Tag Archives: Michigan

Regional authority a prelude for privatization of Detroit water system

Source: Jerry White, World Socialist, September 12, 2014

The deal crafted earlier this week putting a regional authority in charge of the Detroit Water and Sewerage Department creates the political and legal foundation for the largest privatization of a municipally owned water department in the United States. ….The bankruptcy and moves toward the privatization of the water department are fully backed by the Obama administration, which has pushed cash-strapped cities to enter “public-private partnerships” to fill the gap from reduced federal and state funding for infrastructure needs, just as it has done in public education and health care. Under the agreement signed by Detroit Mayor Mike Duggan and executives from three metropolitan area counties, the city will lease, for 40 years, pipelines servicing suburban communities in exchange for $50 million a year payments. A new six-member board made up of unelected officials—two from Detroit, one each from Wayne, Oakland and Macomb counties, and one appointed by the governor—will make decisions on water rates, contracts, labor agreements and the privatization of services….

Source: >Mitch Jones, Food and Water Watch blog, September 9, 2014

Earlier today, Detroit and three of its suburbs announced the creation of a new, independent regional water authority. The deal creating the authority is part of the ongoing bankruptcy proceedings in Detroit. And while it’s being sold as a panacea to the woes of Detroit’s water system, it’s anything but. In fact, it’s another false solution that will likely leave Detroiters worse off than they are already — with no way to hold decision makers accountable. The city and the suburbs released the Memorandum of Understanding (MOU) that forms the basis of the agreement. A reading of the agreement reveals that it will likely lead to the privatization of the water system. The creation of the regional authority, the Great Lakes Water Authority, corporatizes the system by putting appointed, unelected officials fully in charge of the big decisions that determine the cost and quality of service. The agreement treats water provision as a business instead of a public service. Corporatization itself is the first step to privatization. The new authority can privatize the management and operation of the water and sewer system without real city input or public approval. Currently, the Detroit city council must approve any privatization deal because it has oversight of water contracts worth more than $2 million. With this new agreement, the city council will lose that power. In fact, an independent authority will not give ballot-box accountability to county residents, either; it will just cost city residents their ability to hold the system’s decision makers accountable….

Detroit Agrees To Lease Water System To Neighboring Counties
Source: Quinn Klinefelter, NPR, Morning Edition, September 10, 2014

As Detroit struggles to emerge from bankruptcy, the city reaches a historic deal. After years of acrimony, the city and its suburbs have a tentative deal to share control of Detroit’s water system….

Detroit water department questioned for contracts, avoiding council scrutiny
Source: Joe Guillen, Detroit Free Press, August 29, 2014

After the Detroit City Council refused to support a $48-million no-bid contract with a consultant proposing massive job cuts, the Detroit Water and Sewerage Department board hired the consultant, anyway, approving a series of less valuable contracts small enough to avoid the council’s scrutiny. The Board of Water Commissioners has approved four contracts since November 2012 with consultant EMA, each worth $2 million or less — just below a threshold requiring additional approval for a service contract. The contracts are for work that was initially part of the larger $48-million contract. The council is now questioning whether two sewer construction contracts with Lanzo Cos, totaling $30 million, also were sliced up into $5-million increments to avoid a council vote. This summer Detroit’s inspector general launched an investigation into that deal. … The contracts with EMA, based in St. Paul, Minn., are designed to help the water department undergo its own internal restructuring by evaluating job descriptions, the department’s information technology network and assets of the water system. But rather than lump those contracts into one deal, the water department over eight months approved contracts of $2 million, $1.99 million, $1.99 million and $1.55 million. It approved its first $2-million contract with EMA a week before the council’s refusal to approve the $48-million deal. The most recent two contracts were approved at the July 2013 meeting of the Board of Water Commissioners. …

Private firm to look at Detroit water department, seek cost savings
Source: Joe Guillen, Detroit Free Press, August 22, 2014

An international private water operator that has shown an interest in managing Detroit’s water department has been hired to evaluate the department’s operations, water director Sue McCormick announced to her staff this week. Veolia Water is expected to review the Detroit Water and Sewerage Department’s finances and staffing and will provide recommendations for cost savings, McCormick said in an internal memo obtained by the Free Press. ….

No “grand bargain” for Detroit’s water department, as Orr considers private bids
Source: Sarah Cwiek, Michigan Radio, June 4, 2014

As “grand bargain” legislation sails through Lansing, the fate of Detroit’s water department could become the biggest issue holding up a speedy exit from bankruptcy. Detroit emergency manager Kevyn Orr maintains the city needs to find some way to generate revenue from the system, which serves more than 4 million people in southeast Michigan.

Detroit EM office reviews bids to privatize Water and Sewerage Department
Source: Joe Guillen, Detroit Free Press, June 2, 2014

Detroit emergency manager Kevyn Orr’s office is studying several bids to privatize the Detroit Water and Sewerage Department and could have a selection process completed within two weeks, a spokesman said Monday. But Orr spokesman Bill Nowling would not release any information about which companies submitted bids by Sunday’s deadline to operate and manage the system relied on by millions of people in southeast Michigan. Nowling said the bids are considered confidential under a federal mediation order.

