State of City Address - March 11, 2002

STATE OF THE CITY

Wednesday, March 13, 2002

Good evening.

I am here to report to you on the state of our city.

I'm going to introduce you tonight to some key members of my management team. I'm going to outline for you some of the problems that have confronted us as we took office. And I'm going to tell you about our plans for the future of Detroit.

Only 72 days ago I became Detroit's 60th mayor. The intervening days, while a relatively brief period, have been eventful, filled with highlights and with tragedy.

We've been able to help some residents, such as Marles Sciacca, who belongs to a small condominium association in the Canfield Historic District. Her association was hit with an $11,000 water bill last September after a new water meter was installed. She emailed me regarding her problem, and we were able to get it resolved.

I've had to discharge employees who were involved in totally unacceptable behavior.

But thank God there are many, more dedicated, city employees who are ready to go above and beyond to help someone else. I'm talking about workers like Marvin Woods and Don Porter, two night shift employees in the Coleman A. Young Municipal Center. On the night of January 7th, when an elevator became stuck between floors after hours, they spent two hours assisting two individuals who were caught in the elevator, helping to eventually free them.

The lowest point was the night of February 12th, when Police Chief Jerry Oliver called to tell me that Police Officer Michael Scanlon had been killed in what started as a routine traffic stop. It was a reminder of the dangers the brave men and women of our Detroit Police Department face every day as they go out to protect us.

Officer Scanlon's widow, Leah, is here with us tonight. I ask you to join me in letting her know that she remains in our prayers and that this community continues to wrap our arms around her and her children as they deal with the profound loss they have suffered.

As I have assumed the office of Mayor, much has been made of who's on our team, of who's in charge and who's on our staff.

I want you to meet some of the key people on my leadership team tonight. Many of you already have heard about my chief of staff, Christine Beatty; my chief administrative officer, Derrick Miller; and my Chief of Police, Jerry Oliver. But there are some other key members of the team who have not had as much attention.

For instance, our Chief Information Officer, Dave Rayford. Dave, a lifetime Detroiter, had a long, distinguished career at Comerica Bank, and before that Manufacturers Bank, where he helped build their entire technology infrastructure. Dave understands innovation, new concepts and how to streamline processes. I have lured him out of retirement into this administration because making government more friendly to people is a serious issue and technology has to drive that process.

Our Corporation Counsel is Ruth Carter, another lifelong Detroiter. Ruth spent 13 years as a Wayne County prosecutor and she has strong litigation experience. With more than 1,400 open lawsuits pending against the City of Detroit, we need a corporation counsel that understands litigation. In recent years we've spent more than $123 million in legal settlements alone. I didn't need a corporation counsel that wanted to be a development person. I needed someone who could manage the department, who could evaluate every case, who will know when to settle and when to try the case. That is why Ruth Carter is on my team.

Our Chief Financial Officer is Sean Werdlow, another lifelong Detroiter. Sean was treasurer at the Detroit Medical Center before we recruited him to the city. He has previous experience as a bond manager at the city. And after traveling to Wall Street with Sean, I know that he is one of the best financial minds in this country.

Our Chief Development Officer is Walt Watkins, who also has come out of retirement to serve Detroit. Walt was president of Bank One of Michigan when he retired in October 2000 after more than 30 years in the banking business. The knowledge and experience he accumulated and the strong relationships that he built in the world of finance will be extremely important as we work to rebuild Detroit.

Our Director of Parks and Recreation is Hurley Coleman. Hurley is a trained professional with a degree in parks and recreation management and 25 years experience in the field. His accomplishments while heading parks and recreation for Wayne County include the creation of Chandler Park Water Park, building a golf course in Inkster, and recreating Hines Drive.

For those who have been concerned about the relative youth of this administration, I would point out that Walt, Dave and Hurley all have gray hair - and not a great deal of hair, either.

I also want to acknowledge the outstanding work that has been done by individuals who have been in the departments for a long time that we've asked to step up to the mantle of leadership. I'm talking about people like Wendy Broden, who is Interim Director of Human Resources, and Tyrone Scott, Interim Deputy Commissioner of the Fire Department. Both of them are fine examples of the great people who were working within their respective departments prior to our taking office. I think great things are on the horizon for both of them.

