This is Exactly Why I Give Up on Michissip...I Mean Michigan

[corktownyuppie]

Oh my god he has a college degree and he deserves $275 hour but I have no clue what the hell he does but the democrats caused this mess and they hired coffee stirrers.

[[1) I don't think the democrats caused this mess.
[[2) The fact that you don't have a clue what the hell he does is not really relevant. Undoing 60 years of structural inefficiencies while also remaining within the boundaries of 60 years of legal inefficiencies is not a simple as putting a square peg in a square hole.

The idea you propose of a having financial analysts hired directly by the state is actually a good one. We would need to be willing to pay them compensation that is competitive with other offers, but it would simultaneously keep much needed talent in Michigan while also keeping the profit value/margin of the services within the state coffers.

And given the fact that we will be needing restructuring expertise for the foreseeable future all throughout Michigan, this is an idea that at least deserves discussion.

In other news, Wayne County just got moved to negative watch for their bond ratings. Last I heard, they were already rated at BB- with serious problems in pension funding.

The grand reckoning is here.

[michimoby]

The biggest scam out there is consultants and not only that, they are totally clueless and whenever a big decision is to be made, they revert back to whoever is managing them to make the decision. The state should hire financial analysts and use them for all these takeovers. It would save all of us money. Not these scammers from NYC who are billing the max every 2 weeks and nobody knows what the hell they are doing.

Pejorative attacks aside, I can rattle off at least two dozen companies that were able to save jobs, improve their investor perception, and effectively stay in business because of consulting firms.

Don't throw all the eggs out just because one is raw.

[Honky Tonk]

Actually, that's how consultants work. Every extra penny the City saves by scrutinizing costs is a penny that can go towards services.

And Unions too! You're talking about a City that invented waste. How many years has it been since there was ANY accountability for the way Detroit is being run? Money disapears our of cash drawers, useful books, office supplies, and furniture, are left to rot in abandoned buildings, crime kits and ammunition strewn about and neglected, half a million dollars worth of school books get ordered that never materialize, books get cooked for the Annual Reports, and of course, there's famous Detroit friends and family plans. Now you're telling me the City fathers have decided to straighten up and fly right, and "scrutinize every penny"? The only reason they're agonizing over this kid and his salalry is 1.) they are no longer part of the take, and 2.) they're concerned that they might be found out for their part in this mess.

[Locke09]

And Unions too! You're talking about a City that invented waste. How many years has it been since there was ANY accountability for the way Detroit is being run? Money disapears our of cash drawers, useful books, office supplies, and furniture, are left to rot in abandoned buildings, crime kits and ammunition strewn about and neglected, half a million dollars worth of school books get ordered that never materialize, books get cooked for the Annual Reports, and of course, there's famous Detroit friends and family plans. Now you're telling me the City fathers have decided to straighten up and fly right, and "scrutinize every penny"? The only reason they're agonizing over this kid and his salalry is 1.) they are no longer part of the take, and 2.) they're concerned that they might be found out for their part in this mess.

It is ludicrous to say Detroit "invented waste". Money disappears out of cash drawers the whole world over, that's why cash handling is usually kept to a minimum. School books and supplies have nothing to do with the City of Detroit. No credible person is claiming that anyone has "cooked" any books or Annual Reports, which get audited by independent outside auditors [[the same ones who audit the State's books). Anytime you decide to straighten up and fly right is a good time [[or should people who start out wrong just stay wrong?). As has been said again and again, it's not about the kid and his salary, which is probably right in line with his experience - it's about the exorbitant fee his firm is charging. Conway Mackenzie is not auditing anything to find out if anybody is on the take and plenty of people are agonizing over these fees, people who are in no position to be on the take or play a part in "this mess".

[Wesley Mouch]

It is ludicrous to say Detroit "invented waste". ...

I think it was just a turn of phrase -- not meant to suggest that waste doesn't occur elsewhere.

Detroit's waste may not have 'invented waste' -- and it be exceeded in waste by other cities. Sure. But one thing is true. Detroit no longer has the cash to afford waste. Money hides waste.

The attitude you express is harmful to Detroit. Detroit's waste needs to be minimized, not marginalized.

[Locke09]

I think it was just a turn of phrase -- not meant to suggest that waste doesn't occur elsewhere.

