalysisindicatesthattheunderfundingintheGRS
andthePFRSisapproximately$3.5 billion. Atthislevelofunderfunding,theCitywouldhavetocontributeapproximately$200million $350millionannuallytou y un curren yaccrue ,ves e ene s. uc con r u onsw no ema e
undertheplan.
- Claimsfor
the
underfunding
will
be
exchanged
for
apro
rata
(relative
to
all
unsecuredclaims)principalamountofnewNotes.
- Becausetheamountsrealizedontheunderfundingclaimswillbesubstantiallylessthantheunderfundingamount,theremustbesignificant cutsinaccrued,vestedpensionamountsforbothactiveandcurrentlyretired persons.
- ClaimsonaccountofOtherLiabilities.- AggregateAmount: Approximately$300million.
- Treatment: Exchangedforaprorata(relativetoallunsecuredclaims)principalamountofnewNotes.
OFFICEOF
THE
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.- RelevantDefinitions:
- AdjustedBaseCoveredRevenuesmeansforaFiscalYearfollowingtheInitialRevenueParticipationYear,BaseCoveredRevenuesadjustedforinflationfortheperiodbeginningonthefirstdayoftheInitialRevenueParticipationYearandendingonthefirstdayoftheFiscalYearusingthepositivechange,ifany,inthe
ConsumerPrice
Index
during
such
period.
- BaseCoveredRevenuesmeansonehalfofthesumofCoveredRevenuesforthefirsttwoFiscalYearsbeginningaftertheEffectiveDate.
- CoveredRevenuesmeansamountsactuallycollectedbytheCitysGeneralFundinaFiscalYearonaccountof(a)PropertyTaxes,IncomeTaxesandGamingTaxes
leviedfor
such
Fiscal
Year
and
b
Revenue
Sharin
Pa ments
determined
based
upontheCity'sauditedfinancialstatements.
- DutchAuctionmeansamethodforpricingtheNoteswherebythepriceoftheNotesofferedbytheCityisthelowestprice(theAuctionPrice)atwhichthere
isrequiredtopayinrespectofRevenueParticipationPaymentsand/orAssetDisposition
Proceeds
then
due
and
payable.
During
bidding,
each
Noteholder
will
indicatehowmanyNotesitiswillingtoselltotheCityandthepricesuchNoteholderiswillin toacce t. AllNotesofferedattheAuctionPriceoratalower
OFFICEOF
THE
EMERGENCY
MANAGER
pricewillbesoldtotheCityattheAuctionPrice.
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CitysfinancesonwhichtheNotesshallbeissued.
- FinalParticipationYearmeanstheFiscalYearbeginningonthe20thanniversaryofthefirstdayoftheInitialParticipationYear.
- FiscalYearmeansaperiodcommencingonJuly1ofayearandendingonJune30ofthefollowingyear. Forgreatercertainty,theFiscalYearbeginningonJuly1,2014
andending
on
June
30,
2015
is
the
2015
Fiscal
Year.
- InitialParticipationYearmeansthesecondfullFiscalYearfollowingtheEffectiveDate.
- TrusteemeansanindenturetrusteeorotheragentfortheNoteholdersasdefinedindefinitivedocumentationfortheNotes.
-- InitialPrincipalAmount: $2,000,000,000.00.
- InterestRate: 1.5%perannumontheoutstandingprincipalamountoftheNotes,payablesemiannually. NointerestshallbepaidoraccruedforanyperiodfollowingtheendoftheFinalParticipationYear.
- MaturityDate:
The
first
September
30
following
the
Final
Participation
Year.
The
CityshallhavenoobligationtopayanyamountsotherthantheRevenuePartici ationPa mentinres ectoftheFinalPartici ationYearonthematurit date.
OFFICEOF
THE
EMERGENCY
MANAGER
TheNotesmaybeprepaidinwholeorinpartatanytimewithoutpremiumorpenalty.
