Monday, March 25, 2013

10 Things Detroit's Emergency Manager Should Do

I would like to welcome Kevyn Orr to his new job as emergency financial manager for the City of Detroit. I'm not thrilled that the City of Detroit has an emergency financial manager. However, I believe in making the best of things. Therefore, I want to share with him, and everyone else, the following 10 suggestion as to what he should do over the next eighteen months that he will serve in this capacity.

#1. Don't Take It Personally.
You are going to be called a lot of names in the coming days by a lot of different people, Mr. Orr. Much of the name calling will come from people who have their own agenda to serve. Some of it will come from people who are mad about the condition of their hometown and need to vent. Others are frustrated at how little their elected representatives listen to them and fear that an emergency manager will listen even less. More still will come from people who are simply piling on.

No matter what you do in this position, Mr. Orr, please don't take any of it personally. Turning around one of the most troubled cities in the industrialized world is a big job with tremendous consequences. We don't have time for anyone to take these things personally.

#2. Bring Back Warren Evans
Former Chief Warren Evans
Crime is rampant in Detroit. It is quite literally destroying our city as residents, businesses, and visitors flee for their own safety.

When Warren Evans was chief of the Detroit Police Department, violent crime dropped dramatically and police response times improved by 29% in less than a year. Plus, he did it all while reducing the amount that DPD spends on overtime by almost $7 million. He was so much better than either of the police chiefs that Detroit has had since then that it's not even funny.

I don't think there is anyone else who is as prepared to hit the ground running as chief of police for Detroit.

Some critics will argue that Warren Evans was too much of a showboat to be in a high-ranking position. He did, after all, have a pilot for a reality television show. However, as far as I'm concerned, if he can effectively reduce crime and improve police response times then he can be on whatever television show he wants.

#3. Fire Ralph Godbee
Ralph Godee resigned as chief of the Detroit Police Department last year. However, according to a report from Fox 2 News, he is still on the payroll as a DPD employee. Neither Mayor Dave Bing, Mr. Godbee, nor anyone else have refuted their report nor offered any explanation as to why someone could still be an employee of the department long after resigning.

For all of these reasons, as well as the fact that he was flipping incompetent as a police chief, Ralph Godbee should be fired immediately. Whoever decided to keep him on the payroll long after he resigned should also be fired.

#4. Forget About Belle Isle - For Now
Belle Isle in the Fall - Photo by Frank Nemecek
Belle Isle is undeniably one of Detroit's great jewels and it has a lot of potential. However, if there's one thing that I have learned over the years it's that making changes to Belle Isle brings out the craziest of people from all ends of the spectrum - from those who will call those changes a sign of bigotry to those who call the current state of the park to be the result greed and corruption.

Belle Isle sucks all of the oxygen out of the room. It will invite even more protests, more lawsuits, and less cooperation.

Those things will slow down anything else that you will need to do. You only have eighteen months to right this ship, Mr. Orr. You don't have time to worry about Belle Isle just yet.

#5. Talk to Detroiters - And Listen to Them
There's an old adage in business that you need to take care of your customers or someone else will. The residents and business owners of Detroit are your customers, Mr. Orr. You may think you know what they want, but you need to talk with them and listen to them to know it for sure.

If you are going to be succeed, you need these people to stick around and pay their taxes. A rather sizable chunk of Detroit's populace is already engaging in an informal tax revolt; simply refusing to pay the taxes they owe the City of Detroit isn't providing the services that they want.

You need to change this dynamic, Mr. Orr. The only way that you can do this is to listen to Detroiters and appreciate the sacrifices that they have made to keep this city afloat for this long.

#6. Dig Into the Police Department's Budget.
Officer Walking a Beat - Photo by Frank Nemecek
As I have reported previously on this blog, the Detroit Police Department has one of the largest budgets of any local law enforcement agency in the nation on a per resident basis. In spite of that, its performance has - to put it mildly - left much to be desired.

There are millions of dollars wasted within the Detroit Police Department from what information is publicly available and even more than that hidden away in numbers that they public doesn't get to see.

Since DPD is the City of Detroit's largest expense, the wasted money here also represents the largest opportunity to turn things around; to shift resources away from assistants in some office and no-bid contracts to where they are needed in front-line operations.