Detroit's waste may not have 'invented waste' -- and it be exceeded in waste by other cities. Sure. But one thing is true. Detroit no longer has the cash to afford waste. Money hides waste.

The attitude you express is harmful to Detroit. Detroit's waste needs to be minimized, not marginalized.

What exactly is my attitude - that people shouldn't exaggerate things about Detroit just to justify paying $275 per hour for a financial analyst with one year of experience? I am the one arguing against waste. That's why I said earlier, "Every penny saved is a penny that can go towards services."

I guess we all just have different ideas about which wasteful practices are truly harmful to Detroit. Since I have first-hand knowledge of what practices have harmed Detroit, I'm going to continue to trust my own judgement on that.

[mam2009]

Conway MacKenzie’s hourly rates range from $495 for the group’s senior managing director to $275 for Johnston, who started with the company in June as a senior associate, according to records.

Critics questioned the wisdom of spending $275 an hour for a 22-year-old.
“What experience would he have to base that hourly rate on?” said Michael Wells, Detroit Public Library retiree and former UAW Local 2200 president. “I hope these firms, that they don’t use this as an opportunity to enrich themselves. I don’t expect them to be altruistic, but I don’t expect them to pick on a carcass.”

But a spokesman for Emergency Manager Kevyn Orr’s office defended the spending, saying the hourly amounts were negotiated by the city as flat rates within job classifications to save money. And Conway MacKenzie has given the city a 25 percent discount off its bills, the spokesman, Bill Nowling, said.


From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2c58DMNBH

Its not just the unions who should be concerned. If Conway is billing the SENIOR associate rate for an employee who just got his bachelor's degree last year, it certainly is worth asking how senior of an associate could he possibly be. Is it possible Conway Mackenzie is billing for a higher paying job classification to maximize the amount of fees they charge? Its certainly possible that is how they offset the 25% "discount".

If the contract had been all the Mayor & City Council's idea I suspect many on this board would be wondering how the "Clowncil" could have been so incompetent as to let such wasteful spending happen and wondering whose hands were being greased. But since it was the state's idea...

[mwilbert]

But a spokesman for Emergency Manager Kevyn Orr’s office defended the spending, saying the hourly amounts were negotiated by the city as flat rates within job classifications to save money. And Conway MacKenzie has given the city a 25 percent discount off its bills, the spokesman, Bill Nowling, said.


From The Detroit News: http://www.detroitnews.com/article/2...#ixzz2c58DMNBH

Its not just the unions who should be concerned. If Conway is billing the SENIOR associate rate for an employee who just got his bachelor's degree last year, it certainly is worth asking how senior of an associate could he possibly be. Is it possible Conway Mackenzie is billing for a higher paying job classification to maximize the amount of fees they charge? Its certainly possible that is how they offset the 25% "discount".

In my view, this is the legitimate issue here. If they are billing for people who have been inappropriately classified, then Orr's office should insist that either the classifications or the people in them be changed. This is something that comes up all the time, and both parties should know how to deal with it.

[Novine]

Orr has zero incentive to hold anyone's feet to the fire when it comes to consulting costs. He's going to be gone in a year and he knows that a few million here or there means nothing in the context of the billions being discussed in bankruptcy.

[iheartthed]

Its not just the unions who should be concerned. If Conway is billing the SENIOR associate rate for an employee who just got his bachelor's degree last year, it certainly is worth asking how senior of an associate could he possibly be. Is it possible Conway Mackenzie is billing for a higher paying job classification to maximize the amount of fees they charge? Its certainly possible that is how they offset the 25% "discount".

Most [[if not all) firms bill the same rate for Associates and Sr Associates.

[Cliffy]

Orr has zero incentive to hold anyone's feet to the fire when it comes to consulting costs. He's going to be gone in a year and he knows that a few million here or there means nothing in the context of the billions being discussed in bankruptcy.

He is part of the game. $1000 hour. I'm starting to wonder if Detroit is really bankrupt with all these expensive thieves on the payroll.

[corktownyuppie]

He is part of the game. $1000 hour. I'm starting to wonder if Detroit is really bankrupt with all these expensive thieves on the payroll.

Ok then. How much should we pay in fees to eliminate all our debt and restructure our operations? $1,000? $100,000?

