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Dustin Dwyer · Detroit Has A Consent Agreement. What’s Next?
April 6th, 2012
Spirit of Detroit. Credit: flickr user Urban Adventures.
After weeks of debate and sometimes raucous dissent, leaders in Detroit and Lansing finally signed off on a financial stability agreement for the city yesterday.
You can read the full agreement here. But as important as the agreement is, it doesn’t actually solve any of Detroit’s pressing financial problems. It merely lays out the structure and the powers of the new group that will.
So today is when the real work begins.
The Detroit Free Press reports today that the first step in the process is to hire 11 people. Mayor Dave Bing is in charge of finding the first two:
Mayor Dave Bing now has six days to create the positions of the city’s chief financial officer and program management director and 30 days after that to hire the people for the positions. Those holding the jobs must have experience in municipal finance and balancing the books of a government operation of at least $250 million. The candidate list and ultimate hires will have to be approved by Snyder and Bing.
The mayor, governor, state treasurer and city council will also each have a say about who goes on the nine-member financial advisory board that will oversee the city’s finances for the next few years.
Once the team is in place, the next big question is how to salvage Detroit’s finances. That’s where things may get ugly.
Sarah Cwiek, from partner station Michigan Radio, reports one of the biggest tasks will be to negotiate new contracts with the city’s unions:
They already agreed to give up historic concessions, only to have the state block final approval. Snyder says those agreements don’t go far enough.
Union leaders now say they’re in no mood to bargain. And they may have little recourse at this point but to strike.
Detroit’s new financial team may also face the difficult decision of whether to sell off city assets. The city is running an estimated deficit of more than $200 million, and Governor Rick Snyder says the state won’t offer up any cash to help fill the hole.
And there’s still a cloud of uncertainty hanging over the entire process, as legal challenges to the agreement work their way through the courts. There are challenges to the agreement itself, and challenges to Public Act 4, the state law that outlines what to do when a city faces a financial emergency. There are provisions in the agreement that say it’s still valid even if Public Act 4 is struck down. But a judge could just strike down those provisions.
Michigan Radio reports that Governor Snyder mostly dodged questions about the legal challenges during a media roundtable yesterday.
“I hope we can continue on this path, because I thought it was good, thoughtful legislation to begin with, and that we’re working in good faith to really make sure our communities are successful,” Snyder said.
Court challenge or not, the new team will have to work fast to fix Detroit’s problems. Estimates project the city will run out of cash completely by the end of June.
Dustin Dwyer · Midwest Memo: Detroit Assembles A Team, Indiana’s Accounting Errors And Chicago’s Tourism Offices
April 6th, 2012
Detroit looking for accountants Detroit has a deal to avoid state takeover. Now, the Detroit Free Press reports leaders have to pick the members of the new panel that will oversee the city’s finances.
Whoopsie An error by the state of Indiana shortchanged county governments by $206 billion over the last year, according to the Indianapolis Star. The paper says it’s the second budget error announced by the state in the last four months. The two mistakes amount to half a billion dollars in accounting miscalculations.
Poised to strike Partner station WBEZ reports teachers at more than 150 Chicago schools are ready to go on strike, if contract negotiations with the Mayor’s office fail. Mayor Emanuel is pushing for a longer school day, a new calender and new teacher evaluations.
Appealing to tourists The city of Chicago will open new tourism offices in Brazil, Germany and Japan this year, according to the Chicago Tribune. Last year, the city launched tourism offices in London, Toronto and Mexico City.
It can happen anywhere WKSU found new oil and gas drilling happening in some unexpected places in Ohio. One of the sites for a new “fracking” operation in the state is right under a school.
Dustin Dwyer · Hype Videos To Get You Ready For Opening Day
April 5th, 2012
The folks at Funny or Die know it. Baseball can bring out the competitiveness in Midwesterners. We may have our disagreements – Cubs or Sox, Tigers or Tribe, Twins or Brewers – but no matter who you cheer for in the Midwest, chances are your local economy picks up just a little this time of year.
