Voters keep Detroit and Flint mayors in office

Register now

DALLAS -- In Michigan, two mayoral elections will maintain the status quo with Detroit Mayor Mike Duggan winning another four-year term and Flint Mayor Karen Weaver withstanding a recall election.

Both prevailed in landslide victories Tuesday.

The Detroit victory means Duggan gets another four years to usher in the city's expected exit from state financial oversight. Duggan secured his bid for re-election with 72% of the vote against State Sen. Coleman A Young II, 26%, according to the Detroit City Clerk’s office.

Duggan touted neighborhood improvements that will be partially financed through a $125 million bond program. The borrowing, approved by the Detroit city council on Oct. 24, pays for projects aimed at revitalizing the city’s neighborhood commercial corridors. The bonds will be issued through the Michigan Finance Authority and privately placed with JPMorgan this month.

Duggan has said that he expects the city will exit state fiscal oversight by spring, nearly three years after the city exited bankruptcy.

Detroit is restructuring $719 million of unsecured debt the city issued as part of the implementation of its plan of adjustment to exit Chapter 9. Last month Detroit launched a request for proposals to find bank to lead a tender offer and refunding of its financial recovery bonds with the aim of lowering its costs and easing a future escalation of debt service.

In October, Moody’s Investors Service raised the city’s issuer rating to B1 from B2 and also assigned a positive outlook to reflect the possibility of further upward movement if current economic and financial trends persist and enhance the city's capacity to fund long-term liabilities.

In Flint, Mayor Karen Weaver won a recall election taking 53% of the votes versus the 18 other candidates. She will now serve out the remainder of her elected term until November 2019.

The victory means Weaver’s long-term water contract with Great Lakes Water Authority remains on the table. The city council opposes the deal over concerns of increased water rates and has delayed voting on the contract for months, costing the city million is savings.

The deal -- negotiated in April by Weaver with the support of Genesee County, the lead in constructing the new pipeline, along with GLWA and state officials -- would save the city about $9 million by locking in a more favorable rate with GLWA and addressing the $7 million in debt service payments the city is currently obligated to pay on the Karegnondi Water Authority bonds.

Flint was preparing to shift to KWA in 2019 with plans to upgrade its treatment plant to meet federal standards. The city is legally obligated to repay 34% of the $220 million 2014 bond issue that is financing construction of the authority’s 63-mile pipeline led by Genesee County.

On Nov. 3, the state filed an emergency motion requesting that Weaver be allowed to sign the contract ahead of the election. The motion was denied by a federal judge. In June the state asked for a mandatory injunction directing the city to sign the deal with GLWA or present another alternative.

Judge David Lawson has agreed to consider the state’s request, but not before the recall vote. The judge scheduled a hearing on the state’s motion for Nov. 13.

Lawson had previously ordered the city council to decide on the 30-year contract with GLWA by Monday Oct. 23., but an emergency motion filed by the council delayed the decision.

Weaver said last week that she blames the city council for putting Flint "in limbo" over its long-term water source and said it has opened the door for the return of an emergency manager or bankruptcy because of inaction.

In Ohio, Columbus auditor Hugh Dorrian who has held the post for five decades will hand off the baton to Megan Kilgore, a former deputy. Kilgore, who won the seat Tuesday, worked under Dorian for 11 years. For the past two years she has worked as a municipal finance advisor for H.J. Unbaugh & Associates.

For reprint and licensing requests for this article, click here.
Bond elections Lawsuits Private placements Refunding bonds Budgets Revenue bonds City of Flint, MI City of Detroit, City of Columbus, OH Michigan Ohio