29 March 2013

Editorial: Judge's leadership moved Detroit Water and Sewerage Department out of federal control

Story originally appeared on Freep.

The problems at the Detroit Water and Sewerage Department were never a mystery.

In 1977, when the U.S. Environmental Protection Agency’s first alleged that the department’s Wastewater Treatment Plant was discharging unlawful amounts of “effluent,” no one disputed its claims; the department readily acknowledged the EPA’s finding that the plant had too few workers, trained those it did hire inadequately, and purchased critical equipment and supplies too slowly.

DWSD and the federal government settled the lawsuit with a consent decree designed to remedy the flaws in the system and bring the department into compliance with federal sewage treatment standards.

But that didn’t happen. The problems documented in the EPA lawsuit — and in six reports commissioned during the tenure of U.S. District Judge John Feikens, who oversaw the case from its inception until his 2010 retirement — weren’t fixable within the parameters of the Detroit City Charter and local ordinances.

This week U.S. District Judge Sean Cox, to whom the case was assigned after Feikens left the bench, declared the system largely in compliance with state and federal guidelines, and — more crucially — that it is expected to remain in compliance, because of changes to the way DWSD is run.

From the time Cox took up the consent decree, he made it clear that DWSD would not be his life’s work. (Feikens, in contrast, earned the nickname “sludge judge” for his lengthy oversight of the department.)

Feikens tried to make the system work more efficiently with “non-intrusive” measures, Cox wrote, including appointing successive mayors of Detroit “special administrators” of the water system, but he was ultimately unsuccessful.

(It’s worth noting that during Feikens’ oversight of the department, consultants were paid $4.4 million between 2002 and 2010, according to Oakland County court filings, and that one firm paid to vet DWSD contracts apparently was unable to identify the wide-ranging bid-rigging scheme of which former Detroit Mayor Kwame Kilpatrick and crony Bobby Ferguson were recently convicted.)

After the case landed on Cox’s docket, the judge ordered the city and the Board of Water Commissioners to develop recommendations to address the “root causes” of the system’s inability to operate within federal and state guidelines; in developing this report, Cox ordered, the city and the water commissioners need not be constrained by the Detroit City Charter, ordinances or any existing contracts.

And this, it seems, was the tipping point.

Three years later, DWSD has its own human resources department, and its purchasing is controlled by the Michigan Department of Environmental Quality. The system has had a permanent director since 2012, a post that had been vacant since 2008, and has a COO/Chief Compliance Officer.

While Cox freed the committee from the confines of the charter, ordinances and contracts, he also cautioned that changes that would override state or local laws should be “narrowly tailored,” and implemented only when local solutions don’t work.

As of Wednesday, Cox, at least, was satisfied that working outside the system had been the key to creating the ability for the system to reach, and sustain, compliance with federal requirements.

It’s an instructive model for the city of Detroit.

Much like DWSD, Detroit’s problems aren’t mysterious, documented in report after report: Too much debt, too much bureaucracy, outdated systems, a charter that makes streamlining all but impossible. Working within that system makes it difficult to effect permanent change. But like DWSD, the city now has an appointed official, in Emergency Manager Kevyn Orr, who is empowered to go outside local law to make necessary changes.

As evidenced by Cox’s ruling, the application of non-traditional solutions, when used judiciously, can bring about positive change.

Unionized workers reject UAW-GM bargaining proposal

Story originally appeared on Freep.

In an unusual case where the United Auto Workers union is bargaining as an employer, about 74 workers at the UAW-General Motors Center for Human Resources rejected the union’s latest contract proposal.

The staff workers include clerical, custodians, maintenance workers and professional staff, that provide safety training and legal services to UAW workers at dozens of GM factories and offices. Some of the center’s employees are represented by the Office and Professional Employees International Union. The UAW and GM jointly manage the center at the foot of Walker Street on the Detroit riverfront.

The employees have been working under the terms of their previous deal, which expired March 31, 2012, after rejecting the latest proposal Tuesday by a vote of 58 to 4.

Kevin Nix, lead negotiator for OPEIU Local 459, said his members have not authorized a strike. UAW-GM negotiators have not threatened to impose new working conditions.

But OPEIU has filed three Unfair Labor Practice complaints with the Federal Labor Relations Board during the bargaining process, Nix said. Specifically, the union alleged that the UAW-GM leaders failed to pay the OPEIU bargaining team, proposed to change workers’ health care plan and stopped bargaining at one point.

“Obviously in a world where GM is making billions of profit, we feel this contract should have been done by now,” Nix said.

A UAW spokeswoman did not respond to phone and email messages.

“The UAW-GM Center for Human Resources continues to have open and constructive dialogue with our OPEIU partners,” GM said in a statement. “We consider all information about the issues and topics discussed to be private matters between the negotiating parties.”

Nix said workers want guaranteed health care and retirement packages beyond 2016.

“What management has on the table right now is to guarantee health care and retirement just through the end of their proposed contract, which would be the end of 2016,” he said.

27 March 2013

Explore the Shores partnership makes universal splash in Manistee County

Story originally appeared on www.michigan.gov.

A unique collaboration of government agencies, non-profits and private interest groups has succeeded in making Manistee County a beacon for residents and visitors seeking access to Lake Michigan, as well as the county's many inland lakes and rivers.

Explore the Shores (ETS) is a program designed to connect people of all ages, needs and abilities with the county's plentiful water resources, fishing opportunities and other recreational pursuits tied to the water. In fact, by the year 2020, the folks at Explore the Shores are shooting to attract 1 million more people to Manistee County to enjoy a network of more than 50 fully accessible Explore the Shores destinations.