I want all Kilpatrick appointees to please stand. Let's give them all a hand.

You can see our team is coming together. Much has been made of the pace at which we've been filling key posts. We've heard about other people coming into office with their entire team together on January first. That's good for some people. But it's not good unless you have the right team.

If we had been required to fill these positions on January first, we wouldn't have a Walt Watkins or Dave Rayford on board. I think you and I agree that both were worth waiting for.

The state of our city tonight is that Detroit is poised for greatness. But there are some very serious problems that we have to work through, first. I want to talk to you about a few of those problems.

The most immediate problem is our budget deficit. When we took office, the left over deficit from the fiscal year that ended June 30, 2001 was $25 million, which all but wiped out the city's budget stabilization fund. On top of that, the deficit we inherited when we walked in the door for this coming June 30, is $75 million. And the deficit for the coming fiscal year starting July 1 is $94 million, if we do nothing.

But we are doing a number of things as I prepare to submit my budget to City Council April 12.

My administration has instituted a strong budget reduction plan that continues a 5 percent cut across the board for all departments, with more cuts for some departments. We've also put in place a process designed to reduce the number of contracts the city issues for outside services and the dollar amounts of some contracts already in place.

Earlier this week we announced a property tax amnesty plan for the month of April. During April, anyone in arrears on their property taxes can pay them without penalty. At the end of April, the city will then step up our enforcement and collection of delinquent property taxes, including instituting legal action and turning past due accounts over to a collection agency.

The city currently is owed some $95 million in delinquent property taxes. If all the property taxes that are currently delinquent had been paid, we would not be facing the deficit situation we are now forced to deal with.

In addition, I have created a capital committee within my cabinet to review all substantial contracts to make sure they are necessary. A number of contractors have already been called in to talk about what they do for the citizens of Detroit and what type of services they provide. One of the first places where we see we can make an immediate impact on this budget is with the enormous amount of contracts that have been issued. This committee will look at all those contracts and decide which ones are necessary and which are not.

I also have appointed a separate committee of business and labor leaders to look for ways to reduce expenses, eliminate redundant processes and streamline operations that are ineffective and inefficient. They are to complete their work by the end of May.

Another area of concern is our unfinished labor contracts. This is the first administration in the history of the city to come into office in the middle of contract negotiations. The negotiations have dragged on far longer than usual for contracts that expired last June 30, some even before that.

I met in February with the union leadership and asked them to allow this administration to have a 60-day period from the date of February 11 to put our labor relations team together before we move forward. I appreciate all those unions for stepping forward, particularly AFSCME, the city's largest union under the leadership of Al Garrett, to talk about a variety of issues that are of mutual concern.

We're not running away. We're not stalling. We want to come to the table prepared. We want to know what went on in negotiations 10 years ago, five years ago. We want to know how we got to where we are today and how do we move forward.

Then we will assemble a team that will negotiate these contracts so that organized labor understands that we are serious about having a good quality of work life, a good environment in the work place, and the best pay levels the city can afford.

The fact is there has been a tremendous problem in the fiscal and operational management of the City of Detroit. Let me tell you about a few of the examples.

Many of you have heard about the Detroit Resource Management System, known as the "Dreams" system. Many city workers call it the nightmare system.

In 1995, the city decided to spend $50 million on a new computer system to wire the city's financial operations and billing system.

To date, more than $120 million has been spent on "Dreams." We still don't have full integration of a system. In many areas of implementation we are no further along today after spending $120 million than we were in 1996. We also don't know if we'll be able to use this system five years from now or whether it can be fixed at all.

One of the proposed improvements for the DRMS system is a $14-$16 million fix to finally complete its ability to handle the city's payroll process.
 

One of the most serious problem areas in the city has been handling payrolls. Tonight, there are more than 22,000 pay adjustments to which city employees are entitled that have not been processed and put into effect. That means 22,000 instances in which people have earned a raise or put in overtime for which they have not been paid. We've literally found boxes of forms with raises that were never processed. Some people have been waiting as long as three years to see a raise reflected in their paycheck. That is inexcusable.

