Is Duggan the Transformer?

Mayor Duggan-1-7-1_opt
Detroit Mayor Mike Duggan has been in office now for a little over a year. Thirteen-and-a-half months to be exact. In this exclusive interview Duggan sits down again with Bankole Thompson, editor of the Michigan Chronicle, on the 11th floor of the Coleman A. Young Municipal Center, this time to review his first year in office. The mayor opens up about issues facing his administration. He says auto insurance reform is his top priority now as he and the Detroit delegation in Lansing begin the process of crafting a bill he believes will have the support of Governor Rick Snyder, insurance industry groups and GOP leaders in both the House and the Senate to lower rates in Detroit. Duggan candidly talks about his relationship with Snyder and the Detroit City Council, Detroit’s current tough mortgage climate and the role of banks in the city’s recovery, how his cabinet meetings are run, the Great Lakes Water Authority and his visits to the White House, among other issues. Following are excerpts.
MICHIGAN CHRONICLE: What concerns you the most right now in the city?
MIKE DUGGAN: Right now I’m very concerned about violence. It’s interesting we’ve got some areas like Southwest Detroit where we’ve got a real strong partnership with the feds. They just did the gang arrest that is being pretty stable. We’ve got other areas where the violence is starting to grow. Overall the crime is down. We’ve got murders up this year. We’ve got break-ins in neighborhoods we don’t normally see. So I’m spending more and more time with Chief Craig on that issue. I’m spending a lot of time on the buses to make sure we do make schedule by the middle of the year and then the rest of my time on car insurance. I’m going to be sitting down with all the Detroit legislators at the Manoogian (Mayor’s) Mansion on Saturday morning. We are going to go over our plan for our legislation and we are going to see if we can get a bill through.
MC: How would Gov. Rick Snyder play a role in this? When I spoke with him months ago about this he said he was willing to have the conversation, but you had yet to make a request to him.
MD: I don’t speak for the governor but they know what is coming. We’ve had a lot of conversations. I expect he is going to be supportive. We’ve had conversations with the leadership in the House and the Senate about what we are going to come forward with. But I want a Detroit option for D-Insurance to offer a lower rate, lower benefit option that is not currently allowed by the no-fault law. You’ve got much bigger statewide fights than the no-fault. So what I need to do is make sure that everybody agrees on the Detroit option in the bill. And then second we’ve got to get a bill first. So far all of the groups we’ve talked to, including insurance industry groups, I think are going to be supportive of the Detroit option proposal we‘ll be coming out with. The question is, can you get enough people to agree on the other provisions to get a full bill through? I’m going to spend a lot of time this year doing that.
MC: So this is not going to be the much anticipated Armageddon war that some expect you would be waging against the insurance industry?
MD: You know I never saw it as an Armageddon war with the insurance industry because given the politics of Lansing, we wouldn’t win. So what I’ve tried to do is come up with plan that is actuarially sound, that could apply to cities where the insurance rate is 50 percent higher than the surrounding communities, which is in Detroit and allow us to offer a D-Insurance, where we sell it ourselves or we license the insurance carriers. It would have less benefits and lower price. Right now on average the average Detroiter is spending $3600 a year to insure their car. The average suburbanite is spending $1800 to insure that same car. So I want an $1800 option.
That option is going to have less benefits, but you are going to have a choice. You can pay $3600 for the full benefit option or you can pay $1800 in Detroit for the limited benefit option and we would license it under the D-Insurance brand. And I think we are very close to something that even the insurance industry agrees works. So we would have to see how all the politics plays out. But a huge amount of the waste is in the health care side now. Some of my friends in the health care industry may be on the other side of this argument than people in the insurance industry.
MC: So you obviously need the support of the GOP members on the other side of the state?
MD: Or you can’t do anything in Lansing. On the other hand, if we’ve got the right package I think I can bring Detroit­ers to the bill as well. There aren’t too many issues more important for Detroit­ers these days than car insurance. So we are in a good negotiating position, assuming the Detroit delegation supports the bill and we potentially could break the deadlock in Lansing.
MC: What is your relationship with the Detroit delegation? Some previous mayors have had a contentious relationship with the group where members of the delegation say they hardly hear from the mayor. In other cases, the mayor shows up in Lansing without knowledge of the delegation.
MD: Well, last year I had three different breakfasts with the legislators on Saturday mornings at the Manoogian. I had several meetings with them both in Lansing and in this office (Mayor’s Office) and in individual cases I had even more. But if you just look at the bills that we passed the week before Christmas, we put through the foreclosure bill I think with a hundred percent support of Detroiters, we put through the fire escrow bill where we’ve got $7 million of fire escrow money that we couldn’t get through in order for demolition. We got the bill that allowed us to create the Renaissance Zone in the area near city airports for the manufacturing facilities.
I think we had all Detroiters (delegation members) on every one of those votes and it’s been a great relationship. The thing is as the Republican caucus has gotten larger, interestingly, it’s gotten more contentious. When you can bring 8, 10 votes you are in a position where you could sit down and negotiate variable terms. The 12-cent gas tax bill that went to the Senate would have been very favorable to Detroit. Unfortunately, the governor couldn’t get it through the House but we brought the votes that got the 12-cent gas tax bill through the Senate.
MC: L Brooks Patterson in his State of the County Address basically said let’s not get ahead of ourselves on the Great Lakes Water Authority because there is still work to do. Do you feel the same way?
