EM spends $5M on consultants

[cla1945]

I thought he was going to handle things, but from the sound of it, he's spending money the City doesn't have on consultants to help him make decisions. A bit redundant don't you think?

http://news.yahoo.com/detroit-em-spe...150900909.html

[TexasT]

I thought he was going to handle things, but from the sound of it, he's spending money the City doesn't have on consultants to help him make decisions. A bit redundant don't you think?

http://news.yahoo.com/detroit-em-spe...150900909.html

Did you expect him to single-handedly comb through all of Detroit's books by himself? $275,000 gets you a lot...but not that much!

[313WX]

What happened to all of the damn consultant contracts the city already agreed to?

[cla1945]

Did you expect him to single-handedly comb through all of Detroit's books by himself? $275,000 gets you a lot...but not that much!

Yes, I guess I did. Too much to expect of a man making $275,000.00? I guess so. So hit the city employees a little harder, take a little more from the citizens, and let the retirees have it. The old adage "you have to spend money to make money" holds true in this case.

[TexasT]

Yes, I guess I did. Too much to expect of a man making $275,000.00? I guess so. So hit the city employees a little harder, take a little more from the citizens, and let the retirees have it. The old adage "you have to spend money to make money" holds true in this case.

Wait, you really expected him to go through millions of sheets of paper and multiple authorities and organizations all by himself?

What happened to all of the damn consultant contracts the city already agreed to?

This $5M includes contracts that the City approved, right? They appear to match up...

[313WX]

Wait, you really expected him to go through millions of sheets of paper and multiple authorities and organizations all by himself?



That includes the Miller Canfield contract that the City approved.

Ok, so these aren't new contracts. These the ones that we're already passed by City Council for the Milestone Agreement back in December.

[michimoby]

Yes, I guess I did. Too much to expect of a man making $275,000.00? I guess so. So hit the city employees a little harder, take a little more from the citizens, and let the retirees have it. The old adage "you have to spend money to make money" holds true in this case.

Orr's job title is Emergency Manager, not Emergency Auditor or Analyst. The man is being tasked with overseeing the process of restructuring.

This is telling in many ways: basically, he's placing the trust of reviewing the books and developing a strategy in the hands of outside organizations...effectively stating that the current resources available at City Hall to do the work are not sufficient to get the job done. That's both a positive [[he's looking for the best people to get work done) and a negative [[there's a severe shortage of capable people here).

[TexasT]

Ok, so these aren't new contracts. These the ones that we're already passed by City Council for the Milestone Agreement back in December.

I can't tell from the language of the article, which is vague. The Crain's article it cites to says

"The following consultants have been hired to help Detroit Emergency Manager Kevyn Orr with Detroit's financial turnaround, Crain's research has found:

• Ernst & Young, Detroit, one year, $600,000

• Conway MacKenzie Inc., Birmingham, one year, $2.1 million

• Miller Buckfire and Co. LLC, New York City, one year, $900,000

• Plante & Moran PLLC, Southfield, two years, $1.1 million

• Miller Canfield Paddock and Stone PLC, Detroit, 18 months, $300,000"

Free Press said in January that City Council hired:

• $250,000 for Milliman of New Jersey to study cost-cutting in retiree health care and pensions.
• $1.8 million for Miller Buckfire of New York to assist the city in improving its investment banking.
• $4.2 million for Conway MacKenzie of Birmingham to provide operational restructuring services.
• $1.2 million for Ernst & Young of Detroit to provide financial restructuring services.

And the famous $300K Miller Canfield contract was one that City Council already hired...to me, it sounds like he is using the resources that City Council already contracted for. That's better than going and getting his own consultants, if so. If not, I don't really have a problem with him hiring experts to assist him...there's literally no way one person could do everything himself. And I don't believe he could have city employees do it for him.

[rb336]

I know Orr's salary is paid by the state, but what about the consultants and any staff he hires? I think that should be part of the state's burden as well

[Hypestyles]

how many auditors does it take to screw in a lightbulb? heh.

