Tough economic times pressure Detroit to sell its assets

DETROIT — Back in January, before city workers were threatened with mass layoffs and residents dependent on public transportation faced the prospect of bus service elimination, the issue that sparked the most passion was whether Michigan’s largest city should retain or sell key city assets. Now, with little protest from city council members and activists, a plan to sell of a key piece of Detroit’s water system has been OK’d.

The prospective sale of city-owned facilities repeatedly dominated mayoral debates in this winter’s special election primary. Local grassroots organizations and labor unions fought to retain ownership of anything that was on the list for sale, namely the Cobo Convention Center, the Detroit-Windsor Tunnel and a piece of deteriorating infrastructure popularly known as the Oakland-Macomb Water Interceptor.

Since February, however, bigger threats have been brewing on the city’s financial horizon, dominated by a $300 million budget deficit. Dave Bing, who came out victorious in May’s special mayoral election, has warned of payless paydays under the status quo; Cobo, the most controversial building in the fight over city assets, is now under regional control; and vital city services are slated for cuts, including the elimination of most weekend bus service.

So on Tuesday when Detroit City Council voted to transfer ownership of seven massive interceptors, 12 metering stations and the Clintondale Pump Station over to suburban Macomb County, the plan moved quickly and without major drama in the council chambers.

Although some citizens in attendance at the special meeting had to be sternly quieted by City Council President Kenneth Cockrel Jr., the transfer of the Detroit-Macomb Water Interceptor was relatively uncontroversial when measured up against the furor that’s been sparked by Bing’s proposal to slash city services, cut pay and eliminate municipal jobs.

In vulnerable economic times, Detroit is shedding assets to ward off bankruptcy. Although the Macomb interceptor and pumping stations are worth more than the city got for them, the issue at hand is debt. Like Cobo, the city cannot afford pay for expensive repairs, so anyone offering to make the repairs is likely to gain control.

Macomb County is now the proud owner of its own sewage system, which was built with Detroit tax dollars in the 1960s when the suburban county could not afford to build its own sewage system. But now the tables have turned.

In return for the interceptor, Detroit is relieved from outstanding debts on the system and is no longer responsible for the $125 million in repairs that Water and Sewerage Department officials have said were vital to prevent a “catastrophic collapse” of the system. So while the city did not make any money in the deal, it did eliminate debt and future obligations.

Detroit City Council members voted 5-2 in favor of the transfer with Martha Reeves and JoAnn Watson opposing the plan. Barbara-Rose Collins, who famously sang “Onward Christian Soldiers” in council chambers to protest the Cobo transfer deal in March, was absent from the special meeting.

Watson got into a heated exchange with Detroit Law Department representative Robert Walters, who countered her argument that selling part of the Detroit sewage system without a vote of the people was a violation of city charter.

“The city charter says that ‘the city shall not sell any or in any way dispose of any property needed in the in the operation of any city owned public furnishing of water and sewage service unless approved by the majority of city voters,’” Watson read from the charter. “Why would it not be put before the voters in November?”

Walters argued that the charter provision refers to “property needed in the operation” of the sewage system. He said the Macomb interceptor and its corresponding service stations are not vital to the overall operation of the Water and Sewerage Department. “One piece of pipe does not violate that provision of the charter,” Walters told Watson.

Councilwoman Brenda Jones spoke up before the vote came, addressing concerns for citizens that the move to sell the interceptor was a step toward suburban control of the Water and Sewerage Department.

Walters said Detroiters can rest assured that a takeover is not in the works. “Taking the water department from the city would require an act of legislature,” he said.

The transfer leaves union memebers working at Macomb County sewage plants in an uncertain employment position under the new ownership. Union leader John Riehl, president of Local 207 of the American Federation of State, County and Municipal Workers fought unsuccessfully this winter to get a public vote on the transfer.