Does a NEW Fifty Million Dollar Contract from the City of Detroit make sense?

This is an Early Christmas present, but not for Detroit.

 

The city of Detroit is considering a no-bid contract worth nearly $50 million to a Minneapolis based company called simply EMA. Visiting the company’s web site raises more questions regarding the company’s real capabilities. There are a number of issues and questions raised with this proposal. The city is still facing a federal lawsuit with the EPA that is forcing the city to make changes to the water system to comply with the Clean Water Act. Will this contract interfere with the city’s move toward compliance? Will this contract force a delay or a setback in the progress already accomplished? IF this contract is approved will it extend Judge Cox oversight of the board?

 

Other issues to consider include the following;

  • This is a no bid contract. With this type of contract the city won’t know if the price is fair and reasonable.
  • The water department is reportedly under an authority being ruled by federal judge Cox. Why is the city of Detroit involved in the contracting of work for the water department?
  • The water department has its own segregated budget and does not have a deficit. Why is this contract not funded with water rate revenue?
  • If this contract is funded by the city of Detroit, this will force the city of Detroit into bankruptcy.
  • There is a report that EMA is being investigated by the EPA, if true any discussion on this proposal, and votes, should be cancelled or postponed until after the investigation.
  • Did EMA participate in writing this contract that is now a no bid contract for EMA? Earlier this year EMA provided a report to the city, paid for by the city, that detailed a need specifically for the tasks outlined within this contract.
  • The owners, investors, board members and other key players of this non-Michigan company are not known. Are there any connections to city or state business or political leaders?
  • When was the last audit for the water department? Without an audit, how can any proposed benefits be substantiated.
  • The Detroit Water and Sewage Department does not have a deficit. Why then is this necessary? This contract also does not lower water or sewage rates for customers.
  • Does EMA have experience with a water and sewage system this large? Their current customer list consists of systems much smaller than Detroit’s. Detroit’s system is within the top three in size in the nation.
  • This type of contract does not provide any transparency to the work that will be done. EMA plans to hire sub—contractors to perform the work which would be outside the jurisdiction of the water board and city council.
  • Hiring a company from outside the city of Detroit and outside the state of Michigan will transfer jobs away from where they are needed the most. This arrangement sends money outside of Detroit and increases the city’s financial problems. Just how many out of state companies will seek or obtain contracts with the city or any of its revenue generating departments?

 

For these reasons this contract should be rejected by the Detroit City Council. This is bad for the city and bad for the customers of the water and sewage department.

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