Day Six: Detroit’s Bankruptcy Trial

Day Six: Detroit’s Bankruptcy Trial

The afternoon court session started with attorneys for Oakland and Wayne County telling Judge Steven Rhodes they would drop their objections to the city’s Plan of Adjustment. Macomb County will not. Here’s why.

Meanwhile, Terri Renshaw is on the witness stand. She’s a former city staff attorney and a member of the Official Retirees Committee in the bankruptcy case.

This morning, researcher Caroline Sallee finished her testimony. As a manager in Ernst & Young’s Quantitative Economics & Statistics practice Sallee was responsible for creating the City’s 10- and 40-year property tax and state revenue sharing projections. Here is her report. She was followed by Fire Commissioner Ed Jenkins and Police Chief James Craig. (See below for their testimony.)

2:30 p.m.

After discussions about the regional water deal, Terri Renshaw took the witness stand. She’s a former city law clerk and a member of the Official Retirees Committee in the bankruptcy case. She’s being questioned by Claude Montgomery, one of the attorneys for the committee.

More about the committee is here and in this Detroit Free Press article.

11:49 a.m.

The first creditor attorney to question Chief Craig is Barbara Patek. Her bio is here. She represents the Detroit Police Officers Association. She asked him about leadership, the union and restructuring the department. Craig said there was not always agreement between the department and the DPOA, but “was always a willingness” to talk.

The second creditor attorney to question Chief Craig was William Arnault. His bio is here. He represents bond insurer Syncora. He started with questions about what factors related to the bankruptcy affected morale within the department and about the department’s ability to recruit new officers.

11:34 a.m.

Detroit Police Chief James Craig has been outspoken about the need to place civilian employees in some of the roles sworn officers are currently holding.  For example: “Dispatchers have been sworn police officers,” he said. “In most departments today, dispatch functions are performed by civilian staff.” He also said vehicle maintenance officers would be changed to civilian employees.

And what will happen to the sworn officer currently serving in those positions? Hertzberg asked.

“They’ll be deployed to the field,” Craig said.

11:28 a.m.

Under questioning from city attorney Robert Hertzberg, the Detroit Police Chief said there were many workplace issues causing some officers to leave.

“Pay, benefits … working conditions,” Craig said. “They just felt like with everything the city has faced over recent years, they were concerned about the future of staying.”

Related to working conditions, the department has cameras in some police cars, but Craig said they are dated and need replacing. Radios have sporadic outages. “Certainly that’s a core issue for officer safety,” he said. “It puts them at risk.”

But Craig also identified recent improvements: detectives are posted in all 12 precincts, crime is down by 19 percent.

10:57 a.m.

Shortly after James Craig became Detroit’s police chief in July 2013, he saw what he thought was a beat up taxi cab on the street.

“I found out it was actually a police vehicle that was in service,” he said. “When I took a closer look I found out that the department’s fleet was certainly in need of replacement.”

Craig is on the witness stand, being questioned on direct examination by city attorney Robert Hertzberg. Craig started 37 years ago as a Detroit police officer. He left the department, one of 1,500 officers laid off, and he went to Los Angeles in 1981 where he started as an officer and rose through the ranks. He ultimately retired as a “Captain 3.”

Hertzberg asked him more questions about what it was like when he came to Detroit last year.

“It was very clear that the morale was at the very bottom for rank and file officers. It was also in my judgment that the department lacked leadership and accountability and lastly something that became obvious was the fact that the department had no credibility with the community it served. The local community and surrounding communities,” he said.

Here’s Craig’s bio on the city’s website.

10:24 a.m.

At the end of Jenkins’ testimony, Judge Steven Rhodes had a few questions. Here’s one of the exchanges:

Judge Rhodes: You were asked whether the investments the city foresees for the fire department will permit the department to meet the standards of the National Fire Protection Association, and you said you thought it would come close. In what respect will it not meet those standards?