Detroit Plan to Profit on Water Looks Half Empty
Source: Mary Williams Walsh, New York Times, May 25, 2014

As Detroit seeks to settle its debts and chart a viable course for the future, one of its best sources of revenue, clean water for sale, may be evaporating. The fresh water in Lake Huron is still plentiful, but the customers are having second thoughts about Detroit and its vast, aging water system. Detroit pipes much of its water from the lake, and Detroit Water and Sewerage, the city’s water department, sells it wholesale across southeastern Michigan, generating about two-thirds of the city’s water revenue.

Opinion: Privatize Detroit water for the public’s benefit
Source: Joe Recchie, Peter Hammer, Detroit News, May 7, 2014

One of Detroit’s most valuable assets and a key to its long-term fiscal health is hidden in plain sight: its expansive water and sewer system. Safe and affordable water is far more than a commodity. Access to water is a fundamental right with profound economic and sociological repercussions. The city of Detroit should treat it as such. Currently, the city has explored only two options regarding utilities: either forming a Great Lakes Regional Authority or pursuing privatization by selecting one of several dozen proposals submitted by major corporations. A better solution exists. The Detroit Water and Sewerage Department should be transferred to an entity that directly benefits the people of the city that established it. ….

Metro water group calls Detroit’s regional proposal ‘viable solution’
Source: Nathan Bomey, Detroit Free Press, May 2, 2014

A water group representing 11 Oakland County communities and a collection of western Wayne County municipalities has said in a court filing that a regional water authority is a “viable solution” to Detroit’s bankruptcy restructuring, potentially giving new life to the proposal and undercutting the Oakland County government’s bid to block a deal. The Southeastern Oakland County Water Authority — whose membership includes Royal Oak, Birmingham and Southfield — filed a motion in Bankruptcy Court this week requesting entry into confidential mediation talks between Detroit and Oakland, Macomb and Wayne counties…..

Detroit: Bankruptcy water deal with suburbs is dead, unless court orders mediation
Source: Nathan Bomey, Christina Hall and Bill Laitner, Detroit Free Press, April 14, 2014

The City of Detroit has ended negotiations with Wayne, Oakland and Macomb counties over the potential spinoff of the city’s water department as a regional authority, but the city and counties signaled they haven’t ruled out a deal entirely. After Wayne County last week asked Judge Steven Rhodes to appoint a mediator to resolve the dispute between Detroit and the counties, the city asked Rhodes to reject the request. Detroit bankruptcy attorneys said in a court filing that they have ended talks with the counties, leaving the possible privatization of the system as the city’s main focus….

Editorial: What we’d lose by privatizing Detroit’s water system
Source: Detroit Free Press, April 6, 2014

Detroit’s fast track to private water risks high rates, bad service, experts say Oakland County seeks alternatives to ‘monopolistic’ Detroit water and sewer The meltdown over the future of the Detroit Water and Sewerage Department is Exhibit A in southeast Michigan’s epic regional dysfunction. Everyone knows the system has to be “rationalized” in the city’s municipal bankruptcy — not just leveraged as an asset, but changed to manage debt and long-term maintenance better. The solution that Detroit emergency manager Kevyn Orr favors is best for all players: an authority that would give the suburbs a say in the way the system is managed, and give the city much-needed cash for relinquishing its ownership.

Detroit’s fast track to private water risks high rates, bad service, experts say
Source: Brent Snavely, Detroit Free Press, April 6, 2014

Detroit risks higher water and sewer rates, poorer service and a mountain of administrative headaches if it insists on an aggressive timetable for choosing a private company to run the city’s sprawling system, experts told the Free Press. The city, as part of its plan to restructure $18 billion in debt and emerge from bankruptcy, asked private companies in March to provide initial proposals by this week and will ask some from the pool to submit binding bids by June….

Detroit seeking offers for private management of water and sewerage department
Source: Brent Snavely, Detroit Free Press, March 25, 2014

With negotiations with suburban counties deadlocked, the City of Detroit has issued a request for offers from private companies to operate and manage the Detroit Water and Sewerage Department. Detroit emergency manager Kevyn Orr, who is steering the city through the largest municipal bankruptcy in the nation’s history, said the city has a duty to its creditors to explore all options, especially since the city’s proposal for the creation of a regional authority with Oakland, Macomb and Wayne counties is stalled.

Detroit Water, Sewer Bonds Downgraded Deeper Into Junk
Source: Brian Chappatta and Chris Christoff, Bloomberg, March 25, 2014

Detroit’s water and sewer bonds were dropped five levels to CCC from BB- by Standard & Poor’s — its fifth-lowest grade — citing a possible default as the city goes through the largest U.S. municipal bankruptcy. … The city’s water system, which serves about 40 percent of Michigan’s population, accounts for $5.8 billion of Detroit’s debt. Orr has proposed leasing the system to a new regional public authority to help pay for services. Surrounding counties have so far balked. ….

