By COREY WILLIAMS, Associated Press Writer

DETROIT, Jan. 16, 2009 (AP): The city's former mayor is serving a four-month jail sentence. Its deficit could top $200 million. Hundreds of layoffs are planned. And Detroit's municipal bonds are now at junk status.

The upcoming special nonpartisan February primary to fill the remainder of Kwame Kilpatrick's second term could well be one of the most pivotal elections in city history.

Fifteen candidates are vying to lead this city in crisis, with the top two vote-getters advancing to a May runoff.

Despite the bleak fiscal situation, the shadow of a nearly yearlong text-messaging sex scandal between the married former mayor and his ex-chief of staff hovers over the race and candidates.

``It's all about leadership and management,'' said Louis Schimmel, director of municipal finance for the Midland-based Mackinac Center for Public Policy. ``But if you don't start out with an honest person, nothing else matters.''

Kilpatrick and Christine Beatty are serving time in the Wayne County Jail after entering pleas to charges stemming from testimony each gave during a 2007 whistle-blowers' trial. They were accused of lying under oath about having a romantic relationship and about their roles in the firing of a high-ranking police official.

Kilpatrick's political career went into free-fall as details of the scandal surfaced, while at the same time the city's long-deteriorating fiscal shape became more evident.

International rating agency Standard & Poors earlier this month downgraded the city's bond status to ``junk.'' Moody's Investors Service on Tuesday also downgraded Detroit's debt status.

Over the years, people in charge were ``not competent of the financial situation,'' Schimmel said.

Ken Cockrel Jr., who as city council president automatically assumed the mayor's office when Kilpatrick stepped down Sept. 18, is working on a balanced budget and plan to reduce a deficit that could reach more than $200 million. He has grudgingly promised layoffs of possibly hundreds of city workers.

His challengers, and others, are closely watching the moves he makes.

``The banks are listening. Wall Street is listening. Rating agencies are listening,'' said Freman Hendrix, who served as deputy mayor under Kilpatrick's predecessor, Dennis Archer, and lost to Kilpatrick in 2005.

How the city moves into the black is one big question. Cockrel's plan, which was expected in early October, has yet to be released. Cockrel, who is running in February's primary, has moved its release date to sometime this month.

``I didn't make this mess as mayor, but it is my responsibility to clean it up,'' Cockrel told The Associated Press on Thursday.

Even as council president, Cockrel said, he wasn't ``privy'' to the city's true financial picture under Kilpatrick.

``What we've been dealing with is a mayor who lied to the city,'' he said. ``When you're mayor, you have a lot of power. You can sit on things you want to keep hidden.''

Hendrix believes some things in city government still need to be revealed. If elected, he promises to ``turn loose'' a six-person police task force to ``weed out'' fraud and corruption by city employees.

``There are still cell phones on for people who don't work in this city; people gassing up at pumps who don't work for the city,'' he said.

Hendrix is among the many prominent community leaders and politicians whose names are on the Feb. 24 ballot. Others running include prominent pastor and former city councilman Nicholas Hood III; state Rep. Coleman A. Young II, whose legendary father Coleman A. Young was Detroit's first black mayor and held the office for two decades; and local businessman and ex-Detroit Pistons star Dave Bing.

Bing had been a Kilpatrick supporter, even serving as co-chair of the ex-mayor's neighborhood improvement initiative. The city's swoon over the past few months convinced him to run for mayor, Bing has said.

Schimmel, who works with distressed communities and provides fiscal analysis for the Mackinac Center, a free-market think tank, believes Bing's decision to run was wise.

``We need a successful businessman who is not a thief ... a guy who isn't out for his own personal gain,'' Schimmel said.

One of the candidates, Sharon McPhail, spent months working with Kilpatrick's legal team to keep details of the $8.4 million settlement in the whistle-blowers' case and hundreds of text messages between the mayor and Beatty from the public.

She said she's not sure if her work as Kilpatrick's legal counsel during the scandal will hurt in the election.

``It depends upon the voters understanding the role of the lawyer,'' she said. ``I was his lawyer. You can't go out and say 'my client is guilty.' It doesn't even matter if he is.''

McPhail lost to Archer in the 1993 mayoral race and finished behind Hendrix and Kilpatrick in the 2005 primary. Like Hendrix, she believes the city needs ``somebody with the background and experience and toughness to fix'' Detroit's finances and other shortcomings.

City government must be transparent, something it lacked during Kilpatrick's years in office, said another candidate, Wayne County Sheriff Warren Evans.

``What really pulled the trigger for me to run was, because of the scandal, city government was not moving forward,'' Evans said. ``Nothing was getting done.''

Whoever wins the May runoff won't have much time in office before the race begins for the next mayoral term. That starts with an August primary, followed by the November general election.

Like many of the other candidates, Evans said he plans to run again in August.

``I don't see this as a one-year job, and certainly not a one-term job,'' he said. ``It's a job you have to be committed to until the city is in good shape.

``We don't have a lot of time not to get it right.''