Last week, the Detroit City Council took no action on a $48 million contract with EMA, the consultant behind a controversial plan to reduce DWSD's workforce by some 81%.
Earlier today, the Detroit City Council took action, but voted to reject the EMA contract outright and along with it DWSD's restructuring plan. The Detroit Free Press reports (here) that the City Council vote was unanimous. Council member Ken Cockrel Jr. cited the EPA's October 12, 2012 request for 45 days to review the EMA plan as a key reason to delay approval.
“Those 45 days have not elapsed yet," Cockrel said. "We have not heard from the EPA. They have not indicated that they have no concerns. And I think when you have a federal agency that’s in charge of regulating environmental concerns for the country…I think we ought to give them the time to do it.” (Cite: Michigan Radio)
The Board of Water Commissioners, anticipating this outcome, last week voted to proceed with EMA under a $2.0 million stopgap contract. This is only a temporary solution.
Comment: So what's next? Will the Water Board acquiesce (uh, not likely) or proceed with (24) consecutive $2 million contracts, each one just small enough to avoid a City Council vote? (Possibly) Or will Judge Cox resort to "more drastic measures" as he has alluded to in several of his rulings this past year? (What will that look like?) And is this any way to run a public utility, one that serves 4.3 million people? Really?
For more about DWSD Update, click here.
Confronted with the Detroit City Council's failure to take action toward approval of a $48 million contract with Minneapolis-based consultant EMA, the Detroit Board of Water Commissioners yesterday held a Special Meeting and approved a resolution authorizing Director Sue McCormick to negotiate a stopgap agreement with EMA, for an amount not to exceed $2.0 million.
The term of this agreement will cover the period from November 14, 2012 to June 30, 2013. And because of the dollar amount, this contract will not require City Council approval.
Comment: It is unclear to me why City Council was required to approve EMA's $48 million contract -- it was approved by the Water Board on September 7, 2012 -- after all of the steps taken in the past 12 months by Judge Cox and others to separate DWSD from the rest of the City of Detroit. DWSD now has its own general counsel, HR department and finance. Submitting a contract that comes with an 81% staff reduction, to an elected body for approval, is a suicide mission. The Board of Water Commissioners knows this; Judge Cox must know it too.
This situation probably explains a November 8, 2012 Root Cause Committee Report that requests, in part, that DWSD be allowed to exempt certain contracts from City Council approval. Without the Court giving the Board of Water Commissioners sole authority to approve the entire $48 million EMA contract, it will surely languish with City Council taking no action for the foreseeable future.
On the other hand, what are the limits of Judge Cox's authority? Can he effectively divest City Council of its role in reviewing and approving significant contracts? Does enforcement of the Clean Water Act trump these concerns? What do you think?
Update (11/20): Earlier today, the Detroit City Council voted to reject the EMA contract. The Detroit News reports (here) about Council's decision. Now what?
For more about DWSD Update, click here.
On October 12, 2012, the U. S. Environmental Protection Agency (EPA) asked Judge Sean Cox for 45 days to evaluate DWSD's recently-announced plan to dramatically cut its workforce and to take no further actions toward implementing the plan during this evaluation period.
In a two page document(*) filed with the U. S. District Court captioned "Notice of the United States Regarding the DWSD's Motion for Interim Order," EPA Attorney Annette M. Lang, and Assistant U. S. Attorney Peter A. Caplan request that the Court give the EPA time to evaluate DWSD's proposal and whether it would affect compliance with the Clean Water Act:
"The Michigan Department of Environmental Quality ("MDEQ") recently informed EPA about a proposal that the Detroit Water and Sewerage Department ("DWSD") was considering that recommended, inter alia, a dramatic reduction in staffing level within DWSD's wastewater treatment plan and combined sewer overflow operations. EPA has not had the opportunity to review and evaluate the potential impact and implications of the proposal on DWSD's compliance with the Clean Water Act, 33 U.S.C. 1251, et seq, and its NPDES permit, including the operation and maintenance requirements contained therein. To the extent that actions by this Court on DWSD's Motion for Interim Order may open the way for DWSD's initiation of the implementation of that proposal, EPA seeks to notify this Court and the parties of its interest in having the opportunity to meaningfully undertake an evaluation of the proposal prior to any such action.