Major League Baseball’s Opening Day might not be the most productive afternoon in the office. But no one can deny the economic effects of the baseball season. Last year, we wrote about how our Midwest cities buzz on Opening Day.
As the season goes on, the economic ripple effects from baseball can grow or wane, depending on, say, how Justin Verlander pitches. There’s also the possibility this year that Detroit will get an extra economic boost from Prince Fielder, and Milwaukee will lose out. And if any of our Midwest teams make it to the playoffs, that’ll only make the cash registers sing for longer.
If the economic benefits aren’t enough to get you excited about opening day, here are some videos that might:
Are you ready to Go Get ‘Em Tigers?
Or do you have Indian Fever?
Wrong diagnosis? How about Brewer Fever?
No? Maybe you just want to see the 1991 Twins dancing.
Dustin Dwyer · Midwest Memo: Detroit Has A Deal, Chicago Has Crippling Debt And Ohio Has Bulldozers
April 5th, 2012
Detroit’s deal Last night, the Detroit City Council voted to approve a consent agreement with the state to avoid takeover by an emergency manager. That means, as long as the governor signs the deal as expected and the courts don’t strike the deal down, Detroit finally has the first step in a plan to avoid bankruptcy. Partner station Michigan Radio reports on what it all means.
Chicago’s debt problem The Chicago Sun-Times went looking for reasons why Chicago would turn to private partnerships to fund its new multi-billion dollar plan to rebuild infrastructure. One major reason: the city’s staggering debt. Chicago can’t take out any more bonds to pay for improvements because the city spends almost 23 percent of its annual budget paying off the $7.3 billion in debt it already has.
Illinois’ turn Illinois is getting into the fracking game. Crain’s Chicago Business says the state could see a natural gas-drilling “boomlet” as companies explore southern Illinois for possible drilling.
Bulldozing blitz Partner station WCPN Ideastream had a story on NPR’s Morning Edition today that looks at the effort to tear down vacant houses in Ohio. The state set aside $75 million from its share of the $25 billion nationwide mortgage fraud settlement to pay for demolitions.
No more coal ash The Ludington Daily News reports the city’s historic car ferry has received a grant to convert its fuel source. Without the grant, the coal powered ferry would have been forced to shut down by the EPA. The historic vessel dumps about 500 tons of coal ash into Lake Michigan every year.
#goodnewsforDetroit Twitter says it will open a new office in Detroit. Michigan Radio’s Jennifer Guerra reported the news in tweet form. You have to hear it.
CoolCleveland Blog » biztech · VIDEO: Terry Stewart & Rock Hall Walk of Fame
April 4th, 2012
Posted in BizTechCivic AffairsEducationHotMusic: PopularNewsPreviewShopLOCALThomas MulreadyTravelVideo
Another http://www.CoolCleveland.com video exclusive. In this exclusive video interview, Cool Cleveland’s Thomas Mulready talks with Rock and Roll Hall of Fame Executive Director Terry Stewart at the Kick Off of the 2012 Rock Hall Induction week, which featured the unveiling of the Rock Hall’s Walk of Fame, a series of sidewalk plaques honoring Rock Hall inductees. Stewart [...]
Posted in BizTechCivic AffairsMusic: PopularNewsPreviewThomas Mulready
Rock Hall’s Walk of Fame Unveiled After many years of planning and preparation, Cleveland has what Hollywood has, but maybe even a little cooler. The Rock and Roll Hall of Fame’s Walk of Fame was inaugurated today as part of the kick off of the 11 days of the 2012 Rock Hall Induction ceremony. The first dozen cool [...]CoolCleveland Blog » biztech · VIDEO EXCLUSIVE: Mayor Frank Jackson at Rock Hall 2012 Induction Kick Off
April 4th, 2012
Posted in BizTechCivic AffairsCultureEducationMusic: PopularNewsOpeningPreviewShopLOCALThomas MulreadyVideo
In this exclusive video interview, Cool Cleveland’s Thomas Mulready talks with Cleveland Mayor Frank Jackson at the Kick Off of the 2012 Rock Hall Induction week, which featured the unveiling of the Rock Hall’s Walk of Fame, a series of sidewalk plaques honoring Rock Hall inductees. Jackson speaks bluntly, as he [...]Dustin Dwyer · Your Move, Creep: The RoboCop Statue Will Rise In Detroit
April 4th, 2012
Dead or alive, you're coming with RoboCop. Credit: MGM
The RoboCop statue is definitely happening in Detroit.
