CHICAGO -- Detroit emergency manager Kevyn Orr said he plans to ask a federal judge to formally approve the city's exit from bankruptcy within the next two weeks, and that he is leaving the city with a new budget that would have a $100 million surplus after two years.
Orr made the comments Friday to the Financial Review Commission, which will oversee the city's finances for at least 13 years as part of its Chapter 9 reorganization plan.
"We'll be able to break some of the historical characteristics of the city going to the financial capital markets borrowing money to cover operational concerns," Orr told the nine-member board, according to local reports.
The outgoing manager also said the city was about to close a $275 million exit financing with Barclays that is key to the bankruptcy exit plan, and that Detroit wouldn't need to borrow new money for at least 10 years.
U.S. Bankruptcy Judge Steven Rhodes has already approved Detroit's bankruptcy plan and the city hopes to formally exit the largest municipal bankruptcy in the U.S. by Christmas.
Orr said he hopes the bankruptcy exit will become official in the next several days.
"We are hopeful in less than the next week or two, we will be able to go effective under the terms of the bankruptcy," he reportedly said.
Orr said he was preparing what he expects will be his final executive order, a resignation letter to Gov. Rick Snyder that recommends the governor lift the financial emergency that the city has been under for more than two years.
Outlining details of the new two-year budget, Orr said the 2015 fiscal year would be transitional and that the city's "ordinary course" budget will begin in 2016, according to the Detroit News.
The 2015-2016 budget will start with a $58 million deficit carried over from the current budget, but Orr said he expects the city to build up a $62 million cushion by the end of fiscal 2015, according to local reports. The city would have another $53 million in extra cash by the end of fiscal 2016.
The city is required by state law to have a reserve equal to 5% of its expenditures.
"The city can show for the next two years it will not only have the resources to pay as it goes, but it will also have the ability to carry forward both minimum cash balance and a cash cushion for both years," Orr told the board.
Board member Darrell Burks questioned Orr about the "true revenue" estimates in the city's structuring plan. "So everybody can be clear, the deficit is there for 2014," The Detroit News quoted Burks as asking. "At the end of 2015 you'll have a positive result? That's an estimate, not a reality?" "We're pretty confident we're going to hit that," Orr reportedly said.
Orr reportedly said he does not expect Detroit to have to borrow money for at least 10 years under the current reinvestment plan.
Rhodes has set a status hearing for Dec. 15.
