CHICAGO - The Detroit City Council took final action Tuesday on the city's $1.9 billion fiscal 1994 budget by overriding Mayor Coleman Young's vetoes.
The mayor made three vetoes last Thursday - one in the general fund budget and two related to block grants, according to Edward Rago, the city's budget director.
The vetoes were largely related to: the council's shifting of Community Development Block Grant funds and funding for municipal offices in the city's neighborhoods, Rago said. The vetoes were relatively minor issues" and totaled less than $1 million, he said.
The council's action ends the budget process for the fiscal year that begins July 1, Rago said. The council passed the budget last month.
Rago noted that the mayor has no plans to nullify the budget. In past years, budget battles between the mayor and the council have landed in court.
In April, Young proposed the budget, which includes a $30 million carry-over deficit from the current fiscal year. The budget also carries over several budget assumptions from fiscal 1993 that were not fully implemented. Those include a 10% wage cut for uniformed union employees, the restructuring of $118 million of outstanding limited tax bonds into unlimited tax bonds, and the refunding of $180 million of bonds sold for a city convention center in 1985.
The budget calls for placing the bond restructuring before voters in September.
Meanwhile, the city is poised to refund the $180 million of convention center bonds pending approval of the issue by the Michigan treasurer's office.
State lawmakers last month passed legislation allowing the city to refund the bonds and use the estimated $17 million of present value savings for debt service on $20 million of bonds Detroit sold for the convention center in 1988.
However, Senate Republicans recalled the bill after it was sent to Gov. John Engler in an effort to force Democrats to act on other bills. The state attorney general said, however, that the action is not valid and that the legislation has already become law.
Detroit's general obligation debt is rated BBB with a negative outlook by Standard & Poor's Corp., and Ba1 by Moody's Investors Service.