That’s the update today from the Detroit News. For those who haven’t been following along, last year, a Twitter user in Massachusetts jokingly tweeted to Detroit Mayor Dave Bing that the city should erect a statue in honor of RoboCop, the cyborg public servant featured in the 1987 film based in Detroit. The mayor dryly responded that there were no plans for a statue, and suddenly everyone became interested.
One Detroiter set up an account on Kickstarter to raise money for the statue. Less than two months after that original tweet, $67,436 was raised.
Along the way, there has been controversy. Some don’t like how the RoboCop films portrayed Detroit – as a post-apocalyptic wasteland, run by an evil corporation. Some didn’t like the idea that people would spend money on a statue to honor a movie character, when so many other worthy projects go unfunded in the city.
RoboCop himself (actor Peter Weller) weighed in on Funny or Die:
Then, the idea grew beyond just the RoboCop statue. To take advantage of the attention surrounding the statue idea, local foodbank Forgotten Harvest launched RoboCharity. RoboCop (Peter Weller) made a video to support the charity. And, later this month, Forgotten Harvest will host a fundraiser, cosponsored by Funny or Die.
As for the statue itself, the Detroit News reports the original RoboCop costume is being scanned now, and the the resulting mold will be cast into a metal sculpture by Detroit’s own Venus Bronze Works.
According to the News:
“The statue’s definitely coming,” said Jerry Paffendorf, who spearheaded the controversial 2011 campaign to raise money and find a home in Detroit for the statue.
“The only thing that’s up in the air is the timeline and where it’s going to go.”
One possibility is to put the statue outside Imagination Station in Detroit, opposite the Michigan Central train depot.
When the RoboCop statue does rise in Detroit, will you go see it?
Dustin Dwyer · Midwest Memo: Still No Deal In Detroit, Indiana’s Welfare Woes And Ohio Gas Stats
April 4th, 2012
Still no deal Partner station Michigan Radio reports the Detroit City Council decided not to vote last night on a proposed consent agreement with the state to resolve the city’s financial crisis. A judge has blocked any agreement from going forward. Michigan governor Rick Snyder is appealing that decision. If no deal is reached by the end of the day tomorrow, Detroit will likely face a takeover by an emergency manager.
Indiana in court The state of Indiana is facing off in court with IBM over who was at fault when a $1.4 billion deal to handle the state’s welfare caseload went bad. IBM says the state broke off the deal because of budget problems. A lawyer for the state says IBM failed to meet its obligations, according to the Associated Press. The Department of Labor lists Indiana as the worst state in the nation when it comes to improper payments for welfare assistance. The DoL says Indiana has a 44% improper payment rate. The state disputes that number.
Groupon’s bad week It’s been a rough couple of days for Chicago-based Groupon. The coupon website was forced to revise its previous financial statements, and admit it has “material weakness” in its accounting practices. The SEC is reportedly looking into the problems. And now, the Chicago Tribune says a shareholder has filed a class action lawsuit.
A big fat check Whirlpool will write the state of Indiana an $800,000 check, after deciding to move jobs out of the state.
2.6 billion cubic feet That’s how much natural gas Chesapeake Energy pumped from Ohio shale formations last year, according to BusinessWeek.
Kate Davidson · Measuring The Costs And Benefits Of Retraining
April 4th, 2012
Todd Debenedet is starting over. He's retraining in Jackson, Mich.
Measuring the success of retraining programs used to be straightforward. You just looked at how many people got better paying jobs. Now the emphasis is shifting from how job seekers benefit to how taxpayers benefit too. That’s because some federal funds for workforce development are shrinking, and local agencies have to do more to make their case.