Detroit Threatens to Cut Water Service to Delinquent Customers
Source: John Eligon, New York Times, March 25, 2014

…Although the department said its effort to collect on delinquencies was not related to Detroit’s bankruptcy, the water department has been an issue in the process. The city has been looking to shed some of its $18 billion debt by privatizing some of the system. Kevyn D. Orr, the city’s emergency manager, has proposed folding Detroit’s water department into a regional authority that would handle water service for Wayne County, which includes Detroit, and the wealthier suburban counties of Oakland and Macomb. Those counties have been resistant to the idea in part because of the fear that they will be caught up in Detroit’s delinquencies. Bill Nowling, a spokesman for Mr. Orr, said the water department’s efforts to collect back payments did not affect the city’s push for a regional authority. The authority would give the counties more control in recovering unpaid bills, Mr. Nowling wrote in an email. Besides the effort to create a regional authority, Mr. Orr has also been looking into selling the water department or having an outside company manage it. The city put out a request last Friday seeking bids to buy or manage the department, and Mr. Nowling wrote that interest was strong. …

Detroit Seeks Proposals to Privatize Its Water System
Source: Matthew Dolan, Wall Street Journal, March 25, 2014

This bankrupt city is seeking proposals from private companies to run and potentially buy its regional water and sewer system as talks to lease it to the city’s suburbs have stalled. The move to at least partially privatize one of the nation’s largest water systems comes as the city considers unloading assets to finalize its debt-cutting plan, which is expected to be voted on by creditors this spring. …. Privatizing water and sewer service in southeast Michigan could provide a test case for advocates who argue the private sector would bring greater efficiency and needed improvement to aging systems nationally. Opponents of such privatization efforts fear rate increases and question turning a public entity into a profit-making enterprise….

Detroit water deal not close, Oakland County says
Source: Lauren Abdel-Razzaq, Detroit News, February 11, 2014

Suburban leaders say they’re far from agreeing on joining a regional authority that would run Detroit’s Water and Sewerage Department, despite pressure to reach a deal to facilitate the city’s bankruptcy restructuring. Top aides to Oakland County Executive L. Brooks Patterson made their position clear during a meeting Tuesday night with officials from Macomb and Wayne counties to discuss the proposed authority. Their concerns include forcing suburban customers to bear the brunt of future costs associated with the water and sewer system. Oakland County doesn’t feel it has to make a quick deal with Detroit, deputy executive Gerald Poisson said….

Detroit Suburbs Balk at Spinning Off Water Works to Help City
Source: Chris Christoff and Brian Chappatta, Bloomberg, January 28, 2014

Time is running out for Detroit Emergency Manager Kevyn Orr to persuade suburban leaders and bondholders to help the city wring cash from its water-and-sewer system, a key to resolving its bankruptcy. The Detroit-owned utility serves 127 area communities that now pay for its services. Talks to lease the system to a new regional authority that would generate revenue for municipal services are bedeviled by mistrust and the cost of upgrading a network that serves 40 percent of Michigan’s population across 1,079 square miles (2,795 square kilometers). …

Regional water deal elusive for Detroit emergency manager
Source: Nick Carey, Reuters, December 16, 2013

In bankruptcy and looking for cash, Detroit would like to lease its water utility to raise as much as $9 billion to fund basic services long term, but talks with neighboring suburban counties are stalled. County officials say they are stuck over the price tag and estimates of repair costs, likely delaying plans by Detroit’s emergency manager to deliver a financial restructuring plan early next month. … A key sticking point is the estimate of what it would cost to repair or replace underground pipes and other Detroit Water and Sewerage Department infrastructure. Gerald Poisson, deputy executive for Oakland County – home to 1.2 million DWSD customers – said preliminary financials he had seen estimated it would cost $20 billion to upgrade the system over two decades. Rates would have to quadruple to fund repairs, he said. …

FM Pulse and Salary Survey

Source: Facilities Management, September 2014

… Part 2: In-house Or Outsource? Facility Departments Evaluate Staffing Balance

…At Western Michigan, tough economic times led to fresh thinking that included staffing modifications. “Some levels of outsourcing were implemented. Lower skilled jobs that had higher wages or specialty and expensive equipment tasks — such as snow plowing — were typical in-house job functions that were reviewed,” says Strazdas. “In a collective bargaining environment, both sides of the table came closer to find solutions to lower costs and improve service.”…

….Today, if an IFC [International Finance Corporation] employee leaves, and the outsourced management team can do those duties just as effectively, then the company doesn’t replace that person; instead, it adds those responsibilities to the outsourcing assignment. ….

… Part 6: Survey: Facility Management Outsourcing, Retirement, Satisfaction Results

This year, your company’s use of outsourcing: %
Decreased ————————————- 8
Increased ———————————— 19
Stayed about the same ———————— 73

Next year, your company’s use of outsourcing will probably: %
Decrease —————————————————- 9
Increase —————————————————- 16
Stay about the same —————————————— 75

How will charter schools deal with their corruption scandals?