"It began with a countywide visioning project in 2006, the first ever for Manistee County," said Tim Ervin of the Alliance for Economic Success, one of the members of Explore the Shores' 22-group leadership team. "As the county attempted to establish blueprints for the future, one of the things that jumped out at us was that we were not doing a good job with our water resources."

To be sure, there are plenty of those resources to choose from: Manistee County boasts 276 miles of rivers and streams, a number of lakes - including three drowned river mouths - and 24 miles of Lake Michigan shoreline.

Getting from blueprint to that fully accessible reality was, and remains, a team effort.

The process of developing the ETS program involved some 700 people and took 16 months. Its completion coincided happily with a perfect funding opportunity: The Easter Seals organization was looking for places in non-urban environments to advance the cause of universal accessibility. Manistee County applied for and received a grant to incubate the project.

From the start, the concept has remained a constant. Just as the need for water is universal, Explore the Shores believes that access to water should be universal for everyone, too.

Many diverse organizations - from the National Association of the Physically Handicapped, to the Village of East Lake, to the Manistee Charter Boat Association - contribute to this mission. Because that broad perspective is partnered with a laser focus on boosting recreation accessibility county-wide, the growing network of Explore the Shores sites is incredibly inclusive.

"We solicit nominations for sites, places anyone might think would provide a great point of access," Ervin said. "We've got a real focus on fishing, but it could be anything - wildlife watching, swimming, anything.

"We go out and seek the funding to develop the sites. Since 2008, we've been successful in bringing close to $4 million to the county to develop about a dozen sites."

Development of the sites is coordinated by the Alliance for Economic Success and the Manistee County Community Foundation.

Every Explore the Shores site - ranging from barrier-free, floating fishing piers, to angler trails, to multipurpose areas accommodating fishing, swimming, picnicking and nature viewing - offers universal access to all facilities, a variety of recreation opportunities, and educational and interpretive signage that gives valuable information about the history and unique features of the site.

Mark Tonello, a fisheries biologist in the Department of Natural Resources' Cadillac office, is one of the folks representing the DNR on ETS leadership team. He plays a key role in determining the location and design of sites.

"I'm basically an advisor, helping identify areas that could use better fishing access and helping come up with ways to provide them," he said. "For example, we have two new fishing piers on Manistee Lake and a couple of handicap-accessible docks parallel to the river where anyone can go to fish."

Tonello works with Explore the Shores to ensure new sites will be situated in areas that will yield decent fishing opportunities. "You can go to Rainbow Bend, stand on the fishing platform, and catch steelhead," he said. "That's my role: to help identify the sites and what we should provide at those sites."

Tonello also contributed to the development of a new fishing/cleaning station at Manistee's popular 1st Street Beach, a renovation project anchored by $280,000 from the Michigan Natural Resources Trust Fund.

Tonello described his work with Explore the Shores as relatively easy and rewarding.

"They've been a real dream to work with," Tonello said of his ETS colleagues. "They've gone out of their way to improve everyone's access to those resources. They've made a mark and have absolutely changed fishing in that area, providing access and amenities that were not there before."

The Alliance for Economic Success' Ervin said Explore the Shores is a great example of a partnership among organizations that simply want to expand access to quality recreation opportunities to everyone.

"What makes the program so strong is that every agency involved can take credit for its success," he said. "Explore the Shores was selected by the U.S. Forest Service for its excellence in collaboration on developing natural resources. Three years ago, the National Association of the Physically Handicapped held its annual convention in Manistee, just to understand and become familiar with the program."

Despite all that, it's important to point out that Explore the Shores is still building steam.

Explore the Shores has plans to build a facility below the weir on the Little Manistee River, including a viewing platform, interpretive trails and a visitors' center, to help make it easier for people to learn about and enjoy the salmon and steelhead runs. The DNR Fisheries Division collects Coho salmon eggs - and many Chinook salmon eggs - for its hatchery program at the Little Manistee Weir.

The site is already popular with visitors, including the youngsters who participate in the DNR's Salmon in the Classroom school program. Ervin predicts the new facility, bolstered by $300,000 in support from the Michigan Natural Resources Trust Fund, will only increase the site's appeal.

"There are tons of people who come from all over the United States to see what's going on at the Little Manistee," Ervin said. "It's going to give people a lot of opportunity to see things they've never seen before."

And that's the aim: to successfully outfit Manistee County with a creative, inclusive mix of resources - like hard-surfaced, movable walkways - that invite universal access to the area's rich water, fishing and recreation opportunities.

"If you're using a wheelchair - or even just someone pushing a stroller - you can get down to the beach," Ervin said. "We had 14 people in wheelchairs (at the NAPH convention) who, for the first time in their life, felt Lake Michigan water."

Building on the area's natural resources and working toward that accessibility has resulted in another benefit. Ervin said Explore the Shores is turning out to be one of the most important economic development efforts ever in Manistee County.

"By the year 2020, we want to have at least a million visitors come to Manistee County to visit at least 50 Explore the Shore sites," he said.

Plenty of opportunities are already available to everyone. You can:

  • Fly-cast for trout at Spirit of the Woods on Bear Creek;
  • Drift-spawn for salmon and steelhead on the Manistee River; or
  • Bring the whole family to catch a mess of panfish at universally accessible piers Manistee Lake or Grebe Park on Lake Acadia.

With many more such accessibility enhancement projects on tap for 2013 and beyond, Ervin and the Explore the Shores team should be well on their way to meeting their 2020 goals for Manistee County.