In the Midwest, we hear a lot about retraining. A lot of the money for retraining and other job services comes from the federal government, through the states, to local programs like this one in Jackson, Michigan.
Sparks fly as Ron Waldon grinds the surface off a steel block. Soon he’ll learn to be a CNC operator– someone who can program computerized milling machines. It’s a hot skill for a guy who’s had a rough few years.
Ron Waldon says he's going with the flow and becoming a CNC operator.
“Aw man, ups and downs. I lost the job, lost the house,” he says.
Temporary work here and there. Nothing steady.
“Suddenly, you’re just not part of society anymore without a job,” says Waldon. “I know I’m not the only one who suffers from the fact that you lose that independence or that self-worth, I guess.”
Todd Debenedet is also retraining.
“You can only mow the lawn so many times, you can only walk the dog so much,” he says. “And getting back to work and being, like he said, a productive society member would be very important.”
Personally important, for sure. But what is the economic impact for the public? There’s a big debate right now about how effective workforce development programs are, how many there should be, and how involved government should get with budgets so tight. Which all led to a near-death experience for the main source of workforce development funding last year.
Ron Painter is CEO of the National Association of Workforce Boards.
“In the last budget cycle that was introduced, the House Republicans zeroed out the Workforce Investment Act. So that was a pretty clear signal that we had a lot of explaining to do,” he says.
It was a wake-up call for Christine Quinn, too.
“Well, after my stomach settled a little bit, I actually started saying, ‘What do we need to do?’” she says.
Quinn is president of South Central Michigan Works!, where 100 thousand people sought job services last year, from just three counties. Their Workforce Investment Act (WIA) funding survived, but not unscathed. And Quinn decided the old performance metrics – employment, wages, job retention — weren’t enough by themselves. She wanted a tool to show whether benefits to the public outweigh costs to the taxpayer.
“Somebody wants to see what that dollar value is,” she says. “It’s not necessarily touchy-feely, it’s not the fact that you see somebody get a job who has who has been struggling for so long, which is important. But we also have to have the hard data too.”
South Central Michigan Works! just released a benefit-cost analysis of their programs for 2009. It says every public dollar spent should generate $1.22 in benefits over a decade.
Christine Quinn is poised to take over as director of Michigan’s overarching Workforce Development Agency. She says she’ll continue to emphasize the importance of data on the state level.
The state of Ohio may go even further. According to workforce development officials there, Ohio’s WIA funding has been cut almost in half over the last five years, a loss of about $80 million. (That’s not including a large, temporary influx of cash from the stimulus package.)
Ohio recently completed a pilot project measuring return on investment for part of its dislocated worker program. This kind of study analyzes not just wages earned and program costs, but also wages sacrificed while participating in the program and reduction in unemployment compensation afterwards. Results from the small pilot showed that participants recouped their investment after two years and taxpayers after five years. Development officials hope to expand the analysis into a longitudinal study.
When it comes to workforce development, return on investment studies can be difficult. Take it from Kevin Hollenbeck who’s done a bunch of them, including for Washington state.
“If I were administrator of the day, I would not do it by return on investment,” he says. “I understand I’m kindof shooting myself in the foot.”
Hollenbeck is vice president and senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo. He says measuring return on investment involves a lot of assumptions about what would’ve happened to people if they had never encountered these programs. Like how much money they would have earned.
That means analysts and policymakers could end up comparing different things. He’d like to see more research on what kind of assistance really helps.
“In my work, we more or less treated the program like a black box,” he says. “People came in, something happened, and then there was a result. And the ‘something happened,’ we really haven’t done a lot of research on what’s best for whom.”
As for outcomes, Kevin Hollenbeck says a rigorous, consistent measurement of plain old earnings is the way to go.
ADDITIONAL INFORMATION:
The Department of Labor tracks how much money is spent on workforce development through the Workforce Investment Act. You can see it here.
The U.S. Government Accountability Office has a newish report on innovative collaborations between businesses and local workforce boards.
The GAO also looked at the range of federal employment and training programs out there, which got a temporary boost from stimulus spending.
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