Suspicious Timing in Court Decision on Detroit Public Utility

images[3]In a suspiciously timed move, U.S. District Judge Sean Cox abruptly terminated his oversight of the Detroit Water and Sewage Department, one day before Kevyn Orr, Detroit’s new Emergency Manager, assumes his expanded powers under the replacement Emergency Manager law.

DWSD has been under court oversight for 35 years due to previous EPA violations, and now we are expected to believe that mere hours before Orr steps-up to the throne, the public utility is suddenly able to function on its own.

Democracy Tree reported earlier this month that the future of the DWSD was possibly in the hands of an Emergency Manager, although DWSD is not directly run by the City of Detroit, their board foresaw a forcible takeover of the public utility under the guise of the EM law, for the purpose of privatizing all or portions of the utility. Removal of the long-standing court oversight eliminates the possibility of confusion over the question of authority. (EPA rules be damned).

Circle of Blue reports that the DWSD is unsure how emergency management will impact that public utility. Last month the Board of Water Commissioners passed a resolution with specific questions about the ulitity’s possible relationship with an Emergency Manager – they want to know just how much authority will be granted an Emergency Manager, and if the department will maintain its current autonomy. Circle of Blue speculates that any one of the following scenarios are possible:

  • The utility could be restructured and its management privatized, like what happened in Pontiac, another Michigan city with an emergency manager.
  • The utility could be sold off to investors for a one-time cash bounty.
  • Nothing could change, since the chief problems with Detroit’s finances are the gushing deficits from the city’s general fund.

The DWSD does not receive any money from the City and is not a contributing factor in Detroit’s fiscal woes, but the concern (and it’s a very real one) is that under emergency management the public utility will be seen as a cash-cow to be sold to the highest bidder. Privatization is a troubling prospect, especially with something as vital as water systems. It is difficult to imagine how adding a for-profit layer could help the struggling utility.

A budget recommendation for the DWSD last summer suggested an 81 percent cut in its labor force, with a portion of existing employees being outsourced as contractual workers, bringing the total cut to around 63 percent. John Reihl, of AFSMCE 207, told the Free Press they were “just dreaming if they think they can operate the plant with less.”

The public utility clearly has some very serious fiscal problems of its own. The only reason a Detroit Emergency Manager would wish to inherit the DWSD, in addition to the woes of the City, would be to sell it off for a quick dime.

Amy Kerr Hardin This article also appears in Voters Legislative Transparency Project

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5 Responses to Suspicious Timing in Court Decision on Detroit Public Utility

  1. Brent Snavely says:

    I looks like we are moving toward the implementation of hydraulic despotism, with the despotic power being held by privateers.

  2. anton chigurh says:

    I am so tired to of your rants on the EM . .I get it you don’t like them and think that what should happen in place of an EM when a municipality is on the verge of insolvency based in large part because of poor decisions by the management of the city, school board or what ever is what? Bankruptcy judge? Continue with the incompetents that the incompetent voters elected?

    • admin says:

      To imply that “incompetence” is the cause of these multiple fiscal crises is to demonstrate one’s ignorance of Michigan’s economy along with a possible nod towards racism, inadvertent as it may be. As corrupt as his administration was, Kwame Kilpatrick did not cause Detroit’s economic woes, any more than leaders in Flint, Pontiac, Highland Park, Ecorse, Benton Harbor, Detroit Public Schools, Muskegon Heights Public Schools, and any other school district or municipality teetering on the brink of insolvency have caused their problems.

      Cities and schools that are not currently in crisis, negotiated the exact same contracts, bear the same legacy costs, and operated with the same budget projections as the afflicted communities. The only difference is they did not have their manufacturing base, and subsequently their housing market, and local economy fail due to factors outside their purview, plus get duped by the state…..

      These cities were enticed by Lansing leadership to restructure their tax revenue streams and thereby promised compensatory revenue sharing from the state which was subsequently withdrawn in one of the most obscene bait and switch schemes known. Then upon their economic troubles, the finger was pointed at the perceived “incompetence” and “corruption” of their leadership.

      This past week, former Gov. Bill Milliken put the message out that disinvestment in Detroit and other major urban centers in Michigan is utter folly, and done to the detriment of the state as a whole. Emergency Managers are all about cut-back management — parting-out communities like an old buick.

      No, we can not “rant” enough about the Emergency Manager law.

      • anton chigurh says:

        I knew it. It was only a matter of time. Anybody that questions your, or most progressives, views is sooner or later slapped with the racist label.
        Among other things you now are a mind reader and able to interpret my inter thoughts.
        Trust me KK and those that served years before him through their policies exacerbated the economic situation. Other cities faced the same issues as Detroit, Flint etc but reinvented themselves when the auto companies and other heavy manufactures moved to more fertile ground. Pittsburgh? Cleveland?
        Detroit since the mid 70s and the start of Colemen Young’s reign Detroit has been on a downward spiral. Young was known for his epic battles with the suburbs which he played to the delight of his constituents and the rest is history. I guess that since I made mention of another black person the confirms in your mind that I must be a racist even though I am stating the way it was as I lived in Detroit through the late 80s and sadly saw the demise first hand.
        But I could be wrong as Jimmy Carter supposedly referred to Colment Young one of the greatest mayors of all time. I wasn’t aware that Carter spent that much time in Detroit but I guess he is entitled to his opinion.
        To burst your bubble it is not a black thing or a white thing it is an incompetent political game that many big city mayors play.
        I happen to support many of Mayor Bings initiatives unfortunately he has to deal with the remnants of the past 35 years. I’m sure that you think that Bing is not black enough for you to take me off your racist list.
        Not many folks seem to comment on your blog . . . it is probably a waste of my time to state my views as I suspect few if any read this other than you.

        • admin says:

          Sure Anton, your’re not racist at all. And the 16,000, or so, monthly readers of my blog won’t think so either. Opps, sorry you must be right… this month Democracy Tree hit only 15,882 readers…we are clearly slipping into oblivion. We would be happy to direct you to some “popular” conservative blogs. Amy

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