Source: Mark Palko, Washington Post, Monkey Cage blog, August 8, 2014

Charter schools were originally conceived as centers of experimentation and innovation where educators could try new approaches quickly on a small scale with a minimum of paperwork. Many charters have lived up to that promise, but that same openness that allows new ideas to flourish may also have left the sector vulnerable to a dangerous level of corruption. For decades, Michigan and Florida have been on the cutting edge of shifting public education into the private sector. These policies were based on a deeply held and often explicitly stated belief that choice and market forces could net only solve education’s problems but could also alleviate much of the need for regulation. Now recent investigations from the Detroit Free Press, South Florida’s Sun-Sentinel, and the Florida League of Women Voters have painted a troubling picture of two out-of-control charter school systems….
Michigan spends $1B on charter schools but fails to hold them accountable
Source: Jennifer Dixon, Detroit Free Press, June 22, 2014

Weak Michigan charter school laws enable scams, insider dealing
Source: Jennifer Dixon, Detroit Free Press, June 23, 2014

Florida’s Charter Schools – Unsupervised: Taxpayers, students lose when school operators exploit weak laws

Source: Karen Yi and Amy Shipley, Sun-Sentinel, June 18, 2014

Statewide Study On School Choice And Consensus Report On Charter Schools
Source: League Of Women Voters Of Florida, Education Team, Final Report, April 20, 2014

Editorial: Reconsider plan to privatize parking /City Council should approve Orr’s request to collect bids for Detroit’s broken, expensive parking system

Source: Detroit News, August 10, 2014

City Council voted like old Detroit last week when it denied Emergency Manager Kevyn Orr’s request to collect proposals for bids on the city’s parking system. The move bows to unions and impedes progress as Detroit tries to emerge from bankruptcy. A “yes” vote would have allowed the city to issue requests for proposals to gauge the value of Detroit’s parking system, which includes seven parking garages, more than 3,000 metered spaces — officials have said about half don’t work — and a towing service. Privatizing the parking department would provide money to fix it immediately, provide Detroit with a more modern and accessible parking system, and potentially increase parking revenues for the city in the long haul. Orr’s restructuring plan invests more than $1 billion in city services over the coming years, and selling some of the parking system would provide resources to help offset the expenses….
Detroit To Privatize Parking System
Source: Caitlin Devitt, Bond Buyer, August 5, 2014
(subscription required)

Detroit emergency manager Kevyn Orr plans to issue a request for proposals for private firms interested in taking over the city’s parking system, where nearly half the meters are reportedly broken. City Council last week rejected the privatization plan by a vote of 6-2. Orr is moving ahead, using power granted under the state’s emergency management plan. Mayor Mike Duggan is reportedly in favor. The city will take bids from firms interested in buying the entire system, a piece of it, or managing it. A representative for Orr told the council that the deal could mean a cash payment that would lower the amount of money the city would need for exit financing as it emerges from bankruptcy.
The system includes seven parking garages and 3,200 spaces. Nearly half of the parking meters don’t work, and Detroit would need to spend $40 million over the next 40 years to repair the system, according to a consultant’s report….

Orr seeks bids to privatize parking department despite council’s objection
Source: Joe Guillen, Detroit Free Press, August 5, 2014

Detroit emergency manager Kevyn Orr is proceeding with plans to seek bids to privatize the city’s valuable parking department even though the City Council last week rejected the move. Orr sent a letter on Monday to union officials whose members work in the parking department informing them he would be issuing a request for proposals to gauge the interest of potential bidders to buy or manage the department, which includes parking meters, several parking garages and a towing operation for abandoned vehicles. The council voted, 6-2, last week to reject Orr’s request. ….. Under the state’s emergency manager law, Orr is not required to seek the council’s approval to issue a request for proposals such as the one he wanted to put out for the parking system. However, Orr and AFSCME Council 25 President Al Garrett have an agreement in place that says Orr must get the council’s permission to privatize the parking department….

Orr seeks proposals to privatize Detroit parking system
Source: Metro Times, July 29, 2014

If Detroit Emergency Manager Kevyn Orr’s decision to raise parking violation fines had you reeling in pain, News Hits has some potentially unfortunate developments to report. Orr, who’s planning to leave town in the coming months, has decided to move ahead with what’s a surprise to no one: a solicitation for proposals to either run Detroit’s entire municipal parking department, or buy the system outright. By the time you read this, City Council may have already signed off on Orr’s request to allow him to issue a request for proposals.

Source: >Joe Guillen, Detroit Free Press, July 22, 2014

Detroit emergency manager Kevyn Orr is moving forward with plans to privatize the city’s valuable parking system, but whether the system would be sold off completely has not been determined. Orr’s office today asked the City Council’s permission to seek bids to privatize the parking system. The council could vote on the request next Tuesday. The city wants to give private companies flexibility in bidding on the parking system, which includes seven parking garages, nearly 3,200 metered spaces and a towing operation for abandoned vehicles. A bidder could offer to buy the entire system, for example, it could offer to manage the system, or it could even offer to manage a portion of it, such as meter enforcement….