"During the period of its evaluation of the proposal, EPA plans to work with both MDEQ and DWSD. To that end, managers and staff from EPA are already planning to meet with managers and staff from MDEQ on Tuesday, October 16, 2012, to discuss and evaluate the current situation. The meeting is intended to provide further clarification on a path forward.
"With this notice, EPA is not taking any position on any aspect of the proposal before DWSD.
"Accordingly, EPA seeks a period of forth-five (45) days to evaluate the potential impacts of the proposal on CWA compliance and asks this Court not to take any actions that would open the way for DWSD to initiate the implementation of the proposal prior to that time. DWSD has not reported any violations of its NPDES numeric limitations on solids since November 2011 and has not reported any other NPDES numeric limitations since March of this year [2012]. Therefore, nothing in the record would indicate that immediate commencement of the implementation of the proposal is required." (emphasis added)
Note: The case that Judge Cox currently presides over was originally filed in 1977 by the U. S. Environmental Protection Agency to enforce compliance with the Clean Water Act. The EPA has not played an active role in the case, however, for a number of years. The EPA's request that Judge Cox 'take no action' for 45 days is an interesting development. Judge Cox is not bound to comply with the EPA's request, but it is unlikely that he would simply ignore it. Stay tuned for how the Court and DWSD responds to the EPA's request.
(*) For readers with a PACER Account, the EPA's Notice was filed 10/12/12 in Case No. 2:77-cv-71100-SFC at Dkt #2492. If you're interested in a copy, I'd be glad to e-mail it to you. Just write me and put "EPA Notice" in the reference field.
For more about DWSD Update, click here.
At a Special Meeting of the Board of Water Commissioners this morning, the Board unanimously approved a resolution that authorizes the Director, Sue McCormick, to negotiate and execute a 5 year professional services contract with EMA, Inc. for an amount not to exceed $48 million.
EMA is the consultant that on August 8, 2012 recommended that DWSD cut staffing levels within the Department by 81%. Crain's Detroit Business also reported on this story here.
The $48 million EMA will be paid over 5 years breaks down as follows:
- $19.5 million - Consulting Services ($17M) and Expenses ($2.5M)
- $21 million - Outsourcing Services
- $7.575 million - Contingency Reserve
This information was provided to Board Members by Matthew Schenk during this morning's Special Board Meeting.
Note: I realize the breakdown figures exceed $48 million a bit, but that's what I wrote down in my notes. Once the minutes for this meeting were published, or if I can get a copy of the full text of the Board resolution, I'll fix these numbers.
Update (9/7): The Department published a press release this afternoon announcing the Board's approval of the EMA contract, along with a bit more explanation of what's expected to be part of EMA's contract.
"In addition to the [consulting] services listed above, EMA will work on the development, assessment, and implementation of non-core outsourced services as originally identified within the 90-day operational assessment. Non-core services include building maintenance, grass cutting, snow removal, and janitorial services. Over the term of the agreement, it is anticipated that those outsourced services will come at a cost of roughly $21 million, resulting in an expected net savings to DWSD of more than $50 million."
Update (9/10): Here's the breakdown of projected costs from Section 10.1 (Costs) of EMA's Phase 2 and 3 Proposal:
Update (9/12): The Detroit News is reporting (here) that a formal contract with EMA is expected by October 1, 2012.
Update (11/14): The Detroit News reports (here) that the Detroit City Council, which apparently has to approve EMA's contract, has put off a vote. One Council Member referred to the contract as "outrageous." No surprise. Its unclear, at least to me, why City Council is required to approve this contract after all of the steps taken in the past 12 months by Judge Cox and others to separate DWSD from the rest of the City of Detroit. DWSD now has its own general counsel, HR department and finance. Submitting a contract that is part of an 81% staff reduction to an elected body for approval is a suicide mission. The Board of Water Commissioners knows this; Judge Cox must know it too. This situation probably explains a November 8, 2012 Root Cause Committee Report that requests in part that DWSD be allowed to exempt certain contracts from City Council approval. Without the Court giving DWSD sole authority to approve the EMA contract, it will surely languish with the City Council for the foreseeable future.
For more about DWSD Update, click here.
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