MD: There are a lot of complicated issues. They are on a good track. I am very optimistic that by July 1 the Great Lakes Water Authority will be up and running. The original agreement we signed last fall said that by July 1 there would be a lease in place where Detroit would lease the regional assets of the water authority, and we are on track I believe to get that done.
MC: What specifically have your district managers been able to do in the overall governance of the city?
MD: On blight issues I think most people realize that now there is somebody who can pay attention to their individual issues in their neighborhood. I think the district managers are enormously popular in the great majority of the districts.
MC: You mentioned that your cabinet meetings are on Wednesdays. What are those meetings like?
MD: They start exactly at 9 am and end exactly at 10 am. The first 20 minutes somebody presents on what they are doing. It could be the fire department presenting on the new hydrant inspection process, it could be Gary Brown presenting on the new parking meters. Then the next 40 minutes is each of the departments presenting on other metrics from the week before talking about why they made their numbers or if they are missing their numbers. It is a very inter-collegial process.
MC: You are satisfied with your cabinet? Any shake-ups?
MD: Shake-ups? (laughs) You are always looking to upgrade. I’m not satisfied with myself. So I don’t think anybody is feeling like they are comfortable where they are. But I think the team is strong. I think the addition of Maurice Cox to be planning director is critical. I think it’s going to be huge. I need to get a health director now. Vernice Anthony retired the end of last year and so I need to get a new health director, which is probably our number one recruiting effort. But you always have a natural process to upgrade, but I think the team that’s here now is doing a good job.
MC: You’ve been to the White House several times now for meetings. What would you consider a win in those meetings?
MD: Certainly the fact that 80 new buses, 30 are here and the other 50 will be here between now and August. We got allocated quarter of all of the bus grants in the country. The last allocation of $50 million in demolition money which will start in about two weeks, as soon as the frost laws are lifted, we could put the heavy trucks back on the roads. This is going to allow us to take down another four thousand houses this year which is very beneficial. But it’s also going to help in a lot of other ways. The White House was influential with JP Morgan Chase doing the $100 million dollar investment in Detroit.
You are going to see some announcement coming out of some of the other major banks very shortly. I was at the White House last week encouraging funding for more Assistant U.S. Attorneys for Barbara McQuade (U.S. Attorney for the Eastern District of Michigan) to prosecute gun cases. We’ll see whether that comes out or not, but it’s been a great relationship. I probably talk to the White House or cabinet secretaries twice a week about what we are trying to do together. It’s very collaborative. They want to invest in places that produce results. Right now I think the Obama administration believes that every time they partner with us, we deliver results.
MC: What do you see as the appropriate role of banks in Detroit’s recovery?
MD: Certainly what JP Morgan Chase is doing is just outstanding. They are making loans that are renovating businesses and apartment buildings, and are supporting the Land Bank. We’ve got to get home loans open in this state, in this city far more easily. Last year, we had four thousand houses sold in the city of Detroit and only 400 of them could get a mortgage. It’s ridiculous that 90 percent of the home sales in this city can’t get a mortgage. At this point everybody, including the president who I had a long discussion about this when he was here, the Treasury Secretary, all the bank presidents understand the problem. Is a complicated problem. It has more to do with families than the banks and it has to do with the appraisals. You’ve got a whole lot of people working on this and I think we are going to have an announcement in the next few weeks. One of the banks is going to come through with a significant source of home loans that would help open this up. Right now what we need more than anything is for people who are paying $800 a month in rent to be able to get a mortage for $500 to buy the same place. That’s something I spend a lot of time on.
MC: What lessons have you learned being in this office for a year now? Any disappointments?
MD: I don’t know about disappointments. I’ve been very pleasantly surprised at how supportive the people of this city have been. The encouragement I get in every corner of this city, I can’t stop at a red light without somebody honking their horn and waving, and a lot of times they are surprised I’m driving myself. But any place I go people are just enormously encouraging and they will say, “Thank you for the streetlights,” and then they will say, “What are you going to do about the abandoned houses?” But they do it in a way that they think I’m going to do something about it. The job’s been easier than I thought it was going to be mainly because the people in the city have just been so encouraging.
MC: Why do you still drive yourself?
MD: I’ve driven myself in the city since I got my license up to my 60th birthday. It never occured to me to let anybody else drive me.
MC: But you are now the mayor and it’s a different dispensation.
MD: As far as I’m concerned I can perfectly drive safely around in the city. Security meets me when I go into a gathering.
MC: Does your relationship with Governor Snyder mean Detroit is going to get more in Lansing?
MD: Well, I’m getting along with him a lot better this year than last year. Obviously there was a lot of tension between us over the appointment of an emergency manager. But since Kevyn Orr left December 15, the governor and I have gotten along better. Everything is about mutual interest. I sat the governor down and explained the foreclosure process and explained why we needed to be able to have the 6 percent payments to be able to write down the excess back taxes.
He supported that bill and got it through. There are thousands of people who are avoiding foreclosure right now through the treasurer’s office because the governor supported us in that bill in December. It was the kind of thing that didn’t hurt the rest of the state but was good for Detroit.
There are a number of things the governor and I aren’t going to agree on. I don’t spend a lot of time on those things, but on the things that help Detroit, that do not hurt anybody else in the state. I’ve got a relationship where I can sit down and say here are the things I want to do. He understands what I want to do on car insurance, and I think we are going to find a way to get that down.
MC: With the Detroit City Council do you agree more than you disagree or is it the other way around?
MD: Oh, I think council and I agree probably more than 90 percent of the time. Maybe 95 percent.

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