One objective of a municipal bankruptcy settlement is to adjust the entity's obligations to the point where there is a reasonable likelihood that it will be financially viable. The city of Detroit, Michigan filed for bankruptcy in mid-2013 and emerged in late 2014. Here are some excerpts from the Census Bureau's QuickFacts (accessed August 2017) and from Detroit's financial statements for the fiscal year ended June 30, 2016, the first full year after Detroit emerged from bankruptcy. QuickFacts Detroit State of Michigan Percentage, population change, 2010 census to 2016 estimate (5.8)% 0.4% Median household income $25,764 $49,576 Per capita income $ 15,038 $26,607 Percentage, persons living in poverty 40.3% 15.8% Property taxes levied and collected in year (in millions of dollars) Property taxes levied in 2016 $197.7 Property taxes collected in year of levy $153.8 Detroit General Fund balance sheet data (in millions of dollars) Total assets $985.1 Total liabilities and deferred inflows $484.5 Fund balance: Nonspendable $ 5.2 Restricted 89.3 Committed 20.0 243.1 143.0 $ 500.6 $1,065.1 890.1 Assigned Unassigned Total fund balance Detroit General Fund operating statement data (in millions of dollars) Total revenues Total expenditures Excess of revenues over expenditures Other financing sources (uses): Proceeds from bonds and notes Transfers out Principal paid for refunded bonds Net change in fund balance Status of pension funds (in millions of dollars) 175.0 $ 245.0 (82.1) (275.0) (112.1) $ 62.9 Plan net position Total pension liability General Employees $2,131.3 $2,958.4 Police, Fire $3,194.6 $3,689.5 Required: Use the foregoing data to compute appropriate financial statement analysis ratios. Round all answers to one decimal place (ex: 0.8745 = 87.5%) Ratio Answer Property tax collection rate 0 % Budgetary cushion 0 % Operating margin 0 % Pension funded ratio (general employees) 0 % Pension funded ratio (police, fire) 0 % One objective of a municipal bankruptcy settlement is to adjust the entity's obligations to the point where there is a reasonable likelihood that it will be financially viable. The city of Detroit, Michigan filed for bankruptcy in mid-2013 and emerged in late 2014. Here are some excerpts from the Census Bureau's QuickFacts (accessed August 2017) and from Detroit's financial statements for the fiscal year ended June 30, 2016, the first full year after Detroit emerged from bankruptcy. QuickFacts Detroit State of Michigan Percentage, population change, 2010 census to 2016 estimate (5.8)% 0.4% Median household income $25,764 $49,576 Per capita income $ 15,038 $26,607 Percentage, persons living in poverty 40.3% 15.8% Property taxes levied and collected in year (in millions of dollars) Property taxes levied in 2016 $197.7 Property taxes collected in year of levy $153.8 Detroit General Fund balance sheet data (in millions of dollars) Total assets $985.1 Total liabilities and deferred inflows $484.5 Fund balance: Nonspendable $ 5.2 Restricted 89.3 Committed 20.0 243.1 143.0 $ 500.6 $1,065.1 890.1 Assigned Unassigned Total fund balance Detroit General Fund operating statement data (in millions of dollars) Total revenues Total expenditures Excess of revenues over expenditures Other financing sources (uses): Proceeds from bonds and notes Transfers out Principal paid for refunded bonds Net change in fund balance Status of pension funds (in millions of dollars) 175.0 $ 245.0 (82.1) (275.0) (112.1) $ 62.9 Plan net position Total pension liability General Employees $2,131.3 $2,958.4 Police, Fire $3,194.6 $3,689.5 Required: Use the foregoing data to compute appropriate financial statement analysis ratios. Round all answers to one decimal place (ex: 0.8745 = 87.5%) Ratio Answer Property tax collection rate 0 % Budgetary cushion 0 % Operating margin 0 % Pension funded ratio (general employees) 0 % Pension funded ratio (police, fire) 0 %
