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October 18-24, 2017
City of Detroit receives its second credit rating upgrade in less than three years Detroit’s underlying credit rating took another major step forward as Moody’s Investors Service upgraded the city’s rating a full level. The rating agency also assigned a positive outlook for further upward movement in the coming years amid signs of strong management of the city’s finances. The rating upgrade indicates stronger confidence in the city’s financial outlook since it emerged from bankruptcy nearly three years ago, and it comes as Detroit prepares to place $125 million in financing as part of a $317 million project to revitalize neighborhood commercial corridors throughout the city along with extensive road and sidewalk repairs. “When we exited bankruptcy, many questioned whether Detroit would be able to manage its finances going forward,” Mayor Mike Duggan said. “Two credit rating upgrades in less than three years and a positive outlook from Moody’s show just how fast our financial turnaround is succeeding.” The B1 rating is the city’s highest by Moody’s since March 2012. Moody’s raised Detroit’s rating on its general obligation unlimited tax pledge to B1 from B2, up from Caa3 in 2013. “We have been very conservative in our projections, and we’re executing a plan to address our legacy pension obligations and produce surpluses each year to reinvest in vital city services and our neighborhoods,” Duggan said. “Job growth is well under way and the city’s economic performance is strong.” Moody’s noted as much, citing Detroit’s efforts to revitalize neighborhoods as a sign of strength in the city’s financial outlook. According to Moody’s, “the upgrade to B1 reflects improved fund balance and liquidity coupled with adoption of a pension funding strategy that will lessen the budgetary impact of a future spike in required contributions. The rating also considers the very conservative fiscal approach of Detroit's current administration as well as the city's current economic performance, which is strong considering its historic contraction.” Moody’s report stated that Detroit has the following credit strengths: • Very healthy fund balance and liquidity provide resources to invest in economic development or absorb a short-lived budgetary shock • Job growth is fueling rising income taxes, positioning the city for operating surpluses in the coming years • Very conservative fiscal management is intent on keeping general operating expenses below the current revenue intake in order to address long-term pension funding needs • Increased road funding from the State of Michigan (Aa1 stable) will support Detroit’s neighborhood revitalization initiative
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Is this the shape of things to come for Detroit?
Why Amazon?
Members of Detroit’s Amazon HQ committee tasked with landing the business behemoth make the case for why this matters By Keith A. Owens
Wayne County Executive Warren Evans
ogy, e-commerce and logistics.
Senior Editor
“A development of this magnitude would bring jobs and investment at levels few projects could. It will also significantly impact the tax base, which will better fund the services the city provides to its residents. Now, if you’re sitting below the poverty line or struggling to find a job, that may not get you excited. I wouldn’t blame you if you felt that way. But this level of outside investment would infuse the city with energy and resources that weren’t there beforehand. That’s going to create opportunities and impact throughout the region.”
“And fourth, it could accelerate the region’s adoption of a comprehensive, effective public transit system that ensures that all city residents have ready and affordable access to the region’s employment centers, health care facilities and recreational amenities.
Amazon announced on Oct. 5 that it is planning to open a second headquarters, to be called Amazon HQ2. Facing steep competition — and some might say steeper odds — a broad list of 59 local and regional power players, led by Rock Financial’s Dan Gilbert, is betting Detroit can convince Amazon that the Motor City is home sweet home, as well as a swell place to park all those jobs and all that cash. I asked a cross-section of those committee members to share their thoughts on why they think this is such a big deal for all of Detroit. Amazon has set an Oct. 19 deadline — meaning tomorrow — for cities to submit bids. Why should your average Detroiter care about whether or not Detroit lands Amazon? Nearly more than one-third of Detroiters are living at or below the poverty line, and more than that are functionally illiterate. How will landing Amazon improve their lives? Mayor Mike Duggan “Opportunity is what lifts people out of poverty and bringing Amazon to Detroit would create a level of opportunity we’ve not seen in generations. Amazon could create up to 50,000 jobs in the metro area. While we still are learning exactly what types of jobs would be included in the 50,000, there’s no doubt they will span a wide variety of job sectors and skill levels. One of the things Detroit needs most is more jobs in the city limits. The income taxes alone that would be generated by 50,000 jobs would be a tremendous boost to the city’s tax base. That’s money we could use to fund critical city services and continued investment in our neighborhoods.”