26 March 2013

Michigan's coastal communities could lose millions because of low lake levels

Story originally appeared on Freep.
Michigan's coastal communities could lose millions of dollars this year, after water levels in Lakes Michigan and Huron hit record lows over the winter.
Whether via slip fees, shipping, commercial fishing, licenses, real estate or tourism, the state's $7-billion boating economy, which includes about 800,000 licensed boats and about 500,000 jobs, is bracing to take hits.
"We're wondering if we're even going to be in business next year," said Bob Wiltse, owner of Charity Island Excursions in Au Gres. Low water levels -- caused in part by climate change -- have made it difficult for his boats to dock on the Lake Huron island. "We're definitely going to have our challenges."
A 2011 economic impact study paints a grim snapshot: Water levels are currently 2 feet below average -- at that level, the study predicts a loss of nearly $850,000 in slip fees at just a handful of ports. The cost to the entire Lake Huron coast could be millions more.
Ships carry less; one harbormaster calculated that for each inch of water lost in the Lake Michigan-Huron system, the amount of cargo a ship could leave behind is equivalent to what fits in 200 tractor-trailers.
A commercial fishing operation predicted about $25,000 in lost revenue each week, because boats cannot be loaded to capacity without risking getting stuck in sand.
"If the price of fish doesn't justify the means, it might not be worth staying in business," said Tod Williams, an owner of Bay Port Fish in Bay Port.
To help, the state has taken the rare move of reallocating funds to help dredge public marinas and harbors, in the hopes that federal dollars will take care of parts of larger ports. State officials surveyed 63 communities on their dredging costs and have asked the Legislature for $21 million. The funds are awaiting Gov. Rick Snyder's approval. For South Haven harbormaster Paul VandenBosch, the $436,000 he requested isn't enough to dredge to a depth that will suit all boats. He expects lost revenue as large boats and sailboats bypass South Haven for deeper water.
"The biggest concern is long-term," VandenBosch said. "We've managed to respond to the crisis this year, but what happens if we have new lows?"
Nature affected, too
Along parts of Saginaw Bay, the loss of 2 feet of water has drastically altered life for recreational fishermen. At Vanderbilt Park, near Bay City, fishermen have to trek thousands of feet from the official parking lot to get to water deep enough to fish. And many of their boat launches are useless.
"Those shanties out there? That's 3 feet of water," said Neal Ronk, 65, from Quanicassee. On a winter day, Ronk and a friend drove to the park, past the parking lot and into an opening where they parked their truck. From there, they trudged hundreds of feet to fish in an area Ronk said used to be a perch haven. In previous years, their trek would have been under water.
"This is the lowest I've ever seen the water," said Ronk. "There's a lot of places I can't even imagine going in a boat."
While fishermen usually tough it out, Ken Merckel of the Michigan Steelhead and Salmon Fishermen's Association said that if enough decide to forgo fishing and boating licenses this year, the state could lose revenue.
"They've got to open up some of these harbors," Merckel said. "If you can't launch a boat and go out fishing, who's going to go out and get a fishing license? Who's going to renew a boat license?"
The water levels of the Great Lakes go through cycles within cycles, said Jim Diana of the University of Michigan and the Michigan Sea Grant. There's a yearly cycle that peaks in the summer and bottoms out in the winter. But there's also a decadal cycle, an overall peak and low that averages about 20 years. Data puts the most recent high in 1984.
"We're at 30 years now, rather than 20, and the levels aren't going up," Diana said.
Even decent snowfall this winter won't be enough to replenish the lakes, said Keith Kompoltowicz, a hydrologist with the U.S. Army Corps of Engineers. The 2011-12 winter was too mild, he said. Even in the middle of the summer, the lakes will be a foot short.
The effect on wildlife is both good and bad. Low water levels are tied to climate change and geological change, said Don Uzarski, director of the Central Michigan University Institute for Great Lakes Research.
Invasive phragmites outcompete natural wetland plants like bull rushes, he said. Fish nurseries that rely on continuous wetlands are suddenly in puddles, separated from open water. And birds lose a food source as fish fail to reach maturity.
One good thing, he said, is that when the water levels recede, the seeds of native plants can take hold in the drier conditions.
After millions of years under glaciers, the lake beds are springing up under water. Lake Huron is tilting and draining toward the St. Lawrence River, he said.
In addition, he said, the lake system has gotten warmer, taking longer to freeze in the winter. The warm water and the cold air lead to more evaporation. Then, there is the lack of snowfall. Free Press calculations of average snowfall at several points in Michigan suggest that during the winter of 2011-12, the state got between 10 and 18 inches less snow than this year.
Uzarski and other scientists said these aberrations point to one main thing: "Obviously, climate change is having an impact here," he said.
Waiting and watching
With the newest Pure Michigan ad showcasing life on the lakes, recreation might take a hit this summer because of low water levels. The thought has chambers of commerce, business owners and others worried, but optimistic.
"We're hoping for the best," said Joyce Stanek, director of the Port Austin Chamber of Commerce. "Certainly, if the water level doesn't go up, all over this area, we're all going to be in trouble."
Across the state, officials have talked about needing every rung of dockside ladders to get people on land, having to use floating docks and being unable to launch boats off ramps.
Anne Giori, owner of Perfect Landing Vacation Rentals in Tawas City, said reservations are coming in, but in Au Gres, where some properties are all mucky beachfront and no water, she's waiting and watching.
"Nobody seems to be warded off," she said. "I don't think we'll really know the impact until this summer."
But on Lake Michigan, low water levels have been a boon for lakefront real estate. Jim Harpe, a Realtor based in Grand Rapids, said lakefront properties are fetching top dollar, even as his inland lake properties languish with docks that lead to nowhere. At one property north of Muskegon, what used to be a sliver of sand had become a nice, private beach at the foot of the house.
"You sell when the lake is low, and buy when it's high," he said. "We've been blessed with sales along the lakeshore."
In Alpena, a request for $800,000 from the state will remove about 25,000 cubic yards of silt from the harbor, but it's not enough, said harbormaster Don Gilmet. Like in South Haven, larger boats could get stuck, and Gilmet said research vessels could suffer.
"Without doing a little dredging, we can't put their vessel back in the water," he said of the Thunder Bay Marine Sanctuary boat currently on land.
But dredging has its downside, said Uzarski. In addition to uprooted plants, pollutants, pesticides and heavy metals once lodged in the sediment are now loose in the water, with access to oxygen. That access can start chemical reactions that release other byproducts.
"Dredging liberates a lot of contaminants," said Uzarski. Though they understand the economic need to dredge now, Uzarski and other scientists said that for the sake of flora and fauna, the best thing to do is nothing.
"If we do nothing, the lake levels will return," said Uzarski. "Every time we go in and alter the system, we set off a chain of events that affects the ecosystem."
Dredging may not fix all
As the largest deep-water port on the Michigan side of Lake Michigan, Muskegon could lose big if water levels don't climb, said Stephen Gawron, the city's mayor. The city's port is underutilized, and while city officials work with Grand Rapids and Kent County to create a shipping corridor that would take everything from wind turbines to coal directly from Muskegon in-state, low water levels have created an unexpected hurdle in community development.
"This is a major economic issue," he said. "It isn't just an inconvenience for dock owners and fishermen."
And even with the Army Corps of Engineers dredging the channel in previous years, the harbor, the marina and private boat slips are left to the city and residents, and they need to be dealt with now.
State funds help, he said, but "it won't erase the problem. But it will mitigate it, because, you know, so much of this relies on nature."
In Ludington, low water levels have affected shipping, said City Manager John Shay. There is less road-building aggregate and limestone coming in, and the S.S. Badger, which ferries cars to Wisconsin and back, is dealing with docking issues.
"It's really a lifeblood to our economy," Shay said of shipping and the ferry. "It's going to be harder to do as the harbor fills back up."
Glen Nekvasil, of the Lake Carriers Association, said the entire shipping industry takes a hit when lake levels are low. Ships carry below capacity, so they make more trips, spending money on fuel, among other things. Dredging is the answer, he said.
Dredging, while helpful, hasn't solved all Bay Port Fish's problems. Williams, who owns the company with his brother Forrest Williams, said they've moved operations to Caseville and have had to use different routes to get the same amount of fish. On sea, they deal with fuel costs and maintenance, as mud gets drawn up into the boats. On land, he said, they deal with transport and labor costs in moving fish from a remote dock to their Bay Port processing facility.
"Basically, it's all mud there," Tod Williams said of their Bay Port dock. "There's no water. We're afraid to run aground in the marina. There's no place to go."
More Details: How lake levels are calculated
The U.S. Army Corps of Engineers keeps regular watch on the levels of the Great Lakes, expressing the levels as a function of feet or meters above sea level.
On March 11, hydrologists with the Corps said the Lake Michigan-Huron system was at 576.2 feet above sea level, with the March average as calculated since 1918 being 578.4 feet above sea level.
The lakes are about 2 feet lower than average.
Different modeling methods and observational data go into both real-time measurements and predictions of where lake levels are going to go.
Among the groups that share data with the Corps to create an official measurement are the U.S. Geological Survey, the National Oceanic and Atmospheric Administration and Environment Canada. These partnerships date to 1953.

