Becoming mayor of a bankrupt city
As if one of the toughest jobs in politics wasn't hard enough.
Happy Finance Friday! Big news this week in the story of Chester, Pennsylvania’s bankruptcy: two-term Mayor Thaddeus Kirkland—who recently said he didn’t take any responsibility for the city’s financial woes—is out. In Pennsylvania’s primary election earlier this week, he lost his re-election bid to first-term Councilmember Stefan Roots and it wasn’t even close. There is no Republican candidate for mayor, so the primary election in Chester essentially determines the ultimate winner.
This week, I’ll look at what mayoral races during bankruptcy can signal, what others have done well and where they’ve gone wrong.
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City elections during bankruptcy
Kirkland certainly isn’t the first mayor of a bankrupt city to be voted out of office. In fact, it’s pretty much a pattern. The mayors of Stockton, California, and Central Falls, R.I., were both voted out of office at the first opportunity. Detroit Mayor Dave Bing didn’t even run for re-election after the city filed for bankruptcy in 2013. Still, given Kirkland’s political connections and sizable war chest, the outcome of Chester’s mayoral race was not at all clear heading into Primary Day.
Roots has frequently been the lone councilmember who has not opposed the city receiver’s various actions to resuscitate the city’s financial health, including restructuring via Chapter 9 bankruptcy. He writes the popular “Chester Matters” blog and told Philadelphia Inquirer’s Anthony Wood on Wednesday that it was his intent “to turn the city around. Some problems need to be fixed…some relationships need to be mended…some money needs to be found.”
Kirkland and his supporters on council have fought receiver Michael Doweary’s every move to implement tighter fiscal controls on the beleaguered city, including continuing to oppose bankruptcy even as creditor opposition fell away. They have argued that the city’s financial position can be fixed outside of bankruptcy court and the receiver is exaggerating the severity of the situation.
But Doweary’s office has been doggedly releasing clear and factually-based information about the city’s financial status through regular public meetings and active social media accounts.
This week, Chester’s residents used the ballot to make it clear who they believed. In a primary where turnout was a full one-third higher than the previous election, unofficial results show Roots with 61% of the votes compared with 22% for Kirkland. City zoning board member Pat Worrell finished third with 17%. Not only did voters oust Kirkland, whose long political career includes 23 years in the state legislature, his two main supporters on council were also voted out.
Read more of my Chester coverage
The warning signs of insolvency
The outdated and parochial way to run cities that just won't go away
A major turning point for Chester
By most accounts, the elected officials’ opposition to Doweary’s attempted takeover of city finances has dangerously stalled progress. The leadership change won’t happen until Jan. 1, but it’s entirely reasonable to think that Doweary will be able to make more progress on negotiating with creditors and hiring professionals to fill staff and administrative positions. The sooner the city can get on with right-sizing its finances, the sooner it can start healing.
But leadership changes in the middle of financial turmoil can be tricky. Roots has the benefit of being seen as a change agent with a pretty clear mandate from voters, but he will take office at a time when the city’s whole governance format could be restructured. Roots will need to walk a potentially delicate line between working with the receiver while also clearly outlining and advocating for the mayor’s role and policy priorities.
Some people have done that successfully, others not so much.
3 lessons from mayors of bankrupt cities
Lin Manuel Miranda nailed it when he wrote in the musical Hamilton, “Winning was easy, young man. Governing's harder.”
Here’s what the administration changes in Central Falls, Detroit and Stockton during their bankruptcies can teach us.
Get it in writing
When Mike Duggan was elected mayor of Detroit in 2013, he and emergency manager Kevyn Orr ironed out a working agreement. The deal marked a fresh start compared with the circumstances under outgoing Mayor Dave Bing, whose powers were greatly constrained under receivership.
The agreement between Orr and Duggan took six weeks of negotiations and was signed by both of them. Orr ran the city’s finances, the restructuring negotiations in court and the Detroit Police Department. Duggan took over the city’s blight removal efforts and appointed all personnel in the city’s executive branch who are not part of the civil service. Importantly, the agreement didn’t specify responsibilities—which can lead to nitpicky conflicts that slow things down—but instead relied on guiding principles.
Go big but stay home
Just months after Stockton filed for bankruptcy in 2012, Anthony Silva cruised to victory over incumbent mayor Ann Johnston. But Silva’s term was marked by scandal and little progress on top issues like crime and poverty even after the city exited bankruptcy in 2014.
Michael Tubbs in 2016 became Stockton’s first Black mayor and its youngest ever. He had local and national appeal for his story—that started in a single-mom household on the poor side of Stockton and ended with a scholarship to Stanford University—and his progressive ideas. He’s known as the UBI mayor for being able to woo big dollars to the city to pilot the nation’s first universal basic income program. But in 2020, he was resoundingly defeated. By a Republican.
In a post-mortem by Politico, it’s clear that Tubbs’ national attention and time spent on the road championing his ideas for Stockton rubbed people back home the wrong way. As Dan Wright, Stockton’s vice mayor and a supporter of Tubbs, noted at the time, people in Stockton “resent when somebody gets a statewide profile or, in Michael’s case, a nationwide profile… It’s, ‘Who does he think he is? Too big for his britches?’”
Focus on quality of life
When Central Falls Mayor Charles D. Moreau resigned amid scandal in 2012, the city was just emerging from bankruptcy. James Diossa, a 27-year-old councilmember, won in a special election to become the city’s youngest and first Latino mayor. Diossa understood the importance of local services. During the bankruptcy, he’d raised funds to reopen the city’s only library and thwarted an attempt to close its only post office.
He carried that same mindset into his job as mayor by focusing on improvements to infrastructure, upgrading sanitation equipment, hiring more police officers and opening a tutoring center serving bilingual kids. Diossa also managed to woo an auto show to Central Falls and helped launch a monthly Salsa Night in the summer that had a regional draw. This commitment to community included securing millions of dollars in federal, foundation and private sector funding.
Diossa fared pretty well too. After term limits prevented a third run, his record of restoring order and optimism to a bankrupt city undoubtedly played a role in his successful bid for state treasurer last year.
Getting Chester out of bankruptcy will be determined by my ability to navigate between the traps and the trampolines. Thanks for the road map.