By the way, the pension trustees set aside $5,000,000 toward a fight against lost benefits. What is the maximum amount any of their attorneys should be paid? Does your logic apply to them too? If they can afford to pay $200 per hour for a recent college grad, then maybe the funds are more than solvent too and don't need city assistance?

[professorscott]

This whole thread is inane. We owe billions with a "b" more than we can ever hope to pay, and we are arguing over thousands paid to those trying to sort this out.

This is similar to a situation where a homeowner is a quarter million dollars in debt, and is arguing with his wife over buying the $2.50 napkins as opposed to the $1.99 napkins. Doesn't matter. Go ahead and splurge.

[Honky Tonk]

It is ludicrous to say Detroit "invented waste". Money disappears out of cash drawers the whole world over, that's why cash handling is usually kept to a minimum. School books and supplies have nothing to do with the City of Detroit. No credible person is claiming that anyone has "cooked" any books or Annual Reports, which get audited by independent outside auditors [[the same ones who audit the State's books). Anytime you decide to straighten up and fly right is a good time [[or should people who start out wrong just stay wrong?). As has been said again and again, it's not about the kid and his salary, which is probably right in line with his experience - it's about the exorbitant fee his firm is charging. Conway Mackenzie is not auditing anything to find out if anybody is on the take and plenty of people are agonizing over these fees, people who are in no position to be on the take or play a part in "this mess".

My term "invented waste" is figurative and not to be taken literally. Money might disapear out of cash drawers "all over the world", but Detroit's bumbling incompetence has made it "the biggest municipal bakruptcy" in history. It's funny to me, reading some of these posts, how the same people that sat silent for years while City officials pillaged, plundered, and led residents down the rosy path, losing billions of dollars and hundreds of thousands of residents, now scream bloody murder when a million is spent to even try to begin to assess what damage has been done.

[michimoby]

This whole thread is inane. We owe billions with a "b" more than we can ever hope to pay, and we are arguing over thousands paid to those trying to sort this out.

This is similar to a situation where a homeowner is a quarter million dollars in debt, and is arguing with his wife over buying the $2.50 napkins as opposed to the $1.99 napkins. Doesn't matter. Go ahead and splurge.

...or perhaps an EM owing a few thousand dollars on a forgotten tax lien?

[Locke09]

My term "invented waste" is figurative and not to be taken literally. Money might disapear out of cash drawers "all over the world", but Detroit's bumbling incompetence has made it "the biggest municipal bakruptcy" in history. It's funny to me, reading some of these posts, how the same people that sat silent for years while City officials pillaged, plundered, and led residents down the rosy path, losing billions of dollars and hundreds of thousands of residents, now scream bloody murder when a million is spent to even try to begin to assess what damage has been done.

You can't be talking about me. Check my posts on this forum. I complained about the Kilpatrick Administration. I complained about things that were not going well in the Bing Administration. I frequently mentioned waste and incompetence. I talked about contractors getting paid too much and not delivering quality service. When I was taking the position that Bing didn't know what he was doing, people made the same comments about people just disliking him because he was an outsider, a businessman, a finder of all things corrupt, etc. as they are making now.

I try to be consistent. I'm going to watch everybody who wields power in the city in which I was born and raised. I won't be swayed from doing so. It might not make a difference, but I won't be in that category of people who were silent co-conspirators.

People keep jumping from one savior to the next. The problem with it is that they are willing to place everything in that saviors hands and go to sleep hoping the savior will handle everything and they won't have to think about it or do any work or make any decisions themselves and when they wake up in the morning it will all be okay.

[corktownyuppie]

You can't be talking about me. Check my posts on this forum. I complained about the Kilpatrick Administration. I complained about things that were not going well in the Bing Administration. I frequently mentioned waste and incompetence. I talked about contractors getting paid too much and not delivering quality service. When I was taking the position that Bing didn't know what he was doing, people made the same comments about people just disliking him because he was an outsider, a businessman, a finder of all things corrupt, etc. as they are making now.

I try to be consistent. I'm going to watch everybody who wields power in the city in which I was born and raised. I won't be swayed from doing so. It might not make a difference, but I won't be in that category of people who were silent co-conspirators.

