Duggan's Water Plan
Last week, News Hits lodged itself inside the "mayor's briefing room" on the 11th floor of the Coleman A. Young Municipal Center to hear Detroit Mayor Mike Duggan unveil his revamped approach to the city's water shut-off initiative. Since March, the city has engaged in an aggressive campaign to shut off water for tens of thousand of residents with delinquent accounts. To put it lightly, it wasn't a well-thought-out campaign.
Flanked by many, Duggan rattled off the thought process behind what he dubbed DWSD's 10-point plan. The mayor told the room the water department would waive any restoration fees or late-payment penalties throughout the duration of the shut-off moratorium, which was extended to Aug. 25. (Besides having to pay a late bill to avert a shut-off, residents typically have to pay a $30 restoration fee.) Customers in danger of having their water shut off will receive additional notification, the mayor said, with bills that offer clear explanations of their status and hand-delivered notices a week before a scheduled shut-off takes place.
Duggan noted that residents have contacted him, describing tremendous difficulty in getting a DWSD employee on the phone to discuss their bill, and said staff at call centers would be increased.
"The way this has been handled has not been reflected well" on the city, Duggan said.
The mayor also announced a new payment plan for residents, the unimaginatively titled but catchy "10/30/50 payment plan." Residents in arrears can enter into a two-year plan by paying down 10 percent of their past-due balance. But, Duggan emphasized, residents can't miss a payment afterward. If a payment is missed, the resident would have to pay 30 percent of their balance; another missed payment, they'd have to pay 50 percent of the balance.
It's needed, the mayor said, because when Detroiters don't pay their bill, the load is picked up by other Detroiters through rate increases.
"We need to be mindful that water stays affordable in Detroit," Dugan said, later adding, "You can't just take a bill and not act on it."
It was an ambitious proposal, considering the mayor had only received control of the water department from Emergency Manager Kevyn Orr a week earlier. If anything, Duggan won the confidence of at least one person in the room: a reporter, who prefaced his question by emphasizing he felt the plan was "great." The reporter cut loose a light round of applause and a quick chortle after the mayor lightheartedly answered his question of who helped cobble together the plan in just one week. Duggan said the process was led by former Fox 2 reporter and current Duggan chief of staff, Alexis Wiley. Hoo-ray. Well done, well done.
Starting this week, a new fund was established for residents to receive as much as 25 percent financial assistance for their bill — as long as they had an outstanding balance between $300 and $1,000 and earned income at or below 150 percent of the federal poverty level, which for a family of four is, at most, roughly $36,000, the mayor said.
DWSD will also hold a water fair at Cobo Center on Aug. 23 from 9 a.m. to 5 p.m., with free parking on the Cobo roof. DWSD staff will be on-site to discuss options available to residents.
"If you haven't taken care of your bill by then," Duggan said, "Come out Aug. 23."
Most in the room appeared impressed by what Duggan said would be an "easier" way for residents to pay their bills. That is, everyone besides an out-of-state reporter who afterward opined that it's still not clear if Duggan's plan would resolve increasing water rates for Detroiters.
Point taken: One thing that wasn't discussed in Duggan's press conference was the possible outcome of negotiations over DWSD, and if it would be spun off to a regional authority or sold to a private bidder. The utility serves over 4 million people across the metropolitan region, and, as officials have noted, it needs a lot of infrastructure work. Critics of privatization have contended that it would only lead to further increased rates. The reporter's apparent point: It seems that, perhaps, this could just be another band-aid on a larger, structural issue.
Get Your Parking Meter
It's not too often we agree with the conservative cranks over at The Detroit News' editorial page — and that trend continued this week, after Capt. Nolan Finley urged Detroit City Council to reconsider a plan to privatize Detroit's parking department.
The council quashed EM Kevyn Orr's request to approve a solicitation for proposals from private bidders who might be interested in purchasing the parking system in part, or in whole. The system includes seven garages, about 3,200 meters (about half of which aren't working at any given time), and a towing operation. Even though City Council denied Orr's request, the emergency manager decided he was going to move forward unilaterally under the powers bestowed upon him thanks to Michigan's novel emergency manager law, PA 436 of 2012.
Still, the News took City Council to task, pooh-poohing their decision to slow down a bit, as the process to sling Detroit's parking system felt rushed.
Saying the council voted "like old Detroit" by denying Orr's proposal, the editorial says: "the move bows to unions and impedes progress as Detroit tries to emerge from bankruptcy."
Finley and company feel that way because, they say, privatization would save Detroit money. Their support for that thin level of reasoning is as follows:
"Consultants for the city said its garages and meters require $40 million worth of improvements over the next 40 years," the editorial says. "The city has already increased parking ticket prices to $45 — a fine higher than tickets in other congested cities — to help cover the costs of fixing some of the thousands of broken meters and offset the administrative cost of processing tickets. Privatized parking systems have been implemented recently in Chicago and Indianapolis. While Chicagoans have protested the move, it has saved money for the financially distressed city."
While the editorial goes on to point out Indianapolis reaps a benefit of shared revenues under their deal, Finley's crew blatantly avoids expounding further on Chicago's disastrous plan, which hasn't been derided solely by Chicagoans — it's been an ongoing joke since its implementation.
As News Hits wrote last month, Chicago's decision to lease its meters to a group of investors for an upfront sum of $1.2 billion hasn't panned out so well. We pointed to Matt Taibbi, former Rolling Stone scribe who's now with First Look Media, and his take on the issue in 2012:
"Mayor Richard Daley sold 75 years of meter revenue — worth an estimated $5 billion — for $1.2 billion," Taibbi wrote. "So he gets 20 cents on the dollar for the city's parking meters in 2008, and then in 2009 the city still has a budget problem that's now worse, because there's no parking meter revenue anymore, ever."
So yeah, "financially distressed" Chicago saved some money in the deal, and soon found its budget to be an issue. Unsurprisingly, the private operator jacked up parking rates. Here's the ringer: According to a report from Bloomberg Businessweek, Chicago taxpayers will spend about $11.6 billion over the duration of the 75-year lease, netting the private investors a roughly $9.6 billion profit.
And, it's worth mentioning, the consultant who designed the lease all those pesky Chicagoans protested is named Desman Associates — the same consultant hired by Orr to put together a report on Detroit's parking operations and potential privatization options.
Hopefully that provides some context to the point Finley's team was trying to make. It saves money(!) ... sort of? — mt