Sean Werdlow and Dave Rayford have formed a team that will give us a report regarding whether we should spend more on DRMS or whether we should count the $120 million as a loss and stop throwing good money after bad.

For the moment, we're totally tied to a system that is not serving us very well now and may well not serve us at all in the future.

Another serious problem area has involved economic development projects.

For example, on the east side of Detroit, we have invested as a city $38 million in a project that many of you know as Graimark. Yet to date, not one shovel has been put in the ground to build a home. Hundreds of people have been displaced by this project, which was put in place without consultation with the surrounding community. There are still no commitments for proposed commercial strips on Jefferson.

Our biggest economic development problem involves our newest industry, casinos.

The previous administration took it upon itself to attempt to dictate a location for permanent casinos - the riverfront just east of downtown.

Administration officials told the City Council the land needed could be purchased for less than $250 million. The casinos loaned the City of Detroit $150 million to buy property on the riverfront. More than $143 million has been spent to acquire about one fourth of the land that was needed, there are no casinos on the riverfront, and we owe the casinos $150 million.

A process that should have taken months has taken years, has poorly served the City of Detroit by building temporary casinos, not permanent sites, has produced windfall profits for lawyers and has not yet yielded certainty or finality.

Instead of receiving the full benefits of casinos and what they bring in terms of tax revenues, development and jobs in the shortest possible time, we have three temporary casinos and a debt of $150 million.

We have been negotiating with the casinos over the last two months to come up with a plan for permanent sites. As we have done that, we have told them finding a permanent site is their responsibility, not ours, but that the site should fit into the overall structure and scheme of development downtown.

We remain hopeful that we can meet our March 31 target date of reaching a final agreement with all three casinos for permanent facilities.

The final problem area I want to discuss with you is our police department.

No department is more critical to the success of a city.

We can't rebuild our city unless our police department works.

That is why a tremendous amount of focus has been put on the Detroit Police Department.

We are all familiar with the allegations of excessive force that have been made. We know the events that led up to the ongoing Department of Justice investigation. We know of the low morale and the allegations of favoritism that have plagued our police department.

That is why the first major appointment I made was our new police chief - Jerry Oliver.

I was determined to bring in a chief who is known and respected in the international law enforcement community. Chief Oliver is known and respected across this country in law enforcement circles. As a matter of fact, he is one of 25 chiefs across America recently picked to go to Israel to study terrorism on behalf of our country in an effort to increase our homeland defense.

I told the chief I want an agile, attentive, accountable, accessible and problem-solving department. I have mandated him to do the following things:

1. Streamline and reorganize the police department.

2. Raise the police officer to citizen ratio to national standards. Right now, we are below the national average. 3. Make our police department accredited by the national Commission on Accreditation for Law Enforcement Agencies standards.

4. Increase the percentage of our sworn officers who respond to service calls from 50 percent to 70 percent. That means now, only 50 percent of the officers in uniform answer calls. We need that to be 70 percent so that when you call 911 more officers will be available to answer the call.

5. Reduce the violent crime index in collaboration with communities and other policing agencies.

6. Raise police salaries. I know we are in a budget deficit. I know money is tight. But we are one of the lowest paid urban departments in the country and we have to figure out a way to get our police officers a raise. That goes for the rest of our city work force as well.

7. Look at our recruitment standards. Are they adequate? Is 18 really old enough to be a Detroit police officer? Is a GED by itself enough education for a Detroit police officer? We need to look at how we recruit officers and how we do psychological evaluations.

8. Establish performance measurements to determine promotions. We need to use different measurements other than favoritism to judge who gets promotions.

9. Use state and national standards for in-service training. Currently we don't.

Clearly, there are some very serious issues surrounding our police department. Let us be clear, the lack of leadership in the past has produced the department we have today.

This community should be backing our chief all the way as he works to upgrade our police department to become the highly efficient, effective organization that the vast majority of our officers want it to be. We should not be focused on a lapel button.

I have been visiting the precincts and I know what fine professionals and fine people the overwhelming majority of our police officers are. This chief is making changes the overwhelming majority of them welcome.

