Really really wanted to end the year on a positive, maybe we will start the new year with something less negative. Anyway.. Trib follows up on the story of the Detroit pension system’s losing bet on our casino: Casino’s Struggles Felt in Detroit.
Here is the thing. the story that came from sounds horrible. Risky bets cost Detroit pension funds $480 million. Yet the Detoit pension system, which is made up of two big pension systems I presume for uniformed and nonuniformed employees were funded at 100% and 106% in their latest audits. Granted those are from last year, but that is at least as current as our information here.
Go read the numbers yourself: See page 23 (per the pdf) of their General Retirement System audit, or the similar document for their Police and Fire Retirement system (page 25 per the pdf numbering). I’d point you out to read the comparable documents for the pension system here… but, you know.
So even after its $480mil dollar loss (a big chunk of which coming from our casino) Detroit’s pension system is three times as well funded as Pittsburgh’s pension systems combined. Maybe 4-5+ times as well funded as the Police pension fund (the worst-funded of our 3 pension funds) is here. Detroit!? Paragon of sound fiscal governance and transparency.
Might be intersting to look at an end of year news piece out of Detroit today. For them, their pension issues have truly become all consuming:
Another federal grand jury is probing potential problems with the city’s two pension funds. Subpoenas were issued to a top pension official and to the pensions themselves seeking records about investments, including a residential real estate development in Florida.
They’re mad that their pension fund is at or above 100% funding? While we are so happy with how things are going here that we are doing anything conceivable (and the inconceivable) to make sure nothing changes here?
Still an interesting tale of how Detroit got caught up in it all. Below is the ownership schematic and financing behind the reoarganization of the River Casino operation as of when Bluhm took it over from Barden. I would suggest that whenever you are a bank and have dotted lineds connecting you in a diagram like this, you have things to worry about. The multiple colors just for the Detroit pension folks is probably a red flag in itself. I’m just guessing Bluhm is a financial genius that is befitting a billionaire. If the Detroit pension system, and I am presuming Key Bank along the way as well took such big hits in this… then I bet his controlling interest in the casino didn’t really cost him all that much in comparison.
fyi this must be all before the debt/equity was restructured. Anyone have a similar diagram of the current, post reorg ownership structure of the Rivers Casino? Must have a bigger like to the Detroit pension system I figure. I wonder if one of their pension board folks gets expense paid trips to the casino here?