Vehicles, equipment from privatized DPW, PLD on the auction block
Detroit workers losing hundreds of jobs, residents lose services
“Assets” stored in Herman Kiefer parking lots—after Health Dept. privatized, services eliminated/ outsourced, 400 workers laid-off
Sale used to “pay off debt,” banks profit
Muncipal Market Advisors warned Oct. 27 that divesting city assets could lead to a second Chapter 9 bankruptcy in very near future
November 3, 2014
By Diane Bukowski
DETROIT – The City of Detroit, a/k/a Emergency Manager Kevyn Orr and his appointed COO Gary Brown, will auction “more than 450 surplus vehicles it no longer needs. Despite no longer being needed by the city, many of these pieces of equipment can serve private contractors or other municipalities well for years to come,” according to a release on the city’s website.
A large banner strung across the John Lodge Freeway side of the now abandoned Herman Kiefer Health Complex advertises the online auction, set for Nov. 5 and 13. Parking lots there currently house assets from the Public Lighting and Public Works departments.
“Many of these vehicles are in very good working order and have a lot of life left in them,” said Gary Brown, City of Detroit Chief Operating Officer.
So did the jobs of over 165 DPW workers, replaced by the for-profit Rizzo Environmental Services, based in suburban Sterling Heights, and Advanced Disposal Services, with corporate offices in Ponte Vedra, Florida. The companies may as well have been holding slave auctions. The City Council gave them these jobs and a contract for a rock bottom price of $122 million.
Long-time DPW worker LaDonna Nash told the WSWS newspaper (see link below), “If the new managers don’t like you, then you’re in trouble. All of the buildings here are going to be sold. The work for container repair, forestry, parks and recreation; all of it is going to private companies.
“They say some of us can transfer to other departments but that will be bumping other city workers out of their jobs. The new companies don’t even have women hauling trash. There are some 20 female workers and we are going to lose our jobs. I’m in my 40s—what am I going to do? Then there are the guys who are on disability. These guys were hurt on the job here—the foremen told them to do dangerous tasks they shouldn’t have been doing. They’re going to be out of a job too.”
EM Orr told DTE the entire Public Lighting Department, including its revenue-generating provision of lighting to public buildings, will be phased out over the next five years to DTE, which has already taken over PLD’s electricity grid. The newly-founded regional Public Lighting Authority plans to dismantle 46,000 of the city’s 88,000 streetlights, in areas targeted for “blight (i.e. Black) removal,” according to Orr’s May 12, 2013 Financial and Operating Plan.
PLD was founded in the 1920’s and was originally meant to provide electricity to the entire city, including its residences. The city’s former Auditor General reported several years ago that those service lines could have been revamped to provide revenue-generating, public cable TV service to city residents at lower costs.
PLD has been one of few opportunities for Black and women skilled trades workers such as electricians to get long-term employment.
Profit from the auctions is to be used to “pay down debt,” with some allegedly restored to the departments, according to an Oct. 30 article in the Monitor. Considering there will be no DPW or PLD, it is clear only the banks will profit from these auctions.
Herman Kiefer formerly housed the Detroit Health and Wellness Department. The Health Department served the people of Detroit beginning in 1825, running three hospitals and five clinics, as well as coordinating a home physician visit program.
One of its hospitals, Detroit General, founded in 1918, was privatized in 1980 when it was transferred to the Detroit Medical Center and became Detroit Receiving Hospital. Detroit Mayor Mike Duggan, then DMC CEO, sold the DMC to Vanguard Health, 70 percent owned by the Blackstone Hedge Fund. Vanguard then sold it to Tenet. Receiving is now laying off most of its custodial staff.
Over four hundred workers there were laid off when the Health Department was handed over to the private Institute for Population Health (IPH) in May, 2012, during the fall-out from the “Consent Agreement” that led to the appointment of Detroit Emergency Manager Kevyn Orr.
The IPH has now itself gone bust. Nearly all the services at the Health Department were paid for by federal grants, which the City of Detroit lost as a result.
“We provide services to 300,000 clients annually,” Laurie Walker, President of AFSCME Health Department Local 457 told the City Council before it voted to privatize the Department . “We enjoy our positions and care about the people. We live in the city, own homes here, and pay taxes. Last year, two city workers on my block were laid off and now their homes are vacant. I will have to consider moving as well even though I love this city.”
In recent decades, the Department provided Maternal and Infant Health Programs, in a city where the 2009 infant mortality rate was 14.8 per 1,000, more than double the national average of 6.3 per 1,000. It provided WIC (a federal food program for women, infants and children), immunizations, lead screening, vision and hearing testing, family planning, nurse home visits, and substance abuse treatment among other services. Its vital records division and adult and pediatric dental clinics were self-sustaining through fees.
The Council, at the request of former Mayor Dave Bing, also got rid of the federally-funded Detroit Human Services and Workforce Development Departments and their employees, along with the grants.
The city release also says that 79 transit buses and “historic” trolley cars will be auctioned off. Although the Detroit Department of Transportation still exists, largely because of federal regulations preventing replacement of unionized employees, the eventual plan is to fold it into the Detroit Regional Transit Authority.
The contract for the auction has been awarded to Hilco Industrial, a global corporation headquartered in Birmingham, Alabama, and Miedema Auctioneering and Appraisals, headquartered in Byron Center, Michigan. Both companies are white-owned and show only white executives on their staff.
On Oct. 27, Municipal Market Advisors said such asset sell-offs, among other factors, are likely to lead to a second Chapter 9 bankruptcy filing almost as soon as Detroit exits the first.
They said that after privatizing and selling off assets,
“Detroit has – in our opinion – set itself up to leave bankruptcy not only with a reduced debt load but with little financial and operational flexibility for the future,” the firm wrote. “We think that it is more than ‘feasible’ that the city finds itself facing fiscal difficulties over the next five years. In effect, Detroit may wind up, on its first day of out of bankruptcy, as one of the most likely candidates forChapter 9 in the state of Michigan.”
City announcement: City of Detroit to Hold Two Auctions of Vehicles Machinery and Shop Equipment in November
Hilco brochure: Hilco brochure