[Zug]

I know Orr's salary is paid by the state, but what about the consultants and any staff he hires? I think that should be part of the state's burden as well

It wouldn't surprise me if they view this as part of how he decides to spend the city's money. Spend 5 million in the hopes of saving hundreds of millions down the line.

I knew he wouldn't be able to do everything single-handed, but it does make me wonder how many of the ideas generated will truly be his...considering how many consultants he needs.

[Ray1936]

I know Orr's salary is paid by the state, but what about the consultants and any staff he hires? I think that should be part of the state's burden as well

Yeah, that was my thinking, but I'd be surprised if the state contributes much more than squat.

[Wesley Mouch]

I'd be disappointed if he didn't bring in hired guns to get things done. There's nothing to see here.

[Scottathew]

It makes sense to analyze, and you have to pay for it.

That being said, I expect him to start making some changes within a month or two.

He doesn't need to do it all now, but we have to start seeing change in the right direction.

[iheartthed]

This is pretty standard for a financial reorganization. $5M is nothing compared to what it's gonna cost should the city go into bankruptcy.

[douglasm]

I agree with most of the posters. Consultants are a fact of life. The little town I serve on city council for is spending about 30k on a consultant to revise our building codes and land use/development statues. We also have legal and engineering consultants. No one man has enough smarts to do it all [[regardless of the opinion most politicians have of themselves) and good advice can go a long way towards making a job like Mr. Ott's easier.

Just don't expect miracles overnight. It's going to take time to completely understand Detroit's mess, much less solve it.

[Cliffy]

This will be a jackpot for consultants. The city has accountants and lawyers on staff yet we need to hire from the outside and pay $200 an hour. It doesn't make fiscal sense. More government welfare to the private sector.

[Honky Tonk]

I think people have a very unrealistic concept of what's going on here, and what it's going to take. Detroit, and it's finances, are an unholy mess. Years of incompetence, corruption, and neglect, have left it that way. Orr is a specialized project manager. In order to achieve success, he's going to need tools. These "consultants" are his tools to accomplish this. He's going to need both financial and legal tools. If he's as good as his reputation, then he'll succeed. If he's all yack and no shack, he's going to leave a bigger hole in the deficit. Either way the City's on a disaster course with no brakes. I hope he succeeds.

[Cliffy]

I hope he succeeds too but we already had part one with Robert Bobb and his consultants.... They left a bigger deficit

[old guy]

Did you expect him to single-handedly comb through all of Detroit's books by himself? $275,000 gets you a lot...but not that much!

Is that his salary, or his budget?

[Richard]

This will be a jackpot for consultants. The city has accountants and lawyers on staff yet we need to hire from the outside and pay $200 an hour. It doesn't make fiscal sense. More government welfare to the private sector.

It took them at the very minimum of a year to find one case of fraud,there will be those who see this as the last few coming in to pick the bones of what is left before bankruptcy,so it may be wise to keep everything very public relations heavy.

Take the Freep building,temporary city hall .Mr Orr puts his desk there,you guys put your new mayor and city council there and everybody else picks up a application at the front desk.

I think the problem is if you do not bring in outside help that is not influenced by status qou then it is just going to be a continuation of a cluster muck and the ones that will be walking away smiling will be the consultants and of course the lawyers.

[Richard]

Is that his salary, or his budget?

His salary 275k paid for by the state,everything else is paid for by the city.

[chicagoforlife]

Detroit should just remove Dave Bing from the mayor's office, the guy is a failed businessman and knows nothing about running a city, it's pretty obvious.

[Wesley Mouch]

This will be a jackpot for consultants. The city has accountants and lawyers on staff yet we need to hire from the outside and pay $200 an hour. It doesn't make fiscal sense. More government welfare to the private sector.

The lawyers and accountants on staff are probably fine folks -- but they're not specialists.

Sometimes you need a swat team. Doesn't mean your beat cops are no good. Beside, those accountants and lawyers already have a daily workload -- or at least we can so hope.

[rex]

i thought he was the consultant