The rest of the city—the 136 sq miles surrounding the 7-sq-mile central core—also needs attention, according to Orr. Detroit has about 78,000 vacant structures, of which 38,000 are considered dangerous, he noted in a June report to creditors.
About 5,000 have been demolished and another 5,000 are set for takedown by Dec. 31. Demolition was set to start on Aug. 26, says city spokesman Bill Nowling. The $25,000-per-structure cost for clearing, disposal and maintenance is being paid from the city's allotment of a $100-million federal grant to the state.
Detroit has an aging electric grid that powers its oft-cited burned-out streetlights. Converting the city's power agency to an authority able to issue debt is now under way. The entity will revamp the street-lighting pattern, reducing the number of lights by almost half, to about 46,000, to better serve populated areas.
The authority is expected to deliver a strategic plan by the end of August that will prioritize where and how the lights will be replaced, with work set to start in September, says Nowling. The plan also would get Detroit out of the electricity business, in which it is only a reseller.
Liquid Assets
Also set for revamping is the Detroit Water and Sewerage Dept., one of the largest U.S. water-wastewater utilities, which serves a 1,079-sq-mile metropolitan area. The agency has operated under federal oversight since 1977 because of Clean Water Act violations.
A court-ordered committee has recommended the creation of an autonomous metro water-sewer authority to run operations and pay the city for use of its water and wastewater treatment plants. That is still a possibility, Nowling says. The system still needs about $1.5 billion in previously deferred capital improvements over the next five years.
Detroit's water and wastewater operations account for about $5.8 billion of the city's debt, but annual net revenue is currently enough to cover the debts' principal and interest payments to bondholders and the state, according to Orr. The emergency manager also notes that some services or internally run responsibilities might be privatized, and a department-by-department review is ongoing.
The city already has released a proposal request for city trash collection. "Other services could also be privatized," Nowling says. Privatization should be on a case-by-case basis, according to Gregory Minchak, a spokesman for the National League of Cities. "Each service needs to be assessed on its own merits," including current funding, service and administrative needs, and the complexity of delivery, he points out.
Minchak warns that privatization is "very difficult" under the city charter, so it is a topic for future debate.
