How Many Consultants Does it Take to Turn on a Street Light?

August 20, 2013, 3:37 PM by  Darrell Dawsey


Kevyn Orr's office waxes concerned in a Detroit Free Press piece that uses the recent hit-and-run death of two well-known Detroit Tigers boosters to underscore the dangers of the city's unlit streets:

Dark neighborhoods in the city are a “huge public safety issue,” and a plan for fixing the streetlights is expected within the next few weeks, said Bill Nowling, spokesman for emergency manager Kevyn Orr.

Nowling estimated about 38,000 to 40,000 of the city’s 88,000 streetlights aren’t working. He said the first priority when the lights go on will be safe routes to schools.

“Ideally we’d like to be hanging lights and repairing what needs to be repaired starting in September,” Nowling said.

While no one questions the dangers posed by unlit city streets, I'm having a little troubling making sense of the EM's response thus far to the challenge of getting the lights on in Detroit neighborhoods.

Sure, skipper Orr and his little buddy Gary Brown have seen fit to stir things up the in lighting department lately -- but what do Detroiters stand to gain, other than having to dole out still more money to still more overpriced consultants and questionable appointees?

Several days ago, Orr canned the director of the Detroit Public Lighting Department. In a heavy-handed flourish that increasingly seems to be part of Orr's management style, he had Richard Tenney unceremoniously marched out of his office by police. 

Days later, Orr spokesperson Bill Nowling announced that Tenney -- who was still eligible to go back to his old job -- would be replaced by Beau Taylor, a former executive assistant in the department. 

And even as all this deck-chair shuffling is going on, Gary Brown says he's about to start a search for yet more consultants, more six-figure suits who this time will, in Brown-speak, "come in and do an assessment of our assets and formulate a plan to transition to DTE as well as coordinate with the Public Lighting Authority."

All of this, meanwhile, comes after the city in June named a new executive director of the state-created Public Lighting Authority — an entity whose chief purpose, so far as I can tell, seems to be to hand over lucrative energy customers to DTE and suck down funds once earmarked for cops. 

Under the plan, DTE will get a huge windfall in the form of new customers like Wayne State University, the Detroit Public Schools and the DIA, but that's not the best part. 

The sweetest part of this deal (for DTE anyway) is that the Lighting Authority will buy power from DTE, too -- and it will, in turn, sell that power back to the City of Detroit. According to some estimates, this arrangement could cost the city nearly $500 million over the next 20 years. Is this a cheaper option? That remains to be seen, but even according to the legislature's own analysis, the law that created the Authority will raise 'revenues and expenditures by an unknown amount depending upon the operational decisions of the authority and the terms of any bonds and/or revenue pledges related to it."

In short, despite everyone's best hopes, there's no guarantee Detroit will enjoy long-term savings from this deal as there's no telling how much Detroit could wind up paying in costs. (The state, however, won't be affected at all.)

Meanwhile, the PLA, funded through utility taxes that used to be reserved solely for the police department, will use $12.5 million to begin fixing a city lighting system that, according to reports, ultimately would cost the city $140 million to $200 million to repair and update. Also, Kevyn Orr agreed earlier this year to provide $600,000 payments in May, June and August from the City to the Authority to begin fixing the streetlights. 

The PLA has the authority to issue as much as $160 million in bonds. So what happens if that user tax falls short? Who could have to cover those bonds then? Whose "full faith and credit" backs those debt obligations, including the interest rates that come with them? Why, the City of Detroit's. 

Consider this passage from Section 25 of Public Act 392, passed by the state Senate last year: 

An authority and the local government comprising the authority may enter into a contract providing for the construction, acquisition, improvement, enlargement, or extension of a lighting system, including the payment of engineering, legal, and financing expenses in connection with the lighting system, and after the establishment of the initial service rates and the execution of contracts for the provision of construction services, purchase of power, and other related activities within the corporate limits of the authority. Contracts shall provide for the rates and charges for the local government. The local government may pledge its full faith and credit for the payment of the obligation in the manner and times specified in the contract.

Misplaced Liability

It's beyond me why a broke city has to be anywhere in the vicinity of this debt, and why this authority can't be on the hook, fully and solely, for bonds it could issue.

As for the embattled police department, it's expected to fill the hole the PLA will blow into in its utility user tax proceeds by getting additional money from city income taxes. But that's not new money, just resources that will be shifted from elsewhere. And don't even think about what happens if Detroit should experience anything to impact the flow of those taxes -- such as a drop in population or an inability to fully collect or to receive state help with collections.

All this, and the authority is expected to eliminate some 42,000 lights from alleyways and streets. (And I'm willing to bet money that the rest of the dangerous darkness will be used as sort of urban development prod, used to chase off occupants otherwise too stubborn to vacate areas the city wants cleared out.)

And this still assumes that the  the PLA won't get laughed out of the bond market in the first place should Orr successfully peter roll current bondholders in bankruptcy court. 

And why all the new suits anyway? I get that Orr wants to show he's a change agent, but how much of the lighting woes were Tenney's fault as opposed to the inevitable result of a city that's too broke to fight off copper scrappers and do basic upkeep on services? And was he that bad at the job that Orr really had to call the cops on the man?

Do We Really Need . . .

Furthermore, if you're going to dump this one on Tenney, do we really need that many more vendors to replace him? 

Do we need this many high-priced executives and firms to throw the switch along Plymouth Road or Chandler Park Drive? 

And do we really need a PLA executive director who isn't even an engineer? 

In ballyhooing the Detroit-born Odis Jones, a former development director in Cincinnati who will earn $155,000 a year in his PLA post. PLA spokesman Bob Berg admitted that Jones is "not an engineer but he's hired them, and what you want in this job is someone with experience in administering substantial public entities."

No, actually, we want someone who knows something about getting the lights on quickly, efficiently and without adding to the city's debt load — and a touch of engineering expertise surely couldn't hurt.

I'm not saying Jones isn't that someone, but when the man's best trait is listed as "can conduct a job interview," pardon me for going light on the eagerness and confidence.

Fingers Sprained or Broken?

Hell, it's bad enough that we already have in Brown a Chief Compliance Officer of questionable qualification and whose very appointment stinks of a political payoff. Now, he's in charge of looking for someone to help him coordinate the coordinators?

Why can't PLD, Orr's office and this Authority figure out how to facilitate the transition with the personnel already on payroll? Why do we need Brown to go out and waste more money and time looking for still more vendors? What, as my mother would say, is wrong with their fingers?

Big talk about "turning on the lights" has become politically popular in Detroit (and for good reason given the consequences on the ground for those who have to live in poorly lit neighborhoods). And Orr has been welcomed by many precisely because of talk like this.

Detroiters have to hope that that big talk isn't what some of this thing looks like early on — a smoke screen for corporate giveaways and handouts to the Marty Kaans of this world.  

And right now, all this talk of recruiting yet more teams and firms and experts doesn't seem too encouraging to those hopes.

After all, how many bureaucrats does it take to screw taxpayers?

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