A year later, what cities can learn from Detroit’s bankruptcy

Source: Bruce Katz, Jennifer Bradley, Fortune, July 22, 2014

Detroit’s recovery shows that cities are networks, not just governments….The city government, for example, gave up control of the neglected (but promising) urban park, Belle Isle, turning it over to state management under a 30-year lease. Through a $185 million bond package, the Detroit Public Lighting Authority is tackling one of the most iconic symbols of the city’s troubles, replacing 55,000 broken streetlights with state-of-the-art LED bulbs. … As Detroit’s government was struggling with fiscal challenges (and the struggles started long before the bankruptcy filing), civic, business and philanthropic actors were committing billions of dollars into downtown and midtown and supporting a smart plan for the city’s physical and economic future. The M1 rail line, which is expected to begin construction later this month, is emblematic of Detroit’s physical and economic transformation. The bulk of the funding is coming not from the federal, state or local governments, but rather a consortium of companies, philanthropies and other anchor institutions. … When it looked like the DIA’s collection would be dismantled to pay the city’s bills, the DIA itself, philanthropies, businesses, and the state of Michigan created what’s termed the “grand bargain” to shore up the city’s pension fund and thereby save the art. …

State of charter schools: How Michigan spends $1 billion but fails to hold schools accountable

Source: Detroit Free Press, July 16, 2014

A yearlong Free Press investigation of Michigan’s charter schools found wasteful spending, conflicts of interest, poor performing schools and a failure to close the worst of the worst. Among the findings:

Charter schools spend $1billion per year in state taxpayer money, often with little transparency.

Some charter schools are innovative and have excellent academic outcomes — but those that don’t are allowed to stay open year after year.
• A majority of the worst-ranked charter schools in Michigan have been open 10 years or more.
• Charter schools as a whole fare no better than traditional schools in educating students in poverty.
• Michigan has substantially more for-profit companies running schools than any other state.
• Some charter school board members were forced out after demanding financial details from management companies.
• State law does not prevent insider dealing and self-enrichment by those who operate schools.

Pay frozen for full-time faculty, adjunct faculty positions privatized in new Jackson College contract

Source: Leanne Smith, mlive.com, July 14, 2014

Salaries will be frozen through 2016 under a faculty contract approved by the Jackson College Board of Trustees on Monday, July 14. Adjunct faculty members, whose jobs now will be privatized through EDUStaff of Grand Rapids, also are excluded from the deal, which is retroactive to Sept. 1, 2013….

Stalking Horse: Detroit Water Crisis as Possible Precursor of Privatization

Source: Rick Cohen, Nonprofit Quarterly, July 15, 2014

…As others have observed, the suddenly vigorous efforts of Detroit Water and Sewerage to clear up delinquencies through an aggressive regime of shutoffs may be a prelude to an effort to sell a very valuable asset and infuse billions into Detroit’s fiscal picture. The battle over potential privatization of public water services is a core element of water controversies…. Perhaps, however, there is a perverse madness and genius in Detroit Water’s strategy to turn off the taps on over 100,000 residential customers. “Report after report has shown privatized services to be more expensive and inefficient than their publicly owned counterparts,” Milne writes. “It’s scarcely surprising that a large majority of the public, who have never supported a single privatization, neither trust the privateers nor want them running their services.” There’s the clue to Detroit’s strategy: make the public sector water system even more detestable than the potential corporate alternatives, so that the citizens of this distressed city would want to see something other that Detroit Water and Sewerage running the show….

Detroit urges national effort to defeat banks, privatization
Source: Abayomi Azikiwe, Press TV, July 8, 2014
Massive water shut-offs have drawn attention to the humanitarian crisis in the city of Detroit. Even though the United Nations commission dealing with water resources and access to potable water has condemned the conditions prevailing in the African-American- majority municipality, the only response to the documentation of gross human rights violations has been a public relations campaign to distribute bottled water. …. Nestles Waters of North America is noted as the largest bottled water corporation in the United States. The parent company is a worldwide operation and has been cited as a major proponent of the privatization of waterways and services. A major challenge to Nestles in Michigan revolved around their efforts to retrieve and bottle water for profit, a process that causes environmental damage. The involvement of such a firm in the current crisis in Detroit should be assessed from the standpoint of the actual history of the company as well as the role of AmeriCares.  …. Activists in Detroit have not been idle in confronting the bank-imposed austerity plaguing the city. Every week there are Freedom Friday demonstrations beginning at the DWSD and spreading out through downtown in order to confront and expose the real criminals behind the crisis….

