CHICAGO - When Detroit residents head to the polls Tuesday to elect a new mayor, they will also weigh in on a series of new-money bond proposals that would finance capital projects.
But the fiscally troubled city - still dealing with fallout from a trio of recent downgrades that pushed its outstanding debt into junk territory - would have to overcome several obstacles before it could enter the market with new bonds.
Tuesday's ballot will include a roster of 15 candidates vying for the mayoral seat as well as six proposals that would allow the city to issue a total of $263 million of unlimited-tax general obligation bonds.
The largest proposal is a $97 million GO issue that would finance improvements for a number of municipal buildings, including city museums, the Detroit Public Library, and parks and cultural facilities. Voters will also decide on a $72 million proposal that would finance projects relating to public safety projects and a $25 million bond issue that would pay for the cost of improvements to various housing economic development projects.
Also on the ballot is a $22 million proposal to finance various street, light, and power improvements, a $35 million proposal that would pay for renovations of city buildings, and a $12 million proposal for projects associated with city transportation facilities.
All bonds would be backed by property tax levies.
Even if voters approve the measures, Detroit would likely end up holding off before issuing the bonds, according to interim Mayor Ken Cockrel Jr.'s office.
In addition to facing higher borrowing costs stemming from the three downgrades, city officials would likely need to resolve a possible $400 million swap termination payment that is tied to the downgrades. And Michigan has effectively blocked Detroit from issuing new-money bonds until it completes its long-delayed 2007 audit. Cockrel recently said the city would complete the audit by the end of February.
The bond proposals have attracted some criticism, and a group of opponents had planned to hold a meeting on the borrowing plan last night.
At the same time voters will choose from a list of 15 candidates vying for the mayor's office, which became vacant last year when former Mayor Kwame Kilpatrick was sent to prison for felonies committed in office.
Cockrel - the former president of the City Council who became mayor under the city charter once the office was vacant - is considered a top contender, as is former Detroit Pistons star and businessman Dave Bing.
Other contenders include Wayne County Sheriff Warren Evans; state Rep. Coleman A. Young 2d, a son of the longtime Detroit mayor Coleman Young; and the city's former general counsel, Sharon McPhail.
Tuesday's election is a special election that is required under the city charter if the mayor's office becomes vacant. The two candidates with the most votes will then head to another election May 5. The winner will take office after May 20 and serve out the remainder of 2009, while facing another general election in November.
Election officials have said they expect a low voter turnout of around 15% for the special election.