21 March 2013

Ranking of state's healthiest counties puts Leelanau on top -- and Wayne dead last

A new ranking of Michigan's healthiest places to live puts Leelanau County -- home to the Sleeping Bear Dunes on Lake Michigan -- at the top.
Pulling up the rear as the least-healthy spot is Wayne County, according to the study, released today by researchers at the University of Wisconsin.
The annual study, which ranks counties against each other within each state, gave Oakland County the 22nd spot and Macomb the 43rd among 82 counties in Michigan. Keweenaw County was not ranked because of its tiny population (2,156 in the 2010 census), researchers said.
Although the study makes Leelanau's wine country sound like an Eden of health purists and Wayne the opposite, much of the difference in their rankings was driven by income and education levels, said University of Wisconsin associate researcher Angela Russell.
"We know that communities with higher incomes and higher education levels are more likely to be healthier," Russell said.
"For example, in counties with better jobs, people are more likely to have health insurance and have access to stores with healthier food," she said.
The study was based on six variables: mortality (length of life), morbidity (quality of life); health behaviors, clinical care, social and economic factors, and physical environment.
The study did not compare the health levels for states.
In a different annual study -- called America's Health Rankings -- Michigan was ranked the 37th healthiest state last year -- a big drop from its 2010 rank of 28th, largely because of the state's rise in unemployment and average age during the recession, as jobs ebbed and young graduates fled for other locales, researchers have said.
But some of Michigan's bright spots aren't reflective in the recent study, Russell said.
"I think you have more stories in Michigan (about communities) taking action than any other state," she said.
"Flint has created a 10-year plan for improving health," she said.
"Clare County has started a lot of good programs too. They took action right after our 2010 rankings," which put Clare last, behind Wayne, Russell added.
The goal of the study is to nudge health organizations into taking action by highlighting differences in longevity and in health behavior -- such as smoking, heavy drinking and exercise, said Amber Myers, a health data analyst with the Michigan Department of Community Health.

