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Detroit City Council Opts for Bonds Over Mayor's Tunnel Sale Proposal

CHICAGO - The Detroit City Council yesterday signed off on a $3 billion fiscal 2009 budget that relies on $78 million of fiscal stabilization bonds to plug the current deficit, rather than Mayor Kwame Kilpatrick's proposal to sell the city's half of the Detroit-Windsor Tunnel.

The council crafted the final budget during weeks of hearings that came at an unprecedented time of hostility between the council and the mayor. Hours before approving the budget yesterday, the council advanced its attempt to remove Kilpatrick from office when the council's special attorney said forfeiture of office hearings could begin by June 13.

Calling this year's budget debates "quite unique," Council President Ken Cockrel Jr. delivered a final budget address yesterday that was highly critical of the embattled mayor - who faces eight felony counts that include perjury and misconduct of office - as well as several of his budget proposals.

"The council has been forced to deal with issues surrounding the executive office that have been challenging and incorporated into the time we usually reserve for budget considerations," said Cockrel, who under the city charter would become mayor if the office became vacant.

Cockrel called the proposal to sell the city's half of the Detroit-Windsor Tunnel for $75 million an "irresponsible and shortsighted" plan that would fail to address the city's structural deficit, now in its fourth year. Noting it is the second time the mayor has proposed the plan, Cockrel said each time the proposal was given to the council without adequate information or time to review.

"Council has yet to be convinced that limited information in the current incarnation of the deal [is in the city's interest]," he said.

To wipe out the current deficit that is estimated at around $58 million, the council instead approved a plan to sell $78 million of fiscal stabilization bonds, which is considered deficit borrowing. Cockrel said the sale would not occur until late 2008, and then only if officials were unable to identify other revenues to replace the borrowing plan.

Kilpatrick aides last week insisted that the tunnel deal could still be done by June 30, when Detroit's fiscal year ends, and said the mayor would consider vetoing the budget if it relies on borrowing.

Though it was not part of the budget, Cockrel also criticized Kilpatrick's highly touted $360 million economic stimulus plan that is financed through the sale of casino tax-backed revenue bonds.

"The bond issue is equivalent to financing $300-plus million dollars on a credit card," he said. "The city can ill afford this considering its already-high debt burden."

Kilpatrick and his former chief of staff Christine Beatty face a total of 12 felony counts that include perjury and misconduct of office stemming from testimony in a 2007 police whistleblower's trial. The Wayne County prosecutor's office has accused the pair of lying under oath about the nature of their relationship, their role in the firing of Detroit deputy police chief Gary Brown, as well as a confidentiality agreement in an $8.4 million settlement stemming from the police lawsuits.

The council has said it was misled into approving the settlement as the administration kept secret the truth of the confidentiality agreement, which kept secret dozens of sexually explicit text messages between Kilpatrick and Beatty.

 

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