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