Detroit’s Water War: a tap shut-off that could impact 300,000 people
Source: Martin Lukacs, Guardian, June 25, 2014

A right-wing state and corporate push to cut off water is economic shock therapy at its most ruthless and racist, but resistance is growing. … It was six in the morning when city contractors showed up unannounced at Charity Hicks’ house. Since spring, up to 3000 Detroit households per week have been getting their water shut-off – for owing as little as $150 or two months in bills. Now it was the turn of Charity’s block – and the contractor wouldn’t stand to wait an hour for her pregnant neighbour to fill up some jugs. … The official rationale for the water shut-downs – the Detroit Water Department’s need to recoup millions – collapses on inspection. Detroit’s high-end golf club, the Red Wing’s hockey arena, the Ford football stadium, and more than half of the city’s commercial and industrial users are also owing – a sum totalling $30 million. But no contractors have showed up on their doorstep…. The public water system, a prized resource worth billions and sitting on the Great Lakes, is now the latest target – and the water shut-offs are a way to make the balance-sheet more attractive in the lead up to its privatization. …

Detroit plans mass water shutoffs over $260M in delinquent bills
Source: Steve Pardo, Detroit News, March 21, 2014

….The department halts cutoffs through the winter because of complications associated with freezing temperatures, such as damaged pipes. But this spring, a new contractor has been hired to target those who are more than two months behind or who owe more than $150 — twice the average monthly bill of $75…. People pay up more when they see the department out cutting off water to neighbors, and the statistics bear that out, officials said. In July, for example, before contractors started on the shutoffs, the department cut off 1,566 customers. That month, it collected $149,000 in water bills. Extra contractors started working on cutoffs last summer. At their peak in October — before cold weather caused a halt to the disconnects — 3,700 cutoffs occurred. The department collected more than $350,000 in overdue bills that month. That number of cutoffs translated to more than double for warm weather months compared to last year….Up to 20 additional contractor crews are expected to be employed working on the cutoffs, DWSD officials said….

….The department is also owed more $670,000 from companies in Redford, Dearborn and Macomb Township for pollutant surcharges related to food and other processing disposals. Detroit-based Uncle Ray’s Snacks owes more than $676,000 in pollutant surcharges…..

Detroit Art Valued at Up to $4.6 Billion / New Value Is Sharp Increase Over Previous Estimate and Could Cause Problems for City in Bankruptcy Court

Source: Matthew Dolan, Wall Street Journal, July 9, 2014

A new report on Detroit’s fine-art collection has pegged its entire value at $2.8 billion to $4.6 billion, a sharp increase over a previous partial estimate that could create a headache for the city in bankruptcy court. Some creditors are pushing Detroit to sell or lease select works from the 66,000-piece, world-class art collection at the Detroit Institute of Arts as part of the settlement of nation’s largest-ever municipal bankruptcy. The new, all-inclusive valuation released Wednesday by New York-based Artvest Partners could add fuel to their arguments ahead of the bankruptcy trial set to begin next month.
DIA seeks to block removal of artworks for valuation in bankruptcy fight
Source: Nathan Bomey, Detroit Free Press, May 13, 2014

The Detroit Institute of Arts late tonight asked a judge to block creditors from physically removing thousands of works from the museum’s walls to determine their value in the city’s Chapter 9 bankruptcy. DIA attorneys filed an official objection to the proposal by Financial Guaranty Insurance Co. (FGIC) and Syncora. The major bond insurers — which could collectively lose more than $1 billion on Detroit’s bankruptcy — are leading a push to force the city to cooperate with four prospective outside bidders for the entire museum or portions of its collection. The insurers have asked Judge Steven Rhodes to approve their motion allowing their representatives to physically remove as many as 12,000 works from the walls and archives, snapping digital pictures of the front and back of each piece….

GM, Ford, Chrysler may give millions to DIA in Detroit bankruptcy deal
Source: Nathan Bomey, Alisa Priddle, Brent Snavely and Tom Walsh, Detroit Free Press, May 13, 2014

The Detroit Three automakers are considering giving tens of millions of dollars to the Detroit Institute of Arts toward its $100-million obligation to help reduce pension cuts and protect art from being sold in the city’s bankruptcy, the Free Press has learned. The DIA approached the auto companies about six weeks ago to ask them to contribute more than $50 million as a group, one person familiar with the talks said. The total donation for the three may end up closer to half that amount, said the source. But once the automakers are on board, the museum might make similar requests to automotive suppliers. The DIA also asked for help from several non-auto foundations, including the Los Angeles-based Getty Foundation. Today it said it is mulling the request….

Detroit creditor Syncora gains access to DIA documents
Source: Matt Helms, Detroit Free Press, April 29, 2014

A Detroit creditor that’s been pushing for a sale of Detroit Institute of Arts assets to settle the city’s debts won access Monday to documents shared between the museum and Michigan’s attorney general last summer. …. The reason for Syncora’s insistence on a strategy of forcing Detroit to consider selling art is clear. The Bermuda-based holding company is on the hook for nearly a quarter-billion dollars in Detroit’s bankruptcy, in no small part because it underwrote a $1.4-billion debt deal to shore up underfunded pensions. The city is now seeking to wipe out that deal engineered in 2005 by Mayor Kwame Kilpatrick.

