Thursday, June 11, 2015

Dissension over Detroit Water Deal

Concern about secrecy and the public’s right to know caused Macomb County, a principal participant, to balk at ongoing negotiations to create a regional water services authority in southeast Michigan.

A lease of Detroit’s water and sewage treatment facilities by the new Great Lakes Water Authority (GLWA) was envisioned by bankruptcy officials as a source of revenue necessary to restore Detroit to solvency.

Macomb’s chief executive, Mark Hackel, objects to a gag order imposed on the talks by a bankruptcy judge during Detroit's bankruptcy proceedings.  Court authority for the secret negotiations, administered by a federal district judge as mediator, is set to expire on Sunday, June 14.  

In an editorial in the Detroit News on June 4, Nolan Finley wrote (excerpts):

[The federal mediator] has maintained a gag order on negotiations to finalize the regional water authority agreement, even though a governing board was appointed to publicly conclude its formation after a memorandum of understanding was signed a year ago…

Hackel is dead right that once that public board was in place, the private backroom dealing should have stopped and the gag order lifted.

"It's not about creating an effective water system," [Hackel] says. "It's about how they force this issue through bankruptcy and get what they need for the city of Detroit…”

In a follow-up note published in the News on June 5, Finley added (excerpts):

Mark Hackel has been on a seven-day rampage since learning he wouldn’t be included in a private mediation session to firm up the regional water authority, which included his Oakland County counterpart, L. Brooks Patterson and Detroit Mayor Mike Duggan.

Detroit Federal District Judge Sean Cox [mediator] cut the Macomb county executive out of the meeting…

The mediation session may not have moved the parties closer to a deal. But it did accomplish one thing: It drove a wedge between Hackel and Patterson, who had been united in opposition to the water deal as currently proposed.

And perhaps that was the objective.

On June 8 in an opinion piece in the News on the same topic, former Detroit emergency manager Kevyn Orr said (excerpts):

The mediation process has given all the parties a seat at the table. [Emphasis added.] It provided a forum to air differences and consider counter proposals in an open [sic] and collegial environment without concern that a proposal would be taken out of context and blasted across tomorrow's headline. Those that participated in mediation have enhanced the process to the betterment of the the systems' customers. Those that have withdrawn from it have robbed their constituents of the ability to make any agreement that much better by the value of their participation.

To those not participating in the mediation process, it may seem shrouded in secrecy and unfairly hidden from public view. However, the confidentiality imposed on this process is both common and necessary for the parties to have full and frank discussions...

Some say that mediation is gagging the public discourse. But those who hold this position may be allowing themselves to be stuck in the process instead of being participants in a solution...

It seems obvious to me that “all the parties” are not at the table.  I’m referring to the 120 communities throughout the region that are compelled to rely on and pay for a water and sewage system in the alteration of which they have no voice and can’t even find out what’s being discussed.

UPDATE:  On June 9, 2015, the author wrote Detroit's major newspapers, in part, 

Kevyn Orr’s rationale for secrecy confuses apples with oranges.

The typical bankruptcy case in which secrecy is invoked involves the bankrupt and creditors, i.e. claimants in the case which are commonly savvy, well represented financial institutions, not the public (here in 120 small,unrepresented communities scattered throughout seven counties), which is entitled to transparency.

Furthermore, Mr. Orr’s comments reveal the type of false assumptions that are the undoing of most federal court gag orders.

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