People keep jumping from one savior to the next. The problem with it is that they are willing to place everything in that saviors hands and go to sleep hoping the savior will handle everything and they won't have to think about it or do any work or make any decisions themselves and when they wake up in the morning it will all be okay.

Some of us may be jumping on saviors, but I'm not one of them. I jump on solutions and weigh them by whether or not those solutions are viable.

- Eliminating billions of dollars of debt
- Maximizing city service levels for the dollars spent
- Cutting through red tape by allowing a unilateral authority make decisions
- Redesigning the structure of city government so it is in line with its resources and its expectations.

That's not Jesus talk. That's problem/solution-talk. Now I've said before, and I still stand by this...I don't have all the solutions, and I'm not necessarily married to any specific ones, so I think vigorous debate is necessary. But that debate needs to be intelligent and centered around facts, analysis, comparisons, data.

Comparing one guy's billable wage against one bus driver's hourly wage doesn't tell us anything meaningful about the city problem.

I'm all for cutting waste, even in the EMs office. So let's demand accountability. But saying that "This kid makes too much money" isn't analysis on waste.

Or better yet...fine. Let's bill the kid at $75 per hour. But then senior management will say that they're normal billing rate isn't $275, it's $1200. So if you want to give the kid the paycut, then you're gonna have to give me the pay raise. And if you're ok with that because it saves money, then fine.

What is the prime mission of the city? Right now it's to provide services to its residents so that it can attract more residents. Is that consultant at $275 helping us do that? In my opinion, yes. Because we either couldn't or were unwilling to do it ourselves. Could we get it at lesser cost? Perhaps, but would the outcome be as favorable? I don't know.

But "boo-hoo, union employees make $20 per hour while he bills at $275 per hour" isn't analysis. That's just whining.

[Locke09]

Some of us may be jumping on saviors, but I'm not one of them. I jump on solutions and weigh them by whether or not those solutions are viable.

But that debate needs to be intelligent and centered around facts, analysis, comparisons, data.

Comparing one guy's billable wage against one bus driver's hourly wage doesn't tell us anything meaningful about the city problem.

I'm all for cutting waste, even in the EMs office. So let's demand accountability. But saying that "This kid makes too much money" isn't analysis on waste.

But "boo-hoo, union employees make $20 per hour while he bills at $275 per hour" isn't analysis. That's just whining.

Once again, you can't attribute any of those comments in your quotes to me. If you check what I have posted on this thread alone, I'm one of the few citing data and making analysis. I haven't said, "This kid makes too much money." I have said that the billing rate is out of line with industry averages, even in the highest paid region in this country.

In fact, I've said repeatedly that enough time has passed for us to ask what Conway Mackenzie has accomplished for what they have been paid, rather than making the assertion that they are helping us without having anything to back that assertion up.

Actually, the only thing people seem able to say in response to what I say is either they don't care or someone has to do it because we couldn't/wouldn't or "people just don't like the EM". Now that's not analysis either is it?

[Wesley Mouch]

Were that life was so simple. Orr's just one guy. He's got 18 months to straighten out 50 years of willful neglect and selfish actions. I'd be disappointed if Orr spent his time sweating each and every action of each and every actor in the city. Two things can be true at the same time. This individual billing line-item should be reviewed and may need adjustment. Orr is doing a fine job of managing the overall operation.

As any manager know, there are battles to fight, and battles to avoid. All may be just. Resources are finite.

We may think this one line items is everything. But its not. There are probably a few million decisions happening each day. Success will be if Orr can build an effective team. Not a perfect one.

[Locke09]

Were that life was so simple. Orr's just one guy. He's got 18 months to straighten out 50 years of willful neglect and selfish actions. I'd be disappointed if Orr spent his time sweating each and every action of each and every actor in the city. Two things can be true at the same time. This individual billing line-item should be reviewed and may need adjustment. Orr is doing a fine job of managing the overall operation.

As any manager know, there are battles to fight, and battles to avoid. All may be just. Resources are finite.

We may think this one line items is everything. But its not. There are probably a few million decisions happening each day. Success will be if Orr can build an effective team. Not a perfect one.

I do not disagree with much of what you say here - in principle.

