VPISU … this is a time when each of us must reaffirm our sense of common purpose. In times of great stress or grief we need to count on one another, for through the university we all are linked by a belief that life is not only precious but also is sustained in a shared search for knowledge. This is the basis of our community, and it is the source of our strength. Irvin Reid, President WSU, April 17, 2007

Mayor wants to lease tunnel to help reduce Detroit's deficit BY MARISOL BELLO and JOHN WISELY FREE PRESS STAFF WRITERS April 13,

Rosier-than-expected budget Detroit Mayor Kwame Kilpatrick proposed a rosier-than-expected budget Thursday that would include no layoffs or service cuts, hire more police officers and anticipate more revenue -- all the while eliminating the city's growing deficit. But the key to reducing the deficit hinges on a deal in which Detroit would receive $75 million this year in exchange for leasing its half of the Detroit-Windsor Tunnel to Windsor for 75 years, once its current lease ends in Terms of the deal are incomplete, but it is supported by Windsor officials and expected to close by the end of June. The budget does not fund the mayor's neighborhood initiative in six target communities. Instead, Kilpatrick said, the city will target services to those areas, such as building demolition, street repair and tree cutting. The mayor said he still plans to present a proposal in May for a $1- billion bond deal to fund the neighborhood project.

Value of Lease This will bring $75 M in ONE TIME revenue For discounting purposes 75 years is close to infinite! At an interest rate of 5% per year, this implies: 75 = R/0.05, or: R = $3.75M per year.

$1 B in Bonds Must pay interest on the bonds. Current municipal bond rate is 4.56%.Current municipal bond rate This would mean almost $46 million per year in interest payments to bond holders, not including a payback of the principal.

Expenditures Wages and salaries would rise. Just about all other expenses would fall. Doesn’t seem to account for the interest payments on the bonds.

Budgeted PositionsMajor Revenue Sources

Other Items Kilpatrick proposes a new inspection fee to ensure that businesses that use private trash haulers comply with city rules. The fee will range from $150 to $1,000 per business. That, the residential garbage fee and the final bond payments on the incinerator in fiscal year , will make trash service self- sustaining, Kilpatrick said. The city subsidy on trash collection has been as high as $75 million in recent years. Two issues remain imperative to balancing the budget. –State revenue sharing, slated to fall by $8 million in the next fiscal year, but which the mayor acknowledges remains up in the air. –Land sales. This year, the mayor budgeted $30 million from selling city- owned property. So far, it has collected $10 million. Kilpatrick said the city needs the full $30 million this fiscal year to keep the budget in line and satisfy bond-rating agencies. "If we don't get the $30 million, we're in trouble, because two years in a row we didn't do what we said we were going to do," Kilpatrick said.