Jenkins: We can always use more money but in terms of those standards, 49 companies is great. When I came on, we had 82 companies and we were able to respond to multiple large-scale fires. …I believe $158 million will do a great deal to help the fire department but we’re about four years behind in terms of training and equipment. … If we get this money, it’s going to be spent wisely. I can’t say it will be perfect but it will be very close.

10:17 a.m.

Macomb County’s attorney, Debra O’Gorman, who is from New York, also cross examined Ed Jenkins, the city’s fire commissioner. She’s pointing out that any testimony he gives about fire fighters is not based on any systematic study “Just some anecdotal converseations with a few people?” she asked.

“Yes,” Jenkins said.

10:15 a.m.

The first attorney to cross examine the fire commissioner is Stephen Hackney who represents bond insurer Syncora. He’s asked questions about the effect of the bankruptcy on fire fighter morale and discussed the dynamics of any citywide revitalization on the department’s work.

For example, Hackney raised the earlier statistic of how many runs are made to vacant buildings, presuming those runs wouldn’t have to be made after the city’s blight removal efforts.

“A healthy city doesn’t burn,” Jenkins said.

9:46 a.m.

Jenkins said the fire department plans to build seven or eight new “super stations” in locations throughout the city. Older stations would be “shuttered and closed.”

fire station weddingNo testimony on what would happen to them…but here’s a photo from a lovely wedding I went to last weekend in a former station on West Lafayette Boulevard. The property has been sold and turned into a charming event space


9:35 a.m.

Fire commissioner Ed Jenkins’ testimony is contradicting, slightly, some previous testimony in the city’s case. For example, restructuring expert Charles Moore testified that fire department response times were 9 minutes while Jenkins said 7 to 8 minutes was the norm. There as also the exchange about the pop cans serving as alerts for faxes for run notification. (See below.)

9:25 a.m.

A few more tidbits from Detroit fire commissioner Ed Jenkins’ testimony:

*The Plan of Adjustment provides for $158 million in improvements for the department.

*About 1,150 people currently work in the department. About 770 are fire fighters, but 1,019 are needed. About 220 are Emergency Medical Services technicians, but 260 are needed.

*The department makes about 30,000 runs annually. About 70 percent are to vacant homes.

*The average age of a fire station is 90-100 years old. Many of of them have had to be shored up to support modern fire fighting equipment.

*At one point, the department only had four ambulances operating for the entire city.

*In an answer to Hertzberg’s question about why vacant buildings burn, Jenkins said, “I know pigeons don’t smoke so I know there are some unscrupulous individuals that purposefully set fire to these buildings.”

*EMS handles up to 110,000 runs a year.


9:19 a.m.

Ed Jenkins is on the witness stand, called by the city’s attorneys. He’s the city’s Executive Fire Commissioners, a post he’s held since April. He’s being questioned by city attorney, Robert Hertzberg, who’s with the Southfield firm Pepper Hamilton. Jenkins’ career also includes work as a Detroit fire fighter and lieutenant. He’s also a Certified Public Accountant and worked at Coopers & Lybrand and Delphi Corp.,

The city’s Plan of Adjustment contemplates some $158 million in upgrades and improvements for the fire department. According to the city’s Chief Financial Officer, John Hill, who testified at the bankruptcy trial last week, about $59 million is to be spent on the department’s fleet, including the replacement of vehicles. The city also would invest $71 million in capital improvements, including the repair and replacement of several fire stations. Another $20 million would go toward equipment.

Under questioning, Jenkins attempted to debunk the pop-can-on-the-fax-machine story, saying it dated back to the 1980s when a device was put on printers as a “convenience” alert in case the person in charge of answering the phone walked away. Last week, one of the city’s witnesses testified that instead of having modern alert systems, fire stations were receiving faxes to notify them of calls and addresses. In order to ensure they would hear the alerts, fire fighters placed pop cans on the fax machines so they would fall off when a fax came in. The noise would alert them to the call.

Here is the Detroit Free Press story about the device.