Committee advances trust agreement for Public Lighting Authority refinancing to formal session

The Budget, Finance and Audit Standing Committee voted to send to formal session a resolution approving a second supplemental trust agreement tied to potential refinancing of bonds issued by the City of Detroit Public Lighting Authority (PLA).

The agreement before the committee would add text clarifying that if the PLA receives less than one-twelfth of its expected monthly portion of the $12,500,000 paid annually from the city's utility users tax (UUT), the trust will require subsequent months' revenues to make up that shortfall. Deputy Chief Financial Officer and Treasurer Nikhil Patel said the change "doesn't change what the aggregate full year outcome is. All it does is, allow more security for the bonds that the PLA has." Patel said the PLA still would receive $12.5 million in a full year; the provision only smooths month-to-month deficiencies.

The memorandum and supplemental trust would enable the PLA to pursue refinancing of about $140 million in…