Thursday, October 09, 2008

Detroit $100 Million Problem

The Detroit Free Press reported this morning that the City of Detroit is currently facing a budget deficit of at least $100 million and that it could be as high as $150 million. Reportedly, interim Mayor Ken Cockrel, Jr. is considering a plan to sell bonds and lay-off employees in order to close the gap. Quite frankly, I'm not thrilled with either of those options so I'm hear to add a few of my own suggestions.

Sell Detroit's Share of the Tunnel
Former Mayor Kwame M. Kilpatrick negotiated a deal whereby Detroit would sell its share of the Detroit-Windsor Tunnel to the City of Windsor for $65 million. The City of Detroit currently gets $700,000 in annual revenue from the tunnel so the sale essentially gives us 92 years worth of revenue all at once. Plus, our neighbors in Windsor actually like the idea because it guarantees them that there won't be any toll increases for the tunnel.

I believe it's an outrage that the tunnel hasn't already been sold.

Sell the Rackam Golf Course
The Rackam Golf Course is owned by the City of Detroit, but located in Huntington Woods. Our previous mayor tried selling the golf course once before. However, his efforts were stymied by the Michgian Court of Appeals, which ruled that because of deed restrictions, the golf course must always remain publicly owned. This means that we would have to sell it to the City of Huntington Woods or some other public entity.

It's a bit of a long shot, but with a few million dollars at stake, I think this is still an option worth exploring. We should make one more effort to sell the Rackam Golf Course or otherwise make money from it.

Review City Contracts
The folks at AFSCME have been telling anyone who would listen that the City of Detroit could save millions of dollars by reducing how much work is outsourced to contractors. Admittedly, AFSCME does have an inherit bias against any work being outsourced since it's their members who are affected by it.

However, and this is the important part, if someone says that they have a way to save millions of dollars then Mayor Cockrel and his staff out to sit down with them immediately. If AFSCME's claims stand up to scrutiny, we should move forward with them.

Every dollar that we can save from other means is one that we don't borrow in new debt that we can't afford anyway.
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