Foundations commit more than $330M to save Detroit art
Source: Reuters, January 13, 2014

Financial pledge also aims to fund at-risk retiree pensions. …The mediators, headed by federal judge Gerald Rosen, said the philanthropic effort for the DIA was being funneled through a leadership committee consisting of the heads of the Ford Foundation, the Kresge Foundation, the John S. And James L. Knight Foundation and the Community Foundation for Southeast Michigan….

Deal reached to fund Detroit pensions, preserve art
Source: Ned Resnikoff, MSNBC, January 14, 2014

A coalition of local and national foundations have reached a deal intended to save Detroit’s largest art collection and limit cuts to the retirement benefits of public workers. On Monday, U.S. Chief District Judge Gerald Rosen announced that he had finished mediating a deal under which the nine organizations involved in negotiations would pay $330 million into public pensions and turn the publicly-owned Detroit Institute of Arts (DIA) collection over to the private nonprofit which currently runs the museum. The plan effectively eliminates the risk that Emergency Manager Kevyn Orr would pressure the DIA into selling off some of its art as part of his plan to steer Detroit through the largest municipal bankruptcy in American history. Orr has estimated that the city faces an $18 billion long-term debt burden, including a $3.5 billion pension liability. …

$330 million pledged to save pensions, DIA artwork from Detroit bankruptcy
Source: John Gallagher and Mark Stryker, Gannett Michigan, January 13, 2014

…Rosen announced nine foundations pledged $330 million to the cause, a critical step toward solving the contentious issues surrounding pensions and paintings. The money, which represents an unprecedented coalition of foundation support for a troubled American city and a bold stroke of out-of-the-box creativity, is also a potential game changer in Detroit’s struggle to restructure $18 million in municipal debt in bankruptcy court. Despite the immediate acclaim that greeted the pledge, a myriad of challenges remain that could scuttle a deal. Leaders of the pension funds representing city workers and police and fire personnel would have to accept the terms. The $330 million, which still remains shy of Rosen’s original goal of $500 million, is unlikely to satisfy the unions. …Some creditors believe city-owned DIA artwork is worth “billions of dollars” and that a recent appraisal from Christie’s auction house that was commissioned by the city vastly under-valued the city-owned collection. Creditors have accused Christie’s of offering a low-ball figure to give political cover for mediator Rosen to propose transferring the DIA to an independent organization….

A Bruegel, a Rembrandt, a van Gogh: Appraisal Puts Prices on the Priceless in Detroit
Source: Randy Kennedy, New York Times, December 19, 2013

… Detroit’s emergency manager on Thursday released Christie’s long-awaited market appraisals for some of the greatest masterpieces in the collection of the Detroit Institute of Arts, which has become a political football in the city’s efforts to repay billions to creditors as part of a federal bankruptcy case. Pieter Bruegel the Elder’s “The Wedding Dance,” one of the institute’s calling cards and one of only five Bruegels in American museum collections, would bring $100 million to $200 million if sold, the auction house estimated. An 1887 van Gogh self-portrait — one in which he is wearing his familiar yellow straw hat and tortured mien — was valued at $80 million to $150 million. Rembrandt’s “The Visitation” would bring $50 million to $90 million. And Matisse’s “The Window,” the first painting by the artist to enter an American museum collection, would fetch $40 million to $80 million. A drawing by Michelangelo of a design for the Sistine Chapel ceiling brought the only sizable estimate for a work that was not a painting: $12 million to $20 million. While museums often have their collections valued in a blanket manner for insurance purposes, the public revelation of what its prized paintings and sculpture would bring on the market is a painful turn of events for the institute, which is facing a threat to its existence of a kind never confronted by another American museum of its size. …

Christie’s Appraises Detroit Institute Artworks
Source: New York Times, December 19, 2013

Experts at Christie’s set values on some key artworks in the collection of the Detroit Institute of Arts on Thursday. The auction house appraised about 2,800 works — less than 5 percent of the institute’s entire collection — arriving at a total valuation of between $454 million and $867 million. Below, some of the most important pieces.

‘Detroit Art City’: The story of a town on the verge of losing more than just its van Gogh
Source: PBS Newshour, Art Beat blog, December 11, 2013

“Detroit Art City: The Detroit Institute of Arts Story,” a documentary by Detroit Public Television, tells of the story of the one of America’s most significant art collections and how it’s fate came to rest in a legal battle over the Motor City’s future.

…So the museum is fighting back. The Detroit Free Press reported last week that the DIA is working to broker a deal where it would raise $500 million from nonprofit foundations in order to become a nonprofit itself. The arrangement would separate the museum from the city and generate money to assist in the bankruptcy. If the deal passes, the museum would ensure the safety of its collection from creditors. …

How NOT to sell Detroit’s Art
Source: Philip Kennicott, Washington Post, December 4, 2013

The grim and venal push to put a pricetag on the art in the Detroit Institute of Arts continues with news Tuesday that an analysis of the collection’s value — important to creditors if they can force its sale as part of the larger Detroit bankruptcy crisis—has come in lower than expected.

