Bing's turnaround plan

[buildingsofdetroit]

Well, he finally rolls it out:

http://freep.com/article/20091007/NE...oit--Bing-says

[skyl4rk]

Shocking.

280M deficit currently, 300M estimated this fiscal year.

340M internal and external borrowing.

The graphs in appendix I are frightening.

Thank you to Mayor Bing for starting to address this issue.

[Fnemecek]

Thank you to Mayor Bing for starting to address this issue.

Don't gush too much. After a little more than 5 months on the job, all we have at this point is 144 page report that:

1. Doesn't cite the sources for any of the statistics that it mentions [[e.g., the number of Detroit's municipal employee's vis a vi national averages);
2. Doesn't provide support for most of their projected cost savings [[i.e., they'll claim that a certain action will result in a savings of X but fail to show how they derived at said number); and
3. Makes claims that are utterly ridiculous [[e.g., the report actually praised the DEGC for its transparency, which is basically the same as congratulating the Detroit Lions for the Super Bowl victories).

[48202]

The Free Press article says that the report is 145 pages, but the linked PDF file is only 21 pages. Is there a more detailed report out there?

[Fnemecek]

The full version of it is @ http://www.ci.detroit.mi.us/Portals/...l%20Report.pdf

[48202]

Thank you.

[izzyindetroit]

God the City of Detroit website fucking blows. A god damn 16 year old can put together a better website than that.

[Novine]

I see Frank's bashing Mayor Bing like he did Mayor Cockrel. But I agree with him that it's a lot of fluff and not much substance. Who's going to buy up the vacant city buildings and land that Bing is proposing to unload? Speculators perhaps but not for many dollars. Some of the "opportunities" for savings also could turn into opportunities for friends and allies of Bing to cash in. Watch who jumps it to take over various services and functions as Bing outsources them to private service providers.

[skyl4rk]

Making the public aware of the extent of the problem is a first step. The only way to push through the drastic measures that have to be taken is to make the public aware of how bad the situation is.

Getting control of the purchasing function in one department is key because if it is decentralized, the executive has little control over the bureaucracy [[I mean administration). This may the biggest strategic issue to deal with, and may be the reason why past attempts to control spending failed.

Looking at the General Fund charts in Appendix I, in fiscal year 2007-2008, the City had only 1M operating deficit, but an accumulated deficit of 155M. Spending has decreased slightly from 07-08 to the current year 2009-2010. The problem is not increased spending, the problem is a decrease in revenues from 1,360M to 1,270M over that time period, and a continued projected decrease in revenues. However, these charts do not seem to show the problem related to borrowing to pay for deficits in the past, and there may be problems outside the General Fund that are not reflected in its budget.

In Appendix III, City of Detroit Indebtedness, under Other, it shows Pension Obligation Certificates and RANs/TANs. The text of the document indicates that this is what was used to carry the City over by paying budget deficit with these funds [[page 6). The total amount of this debt is about 1.4 billion; the text states that of this amount 330M was used to cover past deficits.

Looking at the projected revenues, the City will need to downsize through the next few years to reflect available revenue for the General Fund. [[This is an obvious statement). But even when they do so, the City will still likely be in a position of facing cuts every year until revenue stabilizes. No one can predict where revenues will be in 5 years, they may continue to fall. So even if the executive can patch all of the leaks in the City's finances, there will still be a need to reduce the size of city government to reflect a falling revenue source. This is assuming that new revenue sources are not available, perhaps some can be found?

Another source of revenue:

The City should consider selling the water utility to a consortium of municipalities that are served by the system. That would bring some cash in. They almost stole it from the City using the legislature a few years ago, why not negotiate a price and sell it to them with teh City as a participant in the consortium. It would be a good step towards regionalism in SE Michigan.

[Fnemecek]

I see Frank's bashing Mayor Bing like he did Mayor Cockrel. But I agree with him that it's a lot of fluff and not much substance.

I'm an equal opportunity curmudgeon.

[cmubryan]

At first glance, I don't see anything wrong with the city's website.

http://www.indy.gov/Pages/Home.aspx

http://www.ci.minneapolis.mn.us/

http://www.phoenix.gov/

http://www.atlantaga.gov/


Are these really that much better?

[Fnemecek]

Making the public aware of the extent of the problem is a first step. The only way to push through the drastic measures that have to be taken is to make the public aware of how bad the situation is.

I agree that it's a first step. However, there weren't any properly sourced details in this report that weren't already widely reportedly in the news media.

The closest thing to new, relevant information in that report was the claim that Detroit has 25% more municipal employees per resident than the national average. Unfortunately, the report did not cite a source for said assertion so we have no way of knowing its legitimacy.

[Stosh]

I agree that it's a first step. However, there weren't any properly sourced details in this report that weren't already widely reportedly in the news media.

The closest thing to new, relevant information in that report was the claim that Detroit has 25% more municipal employees per resident than the national average. Unfortunately, the report did not cite a source for said assertion so we have no way of knowing its legitimacy.

Duh. When you ARE the source, why have to cite your sources? Really. There's no way in hell anyone can make this more apparent. The city is broke. There's no money. Things have to be cut. Crying about little BS "sourced" details doesn't help matters.

