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Mayor's last-ditch effort to save Detroit would privatize 88,000 streetlights

Detroit Mayor Dave Bing asked for deep cuts and concessions from unions and city officials to stave off a state takeover. Privatizing streetlights and buses is one part of his plan. 

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Almost 20 percent of Detroit’s 88,000 lights do not work; in some neighborhoods 50 percent of the lights are broken. Lighting costs the city nearly $11 million each year. About $300 million in new infrastructure and maintenance is needed to overhaul the lights.

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Then there are the buses, which Bing said cost taxpayers almost $100 million each year. Outsourcing management of the city’s transportation department requires city council approval by Dec. 1.

Bing’s plan to outsource the services is the equivalent of a “Hail Mary” pass in football, says Mark Skidmore, another economist at Michigan State University. But privatization could potentially “get some efficiencies for the city and offload the expense.”

A more reliable approach to generating money would be to get foreclosed property back in private hands. “Because of abatement and tax foreclosures, there are vast chunks of the city that just aren’t making the same level of tax contribution,” he says.

Privatization is a murky option because city councils can be pressured to sign deals that prove detrimental in the long run, says Evan McKenzie, a political scientist at the University of Illinois at Chicago.

“Inevitably the details are buried, and the details are everything,” Professor McKenzie says.

He points to the deal former Chicago Mayor Richard M. Daley made with Morgan Stanley to sell off the city’s 36,000 parking meters. The city council was given little time to review the contract, which promised the city an immediate payment of $1.15 billion in exchange for owning and operating the parking meters until 2083.

It was only in the deal’s wake that the public learned the meters were grossly undervalued. Today, the city does not benefit from or control the continued rate hikes imposed by Morgan Stanley, and the situation is considered one of the greatest blunders of Mr. Daley’s legacy.

McKenzie warns that Detroit should learn the lesson from Chicago and “not grasp at straws.” “The history of these short-term fixes is very dismal,” he says. “If you privatize a previous public function, people no longer have political control over it. Then you have a monopoly.”

RECOMMENDED: Retooling the Motor City: Can Detroit save itself?

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