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ParticipationYear,anamountequaltotheproductof(a)30%(0.30),multipliedby(b)(i)theamountbywhichCoveredRevenuesforsuchFiscalYearexceed(ii)AdjustedBaseCoveredRevenuesshallbeappliedtoreducetheprincipal
.FiscalYearaftertheFinalParticipationYear.
- Grantsand
Other
Amounts
Received
to
Offset
Costs
of
Addressing
Blight:
If
the
CityreceivesanycashgrantsorothercashpaymentsaftertheEffectiveDateand, ,
anyothergovernmentornonprofitentitynotaffiliatedinanywaywiththeCityforthepurposeoffundingprogramsoractivitiestoaddressblightthatareincludedinthe10YearPlan("BlightRevenues")andthatcanbeutilizedinplaceofthe
GeneralFund
sums
in
the
10
Year
Plan
ro ections
an
amount
e ual
to
75%
of
the
GeneralFundrevenuesthatwouldotherwisebespentonblightbutfortheoutsidefundsshallbeappliedtoreducetheprincipalamountoftheNotes.
- AssetDispositionProceeds: IftheCityreceivescashconsiderationinconnection
MaturityDate,anamountequalto75%ofsuchcashshallbeappliedtoreducethe
principalamount
of
the
Notes.
For
greater
certainty,
the
assumption
of
indebtednessshallnotconstitutecashconsideration.
OFFICEOF
THE
EMERGENCY
MANAGER
-
whentheamountofsuchpaymentsthataredueequalorexceed$50millionoratthetimeaRevenueParticipationPaymentisdue,whicheverissooner.
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,
,
DispositionProceedsandotheramountsmadeavailablebytheCitymaybeusedtofundofferstopurchaseNotesthroughaDutchAuctionprocess.TheCityshallgivenoticeofitsintenttoconductsuchaDutchAuctionusingaRevenueParticipation
andshallconcludetheauctionandpurchasenotesofferedandacceptedinthe
auction
no
later
than
the
90
days
following
the
date
such
notice
is
given.
The
City
shallgivenoticeofitsintenttoconductsuchaDutchAuctionusingAssetDispositionProceedsorBlightRevenuesonorbeforethe30daysfollowingthedatewhentheCitybecomesobligatedtoapplyAssetDispositionProceedsandshallconcludetheauctionandpurchasenotesofferedandacceptedintheauctionnolaterthan90daysfollowingthedatesuchnoticeisgiven.TheCitymaygivenoticeofitsintent
to
conduct
a
Dutch
Auction
using
funds
provided
by
the
City
which
are
not
otherwiserequiredtobeappliedtorepaymentoftheNotesatanytime.
- LimitedRecourse: TheCitysobligationtopayinterestontheNotesshallbeageneralobligationoftheCity. TheCityshallhavenoobligationtopaytheprincipalamountoftheNotesexcepttotheextentthatRevenueParticipationPayments,BlightRevenuesorAssetDispositionProceedsbecomedueinaccordancewiththe
termshereof.
- RequirementsofLaw. ThetermsoftheNotesmayberevisedtoconformwithre uirementsoflaw.
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MANAGER 60
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, , .
Initialroundofdiscussionswithstakeholders: June17,2013 July12,2013.
Evaluation: July15,2013 July19,2013.
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THE
EMERGENCY
MANAGER 61
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- MILLERBUCKFIRE &CO.,LLC601LexingtonAvenue,22ndFloorNewYork,NY10022
- KennethBuckfire
CoPresident
&
Managing
Director.
- JamesDoakManagingDirector.
- JONESDAY
.
,
.901LakesideAvenueNorthPointCleveland,Ohio441141190
, .
555 South Flower Street, 50th Floor
Los Angeles, CA 90071
(213) 489-3939
, .
222 East 41st Street
New York, NY 10017
(212) 326-3939
OFFICEOF
THE
EMERGENCY
MANAGER 62
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