Dennis Archer, Jr. “The average Detroiter should care about Amazon coming to Detroit for several reasons. To outline the one most obvious to me: Amazon would bring thousands of new technology-related jobs to Detroit. That will not only add significant business and payroll taxes to the city which can, in turn, be used to improve public services to all citizens, it will also create more demand for incremental jobs in various areas, such as legal, service industry, maintenance, hospitality, real estate, dry cleaning, physicians, etc. That’s good for our entire community. Additionally, having thousands of jobs in this sector coming on line over the course of several years should encourage our educational institutions to adapt their curriculums to address these opportunities.” Rip Rapson “First, it increases the tax base, injecting new financial capacity into city government’s ability to provide all residents with improved public services. “Second, it contributes to long-term economic stabilization by helping diversify our economy. “Third, it provides a wide spectrum of possible employment ladders in technol-
“But we cannot seek and embrace an investment of this type without insisting — guaranteeing — that the positive benefits are genuinely equitable. “Landing Amazon will reportedly translate into thousands of jobs and job opportunities for Detroiters, perhaps more at one time that any time in Detroit’s recent history. But will Detroiters qualify for these jobs?” Mayor Mike Duggan “Again, these 50,000 jobs will span a wide range of employment opportunities — and that’s just direct Amazon jobs. We will also continue to implement new Detroit At Work programs to train Detroiters for careers such as software engineering and logistics. If Amazon chooses Detroit, we will have several years to ramp up and train as many Detroiters as possible so they are prepared for these jobs when they become available. Detroit also is one of very few cities nationally that has a program — The Detroit Promise — that guarantees any high school graduate will have the opportunity to go to college and get the education and training they need to land these high paying Amazon jobs. Wayne County Executive Warren Evans “There has been a stronger effort in recent years to help more Detroiters pursue training and education needed in today’s workforce. There’s obviously more work to do on that front, but we’re making progress and this project can hopefully move us closer to the day when we
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Wayne, Oakland County executives join in legal fight against opioid crisis By Keith A. Owens
for prosecutorial services. Obviously the increased cost for medical services. All of those are things that impact a community of taxpayers who would much rather see those dollars go to other areas that are needed and not be a part of a drug problem.
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Wayne County Executive Warren C. Evans and Oakland County Executive L. Brooks Patterson announced last week that they would be filing a joint lawsuit against multiple drug manufacturers and distributors alleging the deceptive marketing and sale of opioids — a dangerous, highly addictive and often lethal class of painkillers, including OxyContin and Fentanyl. The lawsuit, the first such suit filed in Michigan, comes as opioid-related deaths continue to climb and opioid-related addiction continues to devastate communities across the country. The complaint was filed in the U.S. District Court for the Eastern District of Michigan. “This is a full-blown health
“I see it as corporation profits that completely disregard human life. And I think it’s something that we as county executives have to look at and we have to take some definitive action to deal with this.”
E. Powell Miller (left), lead counsel, Miller Law Firm, Wayne County Executive Warren C. Evans and Oakland County Executive L. Brooks Patterson crisis from which the drug companies made billions,” said Evans. “People are dying and lives are being ruined by addiction as this horrible tragedy
unfolds. There has to be a price to be paid when corporations show such disregard for human life. … It is a very dark chapter in my book in terms of what it
does to lives. But it’s equally a dark chapter in terms of what it does to our collective budgets. The increased cost for law enforcement, the increased cost
The lawsuit alleges that one of the main drivers of the catastrophic nationwide opioid epidemic is drug manufacturers’ deceptive marketing and sale of opioids to treat chronic pain, including their concerted, coordinated strategy to shift the way in which doctors and pa-
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