I'm asking the collective leadership of the City of Detroit, the City Council, the media, the community, unions, the business community, everyone, let's come together and support this chief and what is he trying to do in service to this community.

During the recently completed campaign, we talked about the fact that jobs and people have been leaving Detroit in a steady exodus for the past 50 years. The most recent census count dropped us below one million people - about half of what we had 50 years ago and fewer than we had as far back as 1920.

But I believe, in spite of the problems that we face, that this city is poised for greatness. Last week I participated in two events that were very symbolic of our bright future.

The first was a week ago Monday, when I watched General Motors start to knock down the berms at the Renaissance Center. Those berms have walled off the center from the rest of our city since it was built. Their removal symbolizes General Motors' commitment to Detroit's future and the importance of their renovations to the center.

Then last Thursday, I watched with Compuware CEO and Chairman Peter Karmanos as steelworkers topped off the new $400 million Compuware world headquarters being built on the site of the old Hudson's building. It would be hard to overestimate the importance of the commitment this global information technology company has made to our future.

That is one reason I am so excited that Walt Watkins has agreed to serve as our Chief Development Officer. Walt comes in with a strong neighborhood focus. He understands we have to have signature projects. We have to rebuild downtown.

But in order for our community to be a thriving community that can market itself to the world we have to have thriving neighborhoods. So he will be working closely with the CDCs, neighborhoods associations and communities to assure they are at the table at the front end of the planning process and not the back end.

The first time you hear about a development shouldn't be when a bulldozer shows up.

We said in our campaign we wanted to get our fair share out of Lansing. We've already started to move on that by getting more than $20 million since January 2nd out of Lansing.

Detroit has a Congresswoman who is one of 57 members of the House who serve on Appropriations and who determine where the $2 trillion federal budget is spent. I happen to have a very good relationship with her. We've already set up a workshop with our department directors working closely with her office to figure out how we maximize resources out of Washington. This is something that hasn't happened in the previous administration, but it will happen in this one.

Our status as a global city was reinforced earlier this year when we teamed up with Gov. John Engler and Energy Secretary Spencer Abraham to secure the G8 Energy Conference for Detroit May 1-4. The world's energy ministers will be meeting here to discuss an issue that is absolutely pivotal to the future of Detroit.

One of the issues that we expect will be discussed is the development of fuel cell technology, a technology that holds great promise for the auto industry and others. We are committed to making sure that Detroit is a center of fuel cell research.

In the longer range, we are looking forward to hosting the 2006 Super Bowl right here in Detroit.

Finally, I want to point out the three symbols hanging behind me on the stage here tonight. You may have noticed them. They are the new symbols of our "Kids, Cops, Clean" program - the three initial priorities of the Kilpatrick Administration. I've already dealt at length with the Police Department - the "Cops" portion of the program.

The "Kids" program is our "Mayor's Time" program, designed for young people between the hours of 3 p.m. and 8 p.m. It has begun to take shape as we prepare to put it in place at the beginning of school next fall. As the year progresses, we will be describing in detail the opportunities for involvement on the part of the business community as well as other members of our community.

The third part of the program - "Clean" - was kicked off at the end of January when we launched an accelerated demolition program. Thus far, we have knocked down more than 800 abandoned buildings this year. When spring arrives, we will launch our city-wide cleanup. The cleanup is important because if a city is going to have pride, it has to be clean.

As I said at the beginning of my remarks, I see Detroit as a city poised for greatness. I see tremendous potential here if we can put aside whatever differences we might have on the surface and work together.

If we pull together in a true sense of community, we can do it. If we don't, then we have only ourselves to blame.

Our choice is community or chaos. The question before us is "What is it going to be?"

The task before us is a huge task. But it is one well worth taking up.

As I was preparing my remarks for tonight, I came across a quotation from President John F. Kennedy.

He said, "All this will not be finished in the first one hundred days. Nor will it be finished in the first one thousand days, nor in the life of this administration, nor even perhaps in our lifetime on this planet. But let us begin."

Detroit, this administration has made the decision to begin.

Right here. Right now.