You can easily see the problems facing the city. It's easily apparent that there needs to be cuts. It's apparent that there is a plan, flawed as you may think it is. Question here is, what's Barrow's plan? [[crickets chirping) Thought so.

Barrow's plan is to play the populist route. Just like the way the unions support him now. Say whatever to get elected. Then once he gets elected, then what?

[Novine]

"The City should consider selling the water utility to a consortium of municipalities that are served by the system. That would bring some cash in. They almost stole it from the City using the legislature a few years ago, why not negotiate a price and sell it to them with the City as a participant in the consortium. It would be a good step towards regionalism in SE Michigan."

The water system is protected by the State Constitution. The effort to "steal" the system never would have survived a legal challenge. As for the money that the system would bring in, any proceeds of the system would first have to go to any outstanding debts that the system has unless the buyers agreed to take those on. Why would they? As for selling it, what's the benefit? It's a possible one-time injection of cash from a department that doesn't cost the city's bottom line. Sounds like a lot of work for little gain.

[Novine]

Anyone notice what was missing from the report to Bing? Any consideration of reconsidering the massive tax breaks and subsidies provided to wealthy downtown property owners [[Ilitch for example). We keep hearing about how "everyone" has to share the pain but apparently "everyone" doesn't actually include everyone, just those without the money and power to leverage the pain onto everyone else.

[Stosh]

Anyone notice what was missing from the report to Bing? Any consideration of reconsidering the massive tax breaks and subsidies provided to wealthy downtown property owners [[Ilitch for example). We keep hearing about how "everyone" has to share the pain but apparently "everyone" doesn't actually include everyone, just those without the money and power to leverage the pain onto everyone else.

That's a good point. Of course, that's never on the table anywhere. Not seeing how the tax breaks are structured [[X number of years for Y development), it seems to me that would be going back on promises made to these corporations and individuals.

Going totally back on this would probably have a chilling effect on attraction of new development and businesses. But a minor adjustment in the tax break, not a total abatement, could happen with the consent of the owners. I suppose all they would have to do is ask and see what happens. Maybe they already have, and were told to take a hike?

[Novine]

Companies make all kinds of promises when they get those breaks and few are ever held to account for not fulfilling the terms. I bet Bing's team never asked. Why would they? Look who they represent.

[Stosh]

Companies make all kinds of promises when they get those breaks and few are ever held to account for not fulfilling the terms. I bet Bing's team never asked. Why would they? Look who they represent.

If they back out of promises, I think then that would be a trigger for some sort of reduction. But how many have actually not done as promised intentionally? How much of this is predicated on outside factors out of their control?

[Danny]

GREAT IDEAL BING!

Your turn around plan is save this city millions of dollars. A first start to rise this city out from the ashes.

[Fnemecek]

Duh. When you ARE the source, why have to cite your sources?

The City of Detroit is the source for statics about how other cities around the country operate and spend their money???

Since when?

[Stosh]

The City of Detroit is the source for statics about how other cities around the country operate and spend their money???

Since when?

Ok, that's a good point. In the comparisons they make, which cities are they comparing to? The study mentioned regarding employees per citizen ratio. A comparable study link is below:

http://www.publicpurpose.com/ge-2000cities.htm

Bear in mind these are 2000 figures. Other cities may have changed their figures up or down by now.

Also this:

http://www.afsc.net/PDFFiles/The%20P...20Services.pdf

Fifty years ago, Detroit was the fourth largest city in the United States, with a population of 1.7 million people, and at $8,500 per year, one of the richest cities in terms of per capita income. It was 3.5 times the size of Indianapolis, the 26th largest city, whose income was almost identical on a per capita basis.[1] Today Detroit and Indianapolis are the 11th and 12th largest cities, respectively, with Detroit's population cut in half from 50 years ago [[and losing 3,000 people per year this decade), while Indianapolis has grown by 70% during the same time frame.Remarkably, Indianapolis now has a per capita income 50% greater than Detroit's.

How did this happen? One answer, according to the Mackinac Center for Public Policy, is that Detroit's city government is far larger, more regulation prone, and more bureaucratic than Indianapolis's city government: the ratio government productivity, is 50:1 in Detroit, one of the worst in the United States, but is 203:1 in
Indianapolis, one of the best.

[Novine]

What are tax breaks worth?

http://www.businessweek.com/ap/finan.../D9B78OAO0.htm

[skyl4rk]

Corporate welfare. Unfortunately, thats the name of the game in economic development today.

[vetalalumni]

... the City of Detroit website ... blows.
... A ... 16 year old can put together a better website than that.

The City of Detroit website is rather bland , but that is not terribly unusual. Most municipalities will tend to focus primarily on functionality and not flash.

In reading through the basic Crisis Turnaround Team report [[PDF), it certainly ain't sexy content-wise. Based on the illuminated credentials of the participants, the quality of the report is unimpressive. And the SWOT analysis appears not comprehensive enough after a full 100 days [[and 5,000 volunteer hours).

[Novine]

"Corporate welfare. Unfortunately, thats the name of the game in economic development today."

We've seen how well that's working these days.