CHICAGO — Hours after a state review team found a financial emergency in Detroit, state Treasurer Andy Dillon said he believes the city can be restructured successfully without bankruptcy.

Dillon said the city's long-term liabilities, estimated at around nearly $15 billion, pose the biggest threats to the city's future. The problem rests largely with the unfunded retiree health care liability — nearly $6 billion — and pension debt, rather than with revenue and general obligation bonds, Dillon said. "The city's funded debt, at $2.5 billion is manageable," Dillon said Tuesday afternoon at a press conference announcing the review team's report. "It comes down to the unfunded liability for health care and how unfunded the pension funds are — those are significant strains on the city," he said. "But I think we can navigate our way through this and avoid a [Chapter] 9."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.