Union contracts could cost U-M, WSU

Story originally appeared on the Detroit News.

House Republicans propose 15% cut if universities ratify new deals before right to work law begins

Lansing — House Republicans set off a new right-to-work fight Tuesday, proposing to slash state funding for public universities, community colleges and school districts that ratify union contracts circumventing Michigan's new labor law.
Many GOP lawmakers object to new college or school district contracts, or extensions that range from five to 10 years, meaning union members couldn't opt out of paying dues when the right-to-work law takes effect March 28.

Universities and school districts have argued they are doing collective bargaining in good faith and, in at least one instance in Taylor, are trading longer contracts for financial concessions. The school officials also question whether the legislative move is constitutional.

It is unclear whether the proposals will gain support from the GOP-run Senate or Gov. Rick Snyder.

Wayne State University and the University of Michigan could lose $27.4 million and $47.1 million, respectively, under a budget plan a House panel approved Tuesday. The proposal cuts the schools' state funding by 15 percent if they sign long-term labor contracts between Dec. 10, the day before Snyder signed the bill, and March 28, when right to work goes into effect.

State Rep. Al Pscholka, R-Stevensville, said Republicans are trying to send "a pretty serious message" with the threat of less state aid.

"The message is: Protect taxpayers. If you're going to do contracts, make sure that you come up with real taxpayer savings. We haven't seen any yet," said Pscholka, chairman of the House higher education appropriations subcommittee.

The universities could escape the GOP budget ax if they could prove the new pacts saved 10 percent in employee costs. Democrats said the proposed provisions seek to intimidate school officials and labor unions from exercising their right to collectively bargain.

"This is all about furthering an ideological agenda rather than trying to improve education," said state Rep. Brandon Dillon, D-Grand Rapids.

Other schools at risk

Macomb Community College and other two-year institutions also could face 15 percent cuts for adopting new contracts under a plan a House community college appropriations subcommittee will consider Thursday.

MCC's board Tuesday night approved four union contracts, which range in length from three to five years, for faculty and administration, and clerical and support staff.

Another House committee that appropriates K-12 funding approved a similar dictate Tuesday that would block school districts that extend contracts before right to work takes effect from getting up to $100 per student in performance grants for the 2013-14 school year.

The Taylor and Warren school boards recently approved lengthy teacher union contracts.

Republican lawmakers have threatened for weeks to penalize schools for signing labor contracts that get around the right-to-work law, causing officials at Ferris State University to cease contract negotiations with its faculty that began before the Legislature fast-tracked the bills to the governor's desk in December.

The higher education funding bill targets Wayne State's agreement on an eight-year contract for faculty and U-M's agreement to a five-year extension for its lecturers, both of which would be exempted from right-to-work rules prohibiting financial support of labor unions as a condition of employment.

Eastern Michigan University also could lose 15 percent of its state funding, or $9.9 million, after ratifying earlier this year a new contract with its lecturers.

Republicans and conservative groups said schools and universities should only agree to let unions circumvent right to work if they get cuts in wages and benefits that save taxpayers money.

Snyder has said he would support long-term contracts that generate "significant" savings, but if there is little or no benefit to schools, "then it's fair to bring up questions and concerns," spokeswoman Sara Wurfel said.

"If the universities didn't get anything in return, then this was just a favor to the unions," said Derk Wilcox, senior attorney for the Mackinac Center Legal Foundation. The center has sued Taylor schools on behalf of three teachers over a 10-year contract protecting the teacher union's ability to collect mandatory dues.

University, school and union lobbyists vowed to fight the unprecedented proposed cuts.Mike Boulus, executive director of the President's Council of the State Universities of Michigan, said: "(The universities) haven't circumvented any law because there's no law in effect."

Senate Majority Leader Randy Richardville was noncommittal Tuesday about the budget proposals. "We have a couple of weeks before we visit these budgets in the Senate … and we'll continue to discuss it," said Richardville, R-Monroe.

'Punishment' for university

Wayne State's Board of Governors is scheduled to vote today on a proposed eight-year contract for professors that would allow the faculty union to keep collecting dues or agency fees.

The tentative agreement would give professors a $1,000 bonus this year, a raise of up to 2.75 percent next year and raises up to 2.5 percent in the subsequent six years — a 19 percent salary increase over eight years.

"I would hope that they would look at the action today" and reconsider, Pscholka said.

Wayne State spokesman Matt Lockwood lashed out at the proposed cut Tuesday, saying it was "punishment" for the university negotiating with its union and that it would lead to higher tuition bills for students.

U-M's Lecturers' Employee Organization is trying to ratify a new five-year contract by Thursday for 1,500 non-tenure track instructors on U-M's campuses in Ann Arbor, Flint and Dearborn.

Bonnie Halloran, president of the lecturers' organization, said the proposed reduction is "outrageous" since the union was in talks with the university before the right-to-work law was passed.

"The logic behind it is unbelievable; it's unthinkable," Halloran said. "For the state Legislature to come in and threaten the universities for doing something that's totally legal and working with their employees so they have good relations on the campus and peace in the classroom, is outrageous."

Cynthia Wilbanks, vice president of government relations for U-M, said university officials would try to get lawmakers to reconsider the proposed cuts.

"I think it's fair to say we have a lot more work to do," she said.

Under the budget proposal, Wayne State and U-M's lost funds would be redirected. About $2.2 million would go to Michigan State University's AgBioResearch and Extension service and $7 million would be applied to the Michigan Public School Employees Retirement System to cover costs for seven universities with employees in the pension fund.

The remaining money would go to other universities that meet certain performance standards, including restricting tuition increases to 3 percent next year.

