The man who erased Ecorse’s $6 million debt and is whacking Hamtramck’s $3 million deficit says he has some advice for Detroit: privatize, privatize, privatize.
Louis H. Schimmel, emergency financial manager of Hamtramck, is a crusader for Gov. John Engler’s arch-conservative Mackinac Center for Public Policy. He says that as Detroit grapples with a projected $40 million deficit, its leaders ought to reduce the size of government.
“Detroit’s creditworthiness is all right,” says Schimmel, an expert on local government finance in Michigan. “But otherwise, its problems are horrendous.
“You pay a lot of taxes down there and don’t get much in services. You can’t have four people doing the job of one person.”
The only services Schimmel thinks shouldn’t be privatized are the police and fire departments.
Schimmel says he believes current Mayor Dennis Archer was destined to fail from the moment he announced he would not privatize city services.
“Detroit’s problem is that straight, blue-collar union mentality. There’s no balance. It’s all lopsided. You’re stuck in your tracks for years.
“Especially in Detroit, you have to go after those unions. You have to go after them in order to make savings.”
Archer’s spokesman, Greg Bowens, says Schimmel’s statements are “a bunch of gratuitous bullshit.”
“Nobody asked him,” Bowens said. “Opinions are like you-know-what. Everyone has one. The mayor’s stand on privatization is that privatization for the sake of privatization makes no sense.”
Bowens said he’s not surprised that Schimmel is a board member of the Mackinac Center.
“Whenever one of those guys gets an opportunity to advance that rhetoric, they’ll do it.”
Nevertheless, Schimmel says if asked, he’d probably do the same things in Detroit that he did in Ecorse as a court-ordered receiver and that he’s doing in Hamtramck as the governor’s appointed emergency financial manager.
“Detroit is humongous. Its problems are out of sight. But the thought process would be identical. We would sit down with every union, restructure, eliminate fat and take care of problems. With whatever’s left, there’d be a heavy emphasis on contracting.”
Though Schimmel says he doesn’t think the state would ever take over Detroit, and that he wants to retire when he is finished balancing the books in Hamtramck, he probably wouldn’t be able to turn down the challenge if asked.
Here’s what he’d do, in his words:
1) “I look at where all the money’s being spent. I know the unions have to be hit up front. I know there are people on staff who aren’t working.” That’s when layoffs, buyouts, early retirement packages and “whatever works” are employed.
2) Get competent people in the positions left.
3) “Usually, the union contracts are all out of whack. So you get in there and restructure them.”
4) While all that’s going on, you “have a whole lot of financial mismanagement” that must be cleaned up with competent financial staff.
Schimmel’s advice to Mayor-elect Kwame Kilpatrick?
“Remember, you can’t get it all in one bite. That’s what the mayor and council (in Hamtramck) don’t understand. You can’t ever get the whole pie at once. Get 80 percent, and then get more of what you want later.”Lisa M. Collins is a Metro Times staff writer. E-mail [email protected]