Detroit Mayor Mike Duggan is eyeing to take legal steps against the former emergency manager of the city and bankruptcy consultants who used outdated mortality tables that left the city with $490 million in pension deficit.
As reported by Reuters, Duggan revealed during his State of the City Address on Sunday that the legal department is currently holding out an investigation pertaining to some of the consultants who worked over their municipal bankruptcy. The consultants' work resulted to a multi-million deficit that is expected to be paid by the city starting 2024.
The mayor stated that the deficit could have been due to the use of outdated mortality table used by the consultants that suggested that retirees will not live as long. After their work, the city paid $117 million for the legal and consultants' pay.
"The investigation's still going on, but it looks like they used outdated life expectancy tables to make the numbers balance, and assume that people are not living as long as they are. But that investigation is ongoing," , Duggan stated as reported by CBS Detroit. However, Duggan stayed firm that the pension deficit is still due for a couple of years more, and is not yet a crisis, but more of a problem which can be treated starting from his term.
According to Crains Detroit, Duggan stated that the city is to contribute $20 million during the end of the next fiscal year in order to help reduce the deficit. "We are going to keep our pension funds solvent," Duggan stated. "We are going to keep our promises to retirees. They were broken once and we are going to make darn sure it doesn't get broken again."
The consultants were hired through the city's former emergency manager, Kevin Orr, who was hired by Michigan Mayor Rick Snyder. Orr has not released a comment on the matter. Detroit has recently jumped out of bankruptcy in 2014 after they shed $7 billion in their $18 billion debt.
