CHICAGO - Detroit called its first witness Thursday in the trial that will decide if its bankruptcy plan is confirmed, with the city's finance chief testifying that the plan could lead to higher revenues over the next decade but warning it will be difficult to meet the targets.

Chief Financial Officer John Hill testified Thursday that he has already started to implement the confirmation plan, and that the city is already seeing improvements in key areas like financial systems. But the bulk of the $1.5 billion of the reinvestment plan is expected to come from savings generated by the plan, and it may be difficult to reach the necessary targets, he said.

"We'll do everything we can to adhere to it," Hill said in response to a question from Detroit's Jones Day lawyer, Geoffrey Stewart. "We definitely believe the plan gives us a road map to how we should be operating."

Hill's testimony came on the third day of the trial, after two days of opening statements from various parties. The city is trying to prove that the confirmation plan is key to the city's recovery, and is both feasible and fair to creditors.

Under questioning from city attorneys, Hill said there was about a 75% chance the city would be able to meet the plan's goals and achieve projected savings. If revenues fall short, changes would have to be made, which would require approval from a state oversight board that will be created to oversee the city for at least 13 years.

"If the revenues don't come as intended in the plan, we'll have to make adjustments," Hill said. "As we move forward, we will find differences that we'll have to adjust to, but I believe that it can be implemented."

The city cannot raise its tax rates without approval from the state Legislature as it already levies the maximum allowed under state law, Hill said.

But under questioning from Syncora Guarantee Inc. attorney Douglas Smith, from Kirkland & Ellis, Hill acknowledged the city is currently collecting only about 50% of its property taxes. Syncora believes the city is not collecting $130 million a year in property taxes.

Hill also admitted that the city has not explored alternative revenue-raising ideas not included in the confirmation plan. After ticking off a number of ways the city could raise more dollars, Smith asked Hill if he believed creditors should be able to share in any increased revenues in the future.

"I don't have an opinion on that," Hill responded. "The revenue targets that are in the plan are going to be very difficult to meet."

Syncora's counsel will continue cross-examination of Hill on Friday. Bankruptcy Judge Steven Rhodes has set aside dates through Oct. 17 for the trial if necessary.

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