Union official stands in protest against the corporate-engineered plans to drive more people from the city at the aegis of the banks and multi-national firms who have wrecked Detroit over the last five decades., a photo by Pan-African News Wire File Photos on Flickr.
Detroit water, sewer department should cut 81% of workers to slow soaring rates, board is told
3:04 PM, August 8, 2012
By John Wisely
Detroit Free Press Staff Writer
The Detroit Water and Sewerage Department should get rid of four out of every five of its employees and outsource billing, maintenance and other functions to save about $900 million over the next decade, a water-board-commissioned report released today said.
The changes are needed to slow water and sewer rate increases which have more than doubled in the past decade and are set to rise about 8% annually if changes aren’t made, said Director Sue McCormick.
“That’s not acceptable, we’re going to bring that number down,” McCormick said.
The recommendation calls for the department to slash its workforce from 1,978 employees currently to about 374 over five years. It also calls for an additional 361 outside employees to work for the department on a contract basis. That would bring the total workforce to 735, about 63% below current levels.
McCormick said she hoped to make most of the reductions through attrition, though she wouldn’t rule out layoffs. She couldn’t say when the reductions might begin.
The Board of Water Commissioners is reviewing the recommendation now and Chief Operating Officer Chris Brown noted that it’s still a preliminary and could change.
McCormick insisted the plan is workable, though she acknowledged the proposed changes are dramatic.
“Everyone has been surprised by that number,” McCormick said of the workforce reduction.
“It’s not possible. They don’t have enough people as it is right now,” said John Riehl, president of AFSCME Local 207, which represents hundreds of water workers. “They are just dreaming to think they operate that plant with less.”
Riehl said consultants and computers can’t dig up a leaking pipe or fix a damaged machine, those things only get done “by a worker with a wrench in his hand.”
Riehl was waiting for a full briefing on the plan, but said his union will fight the job cuts.
But worker options appear limited. Unlike the emergency manager law that now is subject to the November election, the water department’s authority to make wholesale changes stems from a federal court order issued in a long-running pollution lawsuit.
Last fall, U.S. District Judge Sean Cox told city officials they could ignore the city charter, local laws and even union contracts in their effort to meet requirements of the Clean Water Act. The order lifted limits on outsourcing and eased worked rules to allow managers more flexibility. Cox made it clear in his order that he viewed a more efficient department as necessary to meet pollution standards over the long term.
Brown said Cox hasn’t been briefed on the report and probably won’t be. The judge sets the goal and the department must find a way to meet it, Brown said.
Consultants interviewed more than 200 employees before making recommendation
The Water Department issued a $175,000 contract to EMA, a St. Paul, Minn.-based consulting firm, to conduct the study. The firm interviewed more than 200 employees, audited procedures and reviewed other operations before making its recommendations.
Among the findings, the department spends about 44% of its income paying down debt for things like pipes and treatment plants. Because those costs are set for the long-term, any savings must come from operations.
“We found the organization is siloed, with inflexible job descriptions, multiple reporting levels and a lack of training,” said Brian Hurding, vice president of EMA.
The reports says the department has 257 job classifications and that number will fall to 31 under the plan. On Wednesday afternoon, Hurding told the water board that one of the classifications was "horseshoer." He said there is one employee in the classification who was a welder. Later, Hurding told reporters: "We didn't find any horses. That's the strangest job classification I've ever seen."
The study found the average cost per employee was $86,135 and by reducing the workforce, the department plans to reduce costs by as much as $138 million annually.
Hurding noted that savings can only be achieved by upgrading technology, outsourcing and retraining of employees for new skills.
McCormick said the department will expect employees to have higher, more diverse skills and it will likely pay them more. Cox’s order exempts the water department from many of the pay grades and other work regulations that other city employees fall under.
“We have to be competitive to attract the kind of people we need,” McCormick said.
Oakland County Water Resources Commissioner John McCulloch said the report confirms what other studies through the years have found: a bloated, inefficient department.
“The Detroit Water and Sewerage Department was the quote, unquote, dumping ground for city employees for decades,” McCulloch said this morning. “Given the cumbersome nature of city ordinances and contracts, it was very difficult to run this very efficiently.”
McCulloch was waiting to hear full details of the report today, but said the department now has a roadmap to efficiency, a director who is willing to implement it and a federal judge “ready to make the tough decisions.”
“I think we’re at a turning point,” McCulloch said.
State Rep. Kurt Heise, R-Plymouth, a former Wayne County director of environment and a longtime water department critic, called the plan a necessary step, noting the current system was built for a population and an industrial base that no longer exists.
“Is this right-sizing going to reflect lower rates for customers and is it ultimately going to result in the Detroit Water and Sewerage Department being able to comply with the Clean Water Act?” Heise asked.
The Water Board still must approve the approach. Chairman James Fausone said Tuesday that the plan tracks with the direction the board wants.
McCormick said if the board approves, the next step will be to work on validating the estimated cost savings and to begin work on the reorganization.
Contact John Wisely: 313-222-6825 or jwisely@freepress.com
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