Judge sides with Warren City Council in dispute with Mayor Jim Fouts

A visiting Macomb County Circuit Court judge on Thursday sided with the Warren City Council in its effort to stop Mayor Jim Fouts from spending city funds that members say violate the law in a brewing battle over who has the right to spend money from the budget.

Council members in the state's third largest city said Fouts intentionally and illegally spent $675,000 from the Downtown Development Authority that was not approved by the City Council for television ads and promotions.

Visiting Judge Denis LeDuc issued the preliminary injunction against Fouts, who also serves as the DDA's chairman, writing that it's "in the public interest" to rule against the mayor.

"If the injunction is not granted, then funds can be unlawfully used to improperly fund items on the budget and take away from other proper items on the budget," LeDuc wrote. "This will negatively impact the city of Warren and will cause a hardship on the city council to reapportion funds to meet the terms of the budget."

The feud between Fouts and the City Council has been building for years with members saying he has been illegally using city funds to promote himself while the mayor claims the City Council had not been following proper budget procedures. He has also filed a lawsuit in Macomb County Circuit Court.

LeDuc said the injunction does not cause a "hardship on Fouts. In the event Fouts prevails in this case, the only hardship from the injunction would have been a pause on any of the projects his recommended budget was set for."

Fouts said in a statement the ruling "was a preliminary injunction, not a final ruling" and that he would appeal.  

“I respectfully disagree with the judge’s ruling, but I am grateful for how fast he made it," Fouts said. "My team has a city to run, and we need answers. Practically speaking, the decision will freeze spending for the DDA; although that is inconvenient, it is probably best, until we have a final decision on how to view the budget. Because I continue to believe that no branch of government rules supreme, I want to test today’s ruling on appeal.   

Patrick Green, the City Council president, said he is pleased with the ruling and said this at least temporarily stops Fouts, whom he described as a "rogue mayor," from "breaking the law." 

Green said that in the previous 2020 budget, there were line items for the DDA for capital appropriations like chairs for the library and a roof for the police station but a closer look showed the money wasn't spent on those items. The council adopted a budget and the mayor declined to follow it, he said.

"This is the point that we're at," Green said. "Either he's going to be prosecuted or he's going to start following state law on how cities are run. I agree on the premise that he's popular but I think popularity begins to wane when you find out that (he's) appropriating dollars illegally."

The City Council alleged that Fouts violated the Uniform Budgeting and Accounting Act and the city's charter by enforcing his budget that the members rejected, a point the judge cited.

In May of 2021, City Council approved a $292 million fiscal year budget but slashed $615,000 in the DDA for contractual services that was being used for a TV ad campaign. It also reduced community promotions in the DDA budget from $75,000 to $10,000. Fouts, the City Council alleged, directed city finance staff and the DDA that the city was going to use his budget instead of the one approved by the councilmembers.

"The DDA is supposed to be working on developing a downtown and we love the project that the mayor brought to us," Green said. "But the spending mechanism is what we objected to."

lfleming@detroitnews.com

Twitter:@leonardnfleming