#7. Start Collecting Fines - Just Like Other Cities
I have mentioned this on my blog, including in the video that embedded below from November of 2011, but the City of Detroit does a crappy job at enforcing the property maintenance code. This includes things like grass not being cut, bulk trash piled at the curb for weeks or months, and so on.

It would be great if someone could either figure out why the City sucks so bad at this and fix it or hand the job over to the neighborhood groups that are reporting all of this stuff without a response; empowering them to issue tickets on the City's behalf instead of just reporting it to city hall.

I wouldn't want to see the City get into truly nit-picky stuff (e.g., "a candy wrapper blew onto your lawn, Mr. Homeowner. Here's a $500 ticket."). Regardless, there are enough other things that the City is probably missing out in $500,000 - $1 million in gross revenue annually.

Plus, thanks to the mortgage crisis, the worst offenders are usually large banks that are very collectible.

#8. Convert DWSD into a Lump Sum of Cash
Stock Photo by Jakub Krechowicz
There is a proposal on the table for our suburban neighbors to pay $50 million a year for the water system. It's a good offer. However, I think a large upfront payment would be much better for the residents and businesses of Detroit.

The suburban communities are committing to pay $1.5 billion over the next 30 years right now (i.e., $50 million per year x 30 years = $1.5 billion). Those annual payments could be structured into a $1.1 - $1.2 billion payment upfront by them issuing a bond, selling the water system to a third party who would collect their annual payments, or any number of other methods.

The $1.1 - $1.2 billion lump sum payment, in turn, would wipe out the City of Detroit's current general fund budget deficit, which is reportedly just under $300 million. There would also be enough cash left over to:
  • Fix the EMS problems that have plagued Detroit for years;
  • Repair or replace all of our streetlights;
  • Get new patrol cars for police department;
  • Make upgrades and repairs at the fire department;
  • Perform the $65 million in upgrades to Belle Isle that are needed; and
  • Open the 51 parks that Mayor Dave Bing closed earlier this year.
Plus, after doing all of those things, the City of Detroit would still have a couple hundred million dollars to pay down and restructure its debts.

#9. Reuse Historic Fort Wayne
Historic Fort Wayne (6325 W. Jefferson Ave.) is an incredible asset that is fundamentally underutilized. The old officer's housing could be repaired, modernized, and sold for a profit to private homeowners who would love to live so close to the Detroit River. The World War II-era barracks at the fort need lots of work and wouldn't be as profitable. However, I believe they would still profitable as a loft conversion.

Between those two things, one could expect to realize close to $2 million in revenue that can be pumped into other renovations at Fort Wayne. Plus, with this done, the City of Detroit and Wayne County would now have a bunch of properties that go onto the tax rolls.

#10. Know When to Leave
Perhaps the most important thing for you to know, Mr. Orr, is to know when to say "good bye" and let the City of Detroit return to its elected leadership. You have 18 months in which to right this ship. However, if you reach the point where things are stabilized and on a path towards growth after a mere 17 months then handing control back early would do a lot to restore confidence in Lansing.

There is no way that all of Detroit's problems, or even the majority of them, can be solved with 18 months. The key, in my opinion, is to get them to the point where the elected leadership can solve the rest of these problems on their own and then letting them.

With all of these things said, Mr. Orr, I wish you the best of luck in your duties.


Mac said...

I'm in full agreement. The only modification that I would make is that the city is leaving much, much more cash on the table than just a million here or a million there. The tax apparatus for the city is in such disrepair that I think we're undercollecting taxes to the tune of an amount that would easily dwarf our structural budgets.

Frank Nemecek said...

Oh, it's not just that the tax apparatus is in disrepair. There is an informal tax boycott in progress.

A great many residents and businesses feel that the City of Detroit is failing to deliver services and failing at such an extreme degree that they are refusing to pay, even when they know that they are legally required to do so and have the funds available.

One of the things that I believe needs to happen is for the City to show residents that it can responsibly handle the funds that it currently receives and THEN beef up its collection efforts. Doing so before that, in my opinion, could serve only to formalize this tax protest.