Tuesday, March 4, 2014

Detroit's Emergency Manager Expects DWSD Ratepayers to Double Down

Want to take a closer look at DWSD, water rates and the infrastructure dilemma?

It’s not as if we haven’t paid enough for water services to be in a position to meet infrastructure needs as they come along; it’s that what we paid was so recklessly squandered.  I guess Detroit’s Emergency Manager, Kevyn Orr, thinks the ratepayers should double down with DWSD on infrastructure investments and tack on a stipend for Detroit’s general fund to boot.

We may have to pay more, but I think it should be on our own account, not Detroit’s.

First, let’s consider some of the decisions, practices and omissions over the years that have cost us millions:

(1)  Years ago, DWSD’s director was a professional engineer, with the attendant standards of ethics.  Those standards were sacrificed when the city made the directorship a non-engineer, politically appointed position.

(2)  For 33 years, the wastewater system was under the control of an elderly jurist who was the dupe of some corrupt city politicians to whom the judge gave plenipotentiary powers. Mayors were empowered to disregard city council in matters concerning DWSD.  The judge tossed out the requirement of competitive bidding for water services contracts for the sake of “efficiency” under “emergency” conditions that went on for decades.  The foxes had the keys to the henhouse.

(3)  The same judge piled on layers of additional bureaucracy, none of which made a significant dent in the corruption and mismanagement at DWSD.

(4)  City government in Detroit was a byzantine maze.  Coordination was lacking (a) internally between DWSD offices and (b) externally with other city departments.

(5)  Preventive maintenance was talked about frequently but practiced very little, mainly because maintenance people were in emergency mode most of the time.

(6)  Reports bearing upon clean water standards filed with state and federal authorities contained contradictory statistics.  There is evidence that some discrepancies were intended to mislead. (Copies available on request.)

(7)  Sewage sludge disposal was an unrelenting problem.  Incinerators kept breaking down.  Landfill capacity was limited.  Sludge inventories backed up, often resulting in sludge being recycled, a costly diversion, or being dumped only partially treated into the Detroit River and on to Lake Erie. The Vista calamity came and went at the expense of ratepayers. Ditto Synagro.

(8)  It often took months to get DWSD requisitions for replacement parts to be approved by the city purchasing department.  In some cases, the delay in acquiring new parts was as long as a year or two.  Sometimes this would result in parts being cannibalized from other inoperative equipment awaiting repair.

(9)  Preferential hiring requirements, conflicting union contracts and oppressive work rules complicated personnel administration in particular and management in general.  Hiring took too long.  Preparing replacements for those scheduled to retire was too slow.  Training for state licenses necessary for advancement was untimely.  The quality of training programs was suspect.  Procedures for improvements were cumbersome. 

(10) A consulting firm estimated that DWSD was over-staffed by 80 percent.

(11) Accounting has been hit and miss.  Whole categories of accounts seem to have been unattended.  We know about a few.  For example, storm run-off fees for city businesses went unbilled in some instances for years.  Water bill delinquencies in the city have sky-rocketed.  Some reports have estimated delinquencies at 40 percent.  (Who do you suppose makes up these shortcomings in revenues when costs are tallied at the end of the fiscal year?  You guessed it -- the other ratepayers.)

(12) Auditing?  DWSD responded to my recent request for a copy of its 2013 audit report, due last fall, with the statement that the city had not yet “released” the report and suggested that I not expect the report anytime soon.

(13) Cronyism at DWSD, as in the City of Detroit generally, has been troublesome. Old pals often have the edge in the employment line.

(14) Last but certainly not least, there is the long list of crimes with which most of us are familiar:  fraud, extortion, bribery, bid rigging,  etc., etc. The cost of these is incalculable.

When I have time, I’ll work up a more complete list.

To sum it up, money for infrastructure upkeep was dissipated through mismanagement and corruption.  It wasn’t there when the need arose.  Upgrades had to be postponed year after year, decade after decade.  The water systems (fresh and waste), like the city at large, were crashing faster than city poobahs could borrow to catch up.

The truth is that DWSD is just too big, too far into disrepair, and its processes too outmoded and inefficient.

The solution is to gradually replace DWSD with smaller, more efficient facilities employing the latest technology in locations throughout the region.

Instead, the emergency manager expects ratepayers to start shelling out for it all over again AND to give a bonus of nearly $50 million per year to the city’s general fund on top of it all.


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