Future bright for Metro Detroit's convention business

Story originally appeared on the Detroit News.

With renovations well under way at Cobo Center and new hotels under construction and others being rehabbed, the future of Metro Detroit's convention business is looking up after years of few options and unimpressive facilities.
While the number of conventions in the metro area remains flat from 2012 to 2013, industry officials and others expect significant gains as exhibit space upgrades and hotel and other improvements come to fruition.

"Even with some of the challenges we face, the interest in Detroit is growing," said Bill Bohde, senior vice president of sales and marketing at the Metro Detroit Convention & Visitors Bureau. "Our message is getting out that we are America's next comeback city."

New, large groups are booking meetings and conventions for 2014 and 2015, and some old customers, such as the Society of Manufacturing Engineers and American Gear Association, are returning after avoiding Detroit.

"Detroit was on the downside; it was not viewed as very good just because it hadn't been kept up to the rest of the market," said Eric Blanc, director of sales and marketing for the Tampa Convention Center in Florida. "It's good to hear the city is putting some additional efforts to become more competitive. If Detroit's more competitive, we're all better off at the end."

Despite that optimism, concerns linger among convention organizers about the city's financial problems, but local officials say such fears are eased after planners visit the Motor City.

Alcoholics Anonymous officials recently toured Detroit for the first time in four years after committing to host their 2020 convention here. A.A. leaders were worried about the state's Emergency Manager decision and wanted to determine firsthand whether to pull the event.

But after the trip, members of the A.A. group were so "wowed" by the city's improvements that they chose to keep the convention — and 60,000 estimated attendees — in Detroit, Bohde said.

"(A.A. officials) were pleased with what they saw and heard; A.A. looks forward to being in Detroit," the New York-based organization said in a statement.

About 25 conventions of 1,000 attendees or more have been scheduled throughout Metro Detroit for 2013, according to the Metro Detroit Convention & Visitors Bureau. That doesn't include the dozens of smaller conventions and trade shows that take place at the same facilities, including Detroit's three casinos.

Cobo has more major conventions (nine) booked than any other hotel or meeting space in the tri-county area. The 1,298-room Marriott at the Renaissance Center in Detroit follows with six, and the 772-room Adoba in Dearborn — formally the Hyatt Regency — ranks third with five.

The Adoba, with 500 fewer rooms than the Marriott and far less meeting space then either the Marriott or Cobo, is happy to just tread water and lure back organizations that left when the Hyatt closed.

"We're a really good fit for a lot of groups," said Adrienne Pumphrey, part owner of the Adoba brand. "We're back in the game, and we're interested in playing a bigger part."

A number of hotels are likely to play a bigger role in the future.

The Marriott is set to undergo renovations, expected to be finished by 2014. The former Pontchartrain Hotel, next door to Cobo Center, will reopen later this year after renovations as a Crowne Plaza, and the city's fire department building could become a boutique hotel soon. A 136-room Aloft boutique hotel is coming to the old David Whitney building on Woodward, too.

And in Novi, the 126-room Hyatt Place Hotel will open in July, making the Suburban Collection Showplace more appealing.

Bohde cited the M-1 light rail project and new Detroit Red Wings arena and entertainment district as additional draws for would-be event bookers.

"It's just going to add to that density downtown," Bohde said. "Detroit is really on a genuine comeback."
Cobo Center — whose ownership transferred from the city to the Detroit Regional Convention Facility Authority in 2009 — remains the biggest player in Metro Detroit's convention business. And its $279 million renovations, set to be complete in 2015, will add to its marketing appeal, said Thom Connors, Cobo Center general manager.

Connors said convention bookings were up 18 percent from 2011-2012. This year, they've been able to add new business and re-sign former accounts.

The Dearborn-based Society of Manufacturing Engineers — the largest event-producing manufacturing organization in the country — used to host events at Cobo regularly, but hasn't been downtown in 10 years because the facilities weren't good enough, said Debbie Holton, director of events. But after hearing about Cobo's renovations, the society decided to give it another shot.

The society will host a manufacturing event that's expected to draw about 7,000 members to Cobo in June 2014.
"We got an opportunity to see (the planned renovations) and it blew us away," Holton said. "We're very positive and optimistic about the facility changes and changes to the management."

Whitmer: Snyder's policies constitute largest tax increase in Mich. history

Story originally appeared on the Detroit News.

Lansing — Senate Democrats said Tuesday that 51 percent of Michigan's residents are being hit with tax increases for the first time this tax season as a result of policy changes made by Gov. Rick Snyder and the Republican legislative majority during the past two years.

Democratic Leader Gretchen Whitmer, D-East Lansing, said Snyder's budget-balancing policies "constitute the largest tax increase on individuals in Michigan history."

Under Snyder proposals adopted by the Legislature, business taxes were trimmed by $1.8 billion; the state income tax was expanded to include previously exempted pension income; and the state tax credit for low-income working families was reduced to 6 percent of the federal amount, down from 20 percent.

Also eliminated were a special $2,300 income tax exemption for seniors, a $600-per-child emption for families and an exemption for unemployment benefits greater then 50 percent of adjusted gross income. The homestead property tax exemption was reduced.

Snyder and Republican allies have said the budget strategies were necessary to make the state competitive, wipe out a billion-dollar structural budget deficit and create a better jobs climate in Michigan.

On the earned income tax credit, Snyder noted two years ago that most of the tax relief for low-income families comes from the federal tax credit. The GOP trimmed the tax credit as part of balancing the budget.

