Detroit Faces Another Cash-Flow Crisis

Reuters, November 13, 2012

Detroit is projecting it will run out of cash next month unless the state of Michigan releases money due it from a debt sale, the city told its financial advisory board.

The city’s report to the board, created as part of a consent agreement Detroit approved in April, said that “absent the availability of escrow proceeds, the city will need to employ other working capital solutions to avoid liquidity crises.”

Projections show the city’s weekly cash flow at just $4.1 million in mid-December before dropping to a negative $4.8 million at the end of the year.

{snip}

The Michigan Finance Authority sold $129 million of bonds for Detroit in August, completing a debt sale aimed at raising $137 million for the cash-strapped city. While Detroit received some of that money, Michigan Treasury officials tied the release of another $30 million this year to Detroit’s progress on reforms.

“The Department of Treasury is working with city of Detroit to establish milestones that will allow the release of bond funds being held in escrow and will continue to move the city forward in an expeditious manner,” Caleb Buhs, a spokesman for the department, said on Tuesday.

Detroit faced a cash crisis this summer that led to warnings it could default on some bonds, as well as to subsequent downgrades that pounded the city’s credit ratings deeper into the junk category.

{snip}

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  • handyandy2@optonline.net

    This isn’t even news. Detroit is always in a “cash flow crisis,” just like here in the People’s republic of New Jersey, Camden is always in a cash flow crisis. I wonder what Detroit and Camden have in commom?

    • Oil Can Harry

      EVERY majority black city has their tin cup out, begging for white taxpayers to bail them out.
      Question for open-borders liberals and neocons: When the US has a nonwhite majority who will bail us out?

    • http://profile.yahoo.com/7RORAJVG7LJJZECDJIILHJBE7U So CAL Snowman

      a vibrant, diverse population?

    • JackKrak

      Exactly. This same article has appeared in some form or another with the months changed for years and will continue to show up every couple of months forever.

  • http://countenance.wordpress.com/ Question Diversity

    “Cash flow crisis.”

    As a non-practicing accountant, I can assure you that this doesn’t quite mean what you think it means.

    What it means here is that Africanus Bellcurvius has no problem taking, but has a lot of problems giving back.

    • http://profile.yahoo.com/7RORAJVG7LJJZECDJIILHJBE7U So CAL Snowman

      No, the problem here is that people expect blacks to give back something, anything. For blacks this isn’t a problem at all!

    • Triarius

      The Problem is is that 14% of Detroit residents have a taxable income. I cannot think of a major city that is worse.

      • http://countenance.wordpress.com/ Question Diversity

        That’s pathetic enough by itself. But consider that it’s even worse because most of that 14% only have “taxable income” because their jobs are with a public institution that relies solely on taxes (the city government, the public school district, first responders), or they’re working for a technically private firm that relies heavily on tax money to survive, or if they are in real private industry at all, the firms are forced to hire them because of affirmative action.

        About the only person who lives in Detroit proper who actually earns his salt in private industry is Berry Gordy, except I forgot he moved out of Detroit and into California about when Coleman Young moved in to City Hall.

        • shmo123

          Sadly, Motown left Detroit (1972) even before Coleman Young became mayor (1974).

  • http://twitter.com/TonySoprano19 Tony Soprano

    Dont you know its the fault of the auto industry closing plants.We all know they only employed black people.

    • Howard W. Campbell

      Surprising that not one foreign auto manufacturer has built a plant in Michigan. They could probably buy some of the old facilities for a dollar. Instead, they tend to locate plants in mostly white rural areas. Wonder why?

      • Michael_C_Scott

        “They tend to locate plants in mostly white rural areas.”

        In southern “right-to-work” states.

  • http://profile.yahoo.com/7RORAJVG7LJJZECDJIILHJBE7U So CAL Snowman

    Who in their right mind would buy Detroit city bonds?

    • Howard W. Campbell

      Probably people bullied into them by the threat of a federal and/or civil rights investigation.

  • dukem1

    If the good burghers of Day-twah do not soon get their act together, they may soon be surpassed by Chicago as the Paris of the Midwest. What a blow to civic pride that would be.
    Let’s all chip in!

  • Unperson

    “Detroit faced a cash crisis this summer that led to warnings it could default on some bonds, as well as to subsequent downgrades that pounded the city’s credit ratings deeper into the junk category.”

    Well, Detroit itself is now permanently in the junk category, so I suppose it’s only to be expected that its bonds and credit ratings would be too.

  • puffdaddy

    How come Detroit, Flint, Gary, and Camden (among others) aren’t utopian visions of the principles of Kwanzaa (http://www.history.com/topics/kwanzaa-history)? Once free of white people who pay their bills, ur, I mean discriminate against them, why don’t the citizens of these cities rise to the occasion and finally show what they can do – what they can accomplish? Oh. That’s right. They have. Or is it the excuse elites use – we (white people) haven’t educated them so they don’t know how to form their own communities and their own infrastructure….in this case proving the point they always want to dismiss.

  • Michael_C_Scott

    What would happen if the state of Michigan just said “no”?

    Would Detroit throw dishes? Pack its things, leave in a huff and move in with Newark?

    • Howard W. Campbell

      The federal government might literally send in troops to keep the money flowing. Although this might be extreme, it would not surprise if Obama makes a few phone calls and threatens the state if they do not hand over the money.

  • http://pulse.yahoo.com/_WP6FBJWJYEU7S6TMNJS5D2BB5M Luis

    Imagine how little money woud be coming into Detroit, if the haole sports fans from the suburbs didn’t get their fix from the Lions, Tigers, Pistons and Red Wings. In the latter case, I’m surprised Dave Bing hasn’t pleaded with the NHL to solve the labor dispute, in order that haole money would flow into the Red Wings – and Detroit’s – coffers.
    Detroit would be in this situation even if the Tigers won the Series. Take that, Mike Ilitch.