Detroit seeks answers to long-term debt problems
DETROIT (AP) — A consent agreement being negotiated between Detroit Mayor Dave Bing and Gov. Rick Snyder is part of the city's solution to a structural debt problem that also crippled General Motors and Chrysler.
Like the automakers, Detroit has convinced its workers that taking less pay and paying more for their health care will help keep the city afloat as revenues drop.
But bankruptcy and commercial litigation attorney Doug Bernstein says where automakers can sell cars to bring in capital, Detroit has few options to raise money to pay its bills.
The City Council is considering a request by the mayor's office to sell $137 million more in bonds to help short-term cash flow. Detroit also faces a $200 million budget deficit and has $13.2 billion in long-term obligations.