Republicans also have argued that the state's current EITC at 6 percent is more than what is offered in 31 other states.
Senate Democrats remain undeterred. The net result, Whitmer said, is that those with annual salaries above $334,000 a year pay $7 in added state income tax, while those making less than $17,000 a year pay an added $101.

Pamela Kreiner, a Lansing working mother of two who attended the Democratic press conference, said she was "in shock" to discover how much less she will get back from her state tax return this year compared to prior years. She said she can pay her bills but will have to cut back on discretionary spending. She said she wonders how less-fortunate people can handle the higher taxes.

Feds raid Oakland, Macomb medical offices, charge 13

Article originally appeared on the Detroit News.

Detroit — Thirteen people, including several doctors and pharmacists, were named in a federal indictment Tuesday, charging them with a drug scheme and health-care fraud.

The 21-count indictment is the latest set of charges stemming from a 2011 large-scale drug fraud case involving Canton Township pharmacy owner Babubhai "Bob" Patel. Patel was sentenced in February to 17 years in prison for drug fraud worth millions, a sweeping scheme that was mostly hatched in Indian languages and involved more than 20 pharmacies.

The indictment was unsealed in federal court Tuesday hours after U.S. Drug Enforcement Administration agents raided two medical offices in Oakland and Macomb counties.

Patel allegedly paid kickbacks and bribes to doctors who wrote bogus prescriptions and billed Medicare and Medicaid for various services. The prescriptions were filled at Patel's 26 pharmacies across the state, according to the indictment.
"We hope that doctors and pharmacists will take note that if they exploit these programs for personal profit, they will face serious consequences," U.S. Attorney Barbara McQuade said in a statement.

Multiple DEA agents were spotted at approximately 9 a.m. at Dr. Rajat Daniel's office at 1990 Union Lake in Commerce Township.

A second team of agents raided Dr. Richard Utarnachitt's medical office at 15945 19 Mile in Clinton Township.
Both doctors were named in the indictment Tuesday.

Daniel could not be reached immediately for comment. His office phone went directly into voicemail.
"It is alleged that these individuals abused their positions of trust and endangered the lives of countless people by illegally distributing opiate painkillers and depressants throughout southeast Michigan," said Robert L. Corso, special agent in charge of the DEA's Detroit office.

In the Patel case, he was accused of billing insurers for expensive prescriptions he never intended to give to customers. The government said he paid doctors to write the orders and also sent people to soup kitchens and homeless shelters to offer others cash in exchange for their Medicare or Medicaid number.

Patel was ordered to pay nearly $20 million in restitution as part of his sentence, along with the 17-year prison term.
Patel, a pharmacist, has deep ties to the local Indian community and was vice chairman of the Canton Hindu temple.
Five others were convicted alongside Patel following a trial last summer. Fifteen others pled guilty.

Also charged Tuesday:

Mehul Patel, 34, a pharmacist from Canton.

Pradeep Pandya, 49, a pharmacist from Grand Blanc.

Vikas Sharma, 34, a pharmacist from Windsor.

Mukesh Khunt, 33, a pharmacist from Toronto.

Utarnachitt, 71, of Clinton Township

Ruben Benito, 72, a physician from Madison Heights.

Carl Fowler, 60, a physician from West Bloomfield Township.

Javaid Bashir, 59, a physician from Jackson.

Daniel, 47, of West Bloomfield.

Vinod Patel, 40, a home health agency owner from Canton.

Atul Patel, 31, of Canton.

Anthony Macklin, a marketer from Detroit.

Michael Thoran, a marketer from Detroit.

19 March 2013

Tom Walsh: Venture firm taps into Ann Arbor's ideas and talent

Story originally appeared on Freep.

Silicon Valley is so yesterday. Ann Arbor is the place to be for technology and entrepreneurship these days.


Or wishful thinking?

It sure was the gist of some online buzz after this recent quote from Silicon Valley serial entrepreneur (and University of Michigan graduate) Steve Blank bounced around the Twitterverse:

"Silicon Valley is out of A players. Don't start your company here," Blank said March 6 at the Weather Underground Startup Trek, an annual two-day tour of the San Francisco Bay area technology scene by students for U-M's Center for Entrepreneurship.

"Start it in Ann Arbor," Blank added. "You won't find the talent you need here; it's in Ann Arbor."
Eight days later, another hotshot Silicon Valley star, venture capitalist Scott Chou, was in Ann Arbor speaking to students at the Ross School of Business. Chou had a slightly different spin on the Silicon-Valley-to-Ann Arbor comparison when I talked with him Thursday.

"The path to Wall Street still goes through Sand Hill Road," Chou told me. Translation: The big blockbuster public stock offerings -- think Google, Facebook -- still get critical funding from the venture capital community clustered around Sand Hill Road in Menlo Park, Calif.

But lots of the talent and many of the innovation ideas behind breakthrough companies come from places like Michigan, which has lots of engineers and major research universities nearby.
So where should a VC spend his or her time these days?

For Chou and his three partners in Michigan eLab, the answer is both Michigan and Silicon Valley. They have offices in Ann Arbor and San Mateo, Calif.

Michigan eLab was launched last summer in hopes of tapping into technology ideas from U-M faculty and other innovators in the region, and growing companies with the mentoring and funding connections of Chou and partners Doug Neal, Bob Stefanski and Rick Bolander. All have Silicon Valley experience, and all but Chou have strong Michigan connections.

Chou said others may have sentimental reasons for focusing on Michigan, but not him. He hopes to make a ton of money with the kind of "home run" investment that all VCs dream of.
So far, Michigan eLab has raised nearly $10 million, including $2.25 million in January from the Michigan Economic Development Corp. Chou said the firm hopes to raise another $5 million in the next few months and do a closing of its first fund with about $15 million, which it will then start investing directly into companies, mostly in information technology.

