Detroit's best-dressed man aims to mend Motown

By John D. Stoll

(Reuters) - The Big Three U.S. automakers may be on the rebound but the original Motor City, Detroit, is still battling to turn the tide of decline. One of the people leading the fight is Charles Pugh.

An ex-television broadcaster known for a swanky wardrobe and outspoken presence, he was solidly voted in as president of Detroit's city council two years ago, carrying a mandate to clean up corruption and undo decades of mismanagement. But battles over strip-club legislation, water bills and inflated budgets defined his early days in office.

"We were the public piñata," he recalls. "I wanted to quit."

Two years later, the auto industry's Big Three -- General Motors, Chrysler and Ford -- have moved on from the worst of the financial crisis, but the city has fallen further into the mire. With $350 million (222 million pound) in annual retiree pension and health-care costs and a shortage of cash, Michigan state officials are considering installing an emergency manager to run the finances of the state's largest city.

Under the worst-case scenario, Pugh's city council -- which costs about $1 million per month to operate, or more than the cost of the public works department -- could be stripped of its power to approve contracts, scrutinize budgets and handle zoning issues.

Pugh, a Democrat who counts Detroit singer Aretha Franklin among his friends, has his own set of problems.

After taking a two-thirds pay cut to join government, he shelved his cable TV service, started packing his lunch and paired back cell service. It wasn't enough -- his tony midtown Detroit condo is headed back to the bank via foreclosure or short sale.

"I can no longer afford it," he said. "Going through this whole fiscal crisis with the city, I learned you can't live at your means or just above. You have to live below."

Detroit has long been in short supply of leaders willing to face up to such cold realities of life.

In 1970, Detroit was the fifth-biggest city in America with 1.5 million people. Now, it has a population of about 700,000. In recent decades, mayors and councilmembers have assumed a reversal of that ongoing population decline would spur economic revival, bolster tax revenue and repair a deteriorating quality of life.

Pugh, who is weighing a run for mayor next year, isn't sticking to the script. "We're no longer a big city ... we're going to get smaller," Pugh said. "Our population probably will end up around half a million."

DETROIT'S BEST-DRESSED MAN

That is just one of many unconventional opinions carried by the 40-year-old council president.