But you know that Orr isn't just one guy. He has a highly paid team of people supporting him. Why, he even has Gary Brown who is supposed to be doing something. Then there is the Financial Advisory Board that is still in tact and is supposed to be doing something. Shouldn't he be able to delegate contract compliance and expense monitoring to someone on his team? Because it's not just about this one line item, but the many line items on many contracts. It's about being able to tie deliverables to the expenditures.

I wouldn't expect Orr to be watching expenditures at all.

[Wesley Mouch]

I do not disagree with much of what you say here - in principle.

But you know that Orr isn't just one guy. He has a highly paid team of people supporting him. Why, he even has Gary Brown who is supposed to be doing something. Then there is the Financial Advisory Board that is still in tact and is supposed to be doing something. Shouldn't he be able to delegate contract compliance and expense monitoring to someone on his team? Because it's not just about this one line item, but the many line items on many contracts. It's about being able to tie deliverables to the expenditures.

I wouldn't expect Orr to be watching expenditures at all.

I assume that contract compliance and expense monitoring is delegated. And perhaps this issue is being addressed. All we really know is that the Union raised this issue. Why was this important to them? That's pretty obvious. But there are many more issues, and many more important issues. I'm sure its a lot better for the Unions to have debate about this guy's pay than it is about practices like pension spiking.

[Hermod]

In fact, I've said repeatedly that enough time has passed for us to ask what Conway Mackenzie has accomplished for what they have been paid, rather than making the assertion that they are helping us without having anything to back that assertion up.

Conway MacKenzie is probably turning over rocks to see what slimy things crawl out from underneath them. This "kid" is probably out there data collecting. CM can't really get anything accomplished until they know what they are working with.

When I was his age, I was an ordnance company commander responsible for 120 men and the automotive maintenance and repair of 1200 or so customer vehicles. Of course a lieutenant could only bill the gummint at $222.30 a month.

[mam2009]

Most [[if not all) firms bill the same rate for Associates and Sr Associates.

And while that may be true, there is nothing wrong with asking the questions. No matter who is running things, leadership should be accountable to the people who pay them and the people on whose behalf they are supposed to be working.

I am hopeful Mr. Orr will successfully do what he needs to do to right-size the budget, reorganize our debt and improve City services -- a lofty goal for an 18 month engagement, but if spending lots of money on consultants who are supposedly better qualified than City employees is the way to accomplish it, that's not new to the City of Detroit . Consultants have been making money off Detroit for years. And the media and unions and citizens have been examining those decisions for years. Scrutiny is always appropriate.

Iheartthed, this comment was not necessarily for you. I'm just trying to emphasize the larger point. There are plenty of qualified minds employed in professional positions [[accountants, auditors, attorneys, IT administrators, etc -- whose total annual compensation costs the City well below $275/hour, btw). This young man graduated from MSU last year. I'm not knocking MSU, but it's not Harvard or Yale. I'm sure plenty of the City's professional employees are MSU grads or from schools with similar academic standards. Let's not automatically assume a $275/hour SENIOR associate from a consultant company is automatically worth $$275/hour. A little scrutiny is certainly in order here. Its ok to question.

[Wesley Mouch]

And while that may be true, there is nothing wrong with asking the questions. ... A little scrutiny is certainly in order here. Its ok to question.

It is indeed our collective job to have methods of 'accountability'. I don't think public questioning of this individual line-item is however much accountability. What a contractor should be 'accountable for' is results at reasonable cost.

Our collective responsibility for accountability isn't served by celebrating media and political spin. We collectively failed to listen to Joe Harris and many others who warned us of much larger issues. We preferred things the way we were. Dumb, Lazy, Stupid, and Rich -- believing the the money was in the bank to pay for all our promises.

We could better exercise our democratic responsibilities by electing leaders who are willing to tell us the truth. Tell us how we have to spend within our means. An important question is how democracies can stop becoming patronage machines. Not how much some young man is billed for by a respected consultant.

[48009]

Well, asked and answered. Unions have no concept that education and ability drive pay. If the law firm were unionized, the kids would be getting $20/hour and the guys doing the exact same thing but have there for ten years would be getting $800 an hour.

You think this kid is in his position due to drive? HA! More than likely some nepotism got him his job and cronyism & borderline fraud got his employer this bloated contract. Hardly things to admire.