Detroit finally emerges from post-bankruptcy as city gains control of finances

Detroit emerged from post-bankruptcyoversight of its once-shakyfinances on Monday after a state ofMichigan board decided to end its active supervisory role.

The unanimous vote by the financial review commission, whichwas created as part of the city's federal court-approvedbankruptcy exit plan, enables Detroit's elected officials toenact budgets and enter into contracts without first obtainingthe board's approval.

• Michigan hires bankruptcy expert to manage Detroit's finances

• Detroit bankruptcy plan approved by judge

Billions in debt leavescityinbankruptcy

The city ended what was then the biggest-ever U.S. municipalbankruptcy in December 2014 after shedding about $7 billion ofits $18 billion of debt and obligations.

Last year, city and state officials started predicting thecommission would transition in 2018 to a 10-year period ofpassive oversight as Detroit ended consecutive fiscal years withbalanced budgets.

• Bankruptcy shadows Detroit's mayoral election

• U.S. bankruptcy judge approves $120M US loan for Detroit

Back in the black

An audit released in February showed a $53.8 millionoperating surplus in the fiscal 2017 $1.3 billion general fundbudget, bringing Detroit to the required three-straight balancedbudgets for active oversight to end.

"This is the earliest we could have done it," Detroit MayorMike Duggan said in a news conference, referring to thecommission's action.

James Spiotto, a municipal bankruptcy expert and managingdirector of Chapman Strategic Advisors, said while the city'sfinances have stabilized somewhat, more work needs to be done.

"It's like a diet. If you don't stay on it and if you don'tdo the right things to be financially sustainable, you can fallright back to where you were," he said.

• Detroit sees improvement in first year out of bankruptcy