Michigan eLab talked last summer about an initial fund-raising goal of $40 million -- and it still plans to get there, Neal said. But money flowing into the VC industry nationwide has been slow of late. On the plus side, he added, there's been surprising interest by companies from California and elsewhere that want to open software engineering offices in Michigan, because the talent pool is good and the cost of living reasonable.

Chou, author of the book "Maxims, Morals and Metaphors: A Primer on Venture Capital," put it this way last week to students at the Ross School: "Everything is cheaper here. It's a source of disruptive innovations. It's a core center for research innovations -- one of the top-funded universities in the country. There's a lot of groundbreaking ideas and few venture capitalists here."

And when Dan Rosen, a first-year MBA student at U-M, asked Chou what he looks for in building a successful portfolio, Chou said, "For venture, it's all about the home run. The results are heavily skewed toward the Facebooks and the Googles. I think you have no choice but for every deal you do to have home run potential."

The ideas and the engineers may come from Ann Arbor, and really big money to scale the company may come from Silicon Valley. Chou sees Michigan eLab as a bridge to those home runs.

Troy mortgage company's business is booming

Story originally appeared on Freep.
There may not be an official title for fastest-growing Michigan company, but if there were, it might go to a once-modest mortgage operation called United Shore Financial Services.
In its new Troy digs near Maple and Stephenson Highway, USFS has announced plans to add 600 employees this year to its 1,100-person work force, which itself is a big jump from two years ago. The volume of its mortgage business is soaring toward $15 billion, good enough to rank among the top wholesale mortgage lenders in the nation.
The current operation spreads out over several acres of floor space. Colors are bright. Upbeat slogans adorn the walls. One maxim holds that if the car's not shaking, you're not driving fast enough.
With its corporate roots dating to the mid-1980s, USFS began to grow rapidly in recent years in the wake of the national financial collapse and recession. Its main business line operates as United Wholesale Mortgage, dealing with thousands of mortgage brokers around the nation to create loans for consumers. But USFS has other services in its portfolio.
There's also Shore Mortgage, headed by former Quicken Loans executive David Hall. Shore operates an online mortgage lender for consumers. Capital Mortgage Funding offers a more traditional walk-in mortgage office.
CEO Kip Kirkpatrick, a former basketball player at Northwestern University who later went into private equity investment in Chicago, joined USFS in the wake of the Great Recession. That national collapse was brought on at least in part by abuses in the mortgage market, particularly the spread of subprime loans.
"It looked like there was going to be an opportunity for somebody to emerge and create the next generation mortgage banking firm that embraced this new regulatory environment, that believed in things like ethics," Kirkpatrick said.
USFS has soared from a top 50 wholesale lender in the mortgage industry just a few years ago to the top five today, thanks mostly to aggressive planning and occupying the niche opened up by larger mortgage lenders being mired in the legacy problems of the subprime mess.
"We're taking market share," said Mat Ishbia, president of USFS and son of company Chairman Jeffrey Ishbia. "Our business is set up to really thrive when a customer gives us a chance."
For the most part, USFS does not compete head-to-head with Detroit-based Quicken Loans, which deals directly with consumers and is several times larger. USFS's main competition tends to be major financial institutions that work with mortgage brokers.
"As we're getting our brand out there and growing," Ishbia said, "people are giving us an opportunity. And once we get our first couple of good loans from these brokers, they see how easy our system is to work with, they see how great our underwriting staff is, they see how great our sales staff is, and they want to work with us more."
Kirkpatrick and Ishbia are to speak at Gov. Rick Snyder's Economic Summit, which runs today and Tuesday at Cobo Center in Detroit. The focus will be on creating jobs in Michigan, both by linking qualified workers to firms with openings and by tackling what some see as a skills gap. Although controversial among economists, the notion of a skills gap implies firms cannot find the qualified workers they are willing to hire.
Snyder has said he convened the event to talk about future hiring needs. Those findings will then be discussed at Snyder's April meeting on education. Michael Finney, president and CEO of the Michigan Economic Development Corp., said the focus will be squarely on jobs.
"This economic summit is really all about how we can help fast-growing companies, like United Shore Financial, find employees with the diverse talents they need to maintain their growth," Finney said. "We regularly hear from businesses that they have solid jobs, good-paying jobs, and are having real difficulty in finding people with the capabilities they need. The governor's economic summit is our first step to resolving this issue."
The large and growing work force at USFS needs a lot of care and tending, and Kirkpatrick, Ishbia, Hall and other leaders at USFS have worked to create an upbeat, high-energy work space. Amenities such as coffee bars abound. There is a putting green, a concierge to handle needs such as dry cleaning, even a valet car parking service -- but only for line workers, not for top execs.
The work space is colorful and has a minimum of executive offices. Most supervisors work side-by-side with their teams.
"It all starts with how we treat our employees first," Ishbia said. "We're trying to build a place where they love to be."
Contact John Gallagher: 313-222-5173 or gallagher99@freepress.com
More Details: More about Kip Kirkpatrick
Job: CEO of United Shore Financial Services
Experience: Worked in private equity investment in Chicago before joining USFS
Education: Bachelor's degree and master's in business administration from Northwestern University
Personal: Played basketball for Northwestern
A look at United Shore Financial Services
The company has three key operations:
* United Wholesale Mortgage, which works with mortgage brokers to create loans.
* Shore Mortgage, an online mortgage lender.
* Capital Mortgage Funding, a traditional retail mortgage lender.