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Caller alleges Detroit bond issuances violated state law and favored negotiated sales
Summary
During public comment Malik Shelton accused the city's finance office of issuing LTGO and UTGO bonds without following Michigan notice and referendum law and criticized negotiated sales and high interest rates.
Malik Shelton used his allotted public-comment time to challenge recent municipal bond issuances and the process used by the city's finance office.
Shelton said the Office of the Chief Financial Officer issued hundreds of millions of dollars in LTGO (Limited Tax General Obligation) bonds and UTGO (Unlimited Tax General Obligation) bonds without following Michigan public-notice, public-meeting and referendum requirements. “These issuances was a clear and flagrant violation of Michigan state law,” Shelton said.
Shelton also questioned why the city issued bonds by negotiated sale rather than competitive sale and why interest rates were “approximately 5% or 5.5%,” which he said is high given the city’s credit ratings. He argued that federal bankruptcy courts cannot be used to override state law and invoked the Tenth Amendment in his critique.
Shelton’s statements were assertions made during public comment; no council response or formal action on the bond process was recorded in the public-comment segment of this meeting.