Orr: Combined value of DIA’s most valuable art less than $2B, can’t fix shortfalls
Source: Robert Snell, Detroit News, December 3, 2013

The combined value of the city’s most valuable art is less than $2 billion and cannot solve the city’s pension problems, Emergency Manager Kevyn Orr told The Detroit News. Hours after Detroit was ruled eligible for Chapter 9 bankruptcy relief, Orr lifted a veil of secrecy covering an ongoing valuation of parts of the collection housed at the Detroit Institute of Arts by New York-based auction house Christie’s Appraisals. The first phase, which involves valuing 496 pieces, shows the art is worth less than $2 billion, Orr said. …

Pension official: Idea of foundation funds ‘very encouraging’ in Detroit bankruptcy
Source: Robert Snell, Detroit News, November 14, 2013

Pension officials fighting attempts to cut retiree benefits were encouraged to learn Thursday that a federal mediator is investigating whether several foundations are willing to pool money that would safeguard the Detroit Institute of Arts’ city-owned collection and help bankroll retiree pensions.

A mix of reactions emerged hours after The News revealed a behind-the-scenes proposal that could play a major role in the city’s restructuring and successful emergence from Chapter 9 bankruptcy.

Orr: State aid was never on the table to forestall Detroit bankruptcy
Source: Brent Snavely, Alisa Priddle and Tresa Baldas, Detroit Free Press, October 29, 2013

The City of Detroit’s artwork — potentially worth billions — is still in play. … Orr’s testimony drove home what has been crystal clear in Detroit’s bankruptcy case: There will be no direct funding from either the state or federal level to help Detroit restructure its debt and the Detroit Institute of the Arts collection remains on the table as an asset the city could leverage to help restructure its debts. “It is valuable; I do not know if it is a potential source of cash for the city,” Orr said. … Anthony Ullman, an attorney for the Retiree Committee, asked Orr whether the city could get billions in return for the art, would that help the city restructure its debt. “Yes, I think it would,” Orr said, but he dodged questions about whether he would use it to tackle debt. In recent weeks, the discussion surrounding the DIA art has shifted from outright sales to leveraging the value of the masterpieces without relinquishing ownership. Detroit has hired Christie’s auction house to assess the value of the art and is expecting a report within the next few weeks. Michigan Attorney General Bill Schuette has issued a formal opinion stating that a forced sale of art would be illegal because the work is held in the public trust. The DIA, too, has vowed to fight any sale or any plan that puts the collection at risk. …

DIA comments at bankruptcy trial: What did they signal?
Source: Mark Stryker, Detroit Free Press, October 23, 2013

The City of Detroit’s opening statement in the bankruptcy eligibility trial that got under way this morning offered a brief and enigmatic reference to the possible sale of city-owned art housed at the Detroit Institute of Arts. …

The Agony of Suspense in Detroit / Detroit Institute of Arts Copes With Threat of Art Selloff

Source: Randy Kennedy, New York Times, October 2, 2013

It would have been hard to think of a better metaphor: A fire-breathing dragon was bearing down on the Detroit Institute of Arts. … But these days, the sense of peril surrounding this 128-year-old museum is real and unrelenting. Only a day before the protest, the institute had to close unexpectedly because of a power loss in the area caused partly by city equipment failures. Its registrars and art handlers are hauling hundreds of artworks out of storage in preparation for an appraisal now under way by Christie’s auction house, which was hired by Detroit’s emergency manager to determine how much the museum is worth as a city asset. Board members worry about a prolonged hiatus in gifts of art and money as donors wait out the bankruptcy case.

Michigan awards $90M deal to builder of problem-plagued HealthCare.gov

Source: Paul Egan, Detroit Free Press, June 30, 2014

The State of Michigan has awarded computer contracts worth nearly $90 million to the Canadian firm that built the federal government’s Affordable Care Act website and took much of the blame for its disastrous launch. Officials in the administration of Gov. Rick Snyder chose CGI Technologies and Solutions, whose parent company is headquartered in Montreal, over three U.S.-based firms. CGI did not submit the lowest bid. Accenture, a management consulting and technology firm headquartered in New York, offered the lowest price by nearly $5 million, but “CGI provided best value,” Kurt Weiss, a spokesman for the Michigan Department of Technology, Management and Budget, said Friday…The State Administrative Board on Tuesday awarded CGI two contracts worth $89.5 million to build the state’s Enterprise Resource Planning (ERP) system. That’s the business management software and hardware that will replace Project MAIN (Michigan Administrative Information Network), launched in the mid-1990s at a cost of more than $120 million. The system is antiquated and not Web-based. The ERP system will cut checks to state vendors, manage grants and grant payments, keep track of employee hours and sick time, and aid in developing the state budget, among other functions. One contract is for more than $50 million over seven years. The other is for nearly $39 million over three years….