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"Water Issue"
Stephen Goodfellow

Joseph M. Wright of the Rothchild-Wright Group, LLC makes his pitch to the Highland Park Council
Joseph M. Wright of the Rothchild-Wright Group, LLC
makes his pitch to the Highland Park Council


Top, Ameenah Omar votes "No", Below Frank Ross votes "Yes" to proposalOne cannot be surprised by President Omar's reversal of opinion, initially voting to move the proposal forward on the Highland Park Leadership Steering Committee (HPLSC), but later voting against it in Council.

My own abstention vote at the HPLSC was the result of a frustrating lack of data. I felt that the Rothchild-Wright Group had done a poor presentation, but did not want to necessarily vote against them just because they might have had a bad day.
I asked Mr. Wright about the lack of online information, and he told me that the company was new, but his former company, JM Wright & Associates - had been around for 20 years.

I went home and spent  frustrating hours attempting to discern what and who this group was. The results were very disappointing.
I found NO tangible information, direct or indirect about the company. The only thing I could find was a one page defunct website for the Rothchild-Wright Group.

To put it in perspective, were you to do a search on any established company, you will usually find primary information - that which can be gleaned from the company's website, secondary information - links and interactions between said company and those with which it does business, and third party information - comments and queries about the company by unassociated individuals.

As far as I can discern, the company's main boosters appear to come from State Senator Martha G. Scott'sSenator Martha G. Scott and Mayor Titus Mclary watching proceedings. Mr Wright in foreground. office.
What surprised me about the proposal was the brokers for Highland Park - The State of Michigan - had apparently not given the State appointed city manager the resources to perform a feasibility study so as to determine the value of the water department's product.

What is the value of drinking water ?
Who wants it?
What does it cost to get it to prospective customers?

This is basic protocol that precedes any commercial transaction on this scale. The value of such a study ought to be self-evident; the document itself is of immeasurable value, because lenders - such as banks - have data upon which to determine the risk of lending.
The study also gives the brokers protection in that if something goes wrong,  they can at least demonstrate that they have made a good-faith effort to see that any transaction is based upon reliable data.

It was obvious that Mr. Wright's organization had done a study. They knew what to propose and, as is normal business practice, went for the biggest profit margin possible. That is as should be, that's free enterprise. My question is why hadn't our brokers come to the table armed with their own study? Surely they didn't rely on the Rothchild-Wright Group's study for their judgement?

With all this in mind, I went to the Council special session to hear what Mr. Wright had to say, hoping to be illuminated.

Alas, Mr. Wright's presentation at the Council special session was as sparse of data and as vague as that I had seen presented previously at the the HPLSC. At one point Mr. Wright needed to get basic documents from his car while the council drummed their fingers, waiting for the session to proceed.

Things seemed to go down hill from there. As evidenced by their intense questioning, the Council seemed increasingly skeptical and nervous about the proposal.

You may imagine the citizenry of Highland Park exhibited even less enthusiasm when they got the floor.
When I left, Valerie Johnson of Farrand Park, a committee member on the HPLSC and a member of the Water Coalition waxed eloquently, elucidating her argument why the Rothchild-Wright Group should not be allowed to run HP's water department.

I was relieved to hear the Council vote was 4-1 against, Frank Ross being the only council member voting in favor. At the very least, the State needs to do the above-mentioned feasibility study. The Rothchild-Wright Group needs to come better prepared, if they can.

What needs to be done?

The State appointed city manager, Mrs. Ramona Pearson, is bound by her mission to make Highland Park able to pay its bills, at any cost. From her point of view, she is obliged to entertain any proposal that falls within this parameter, even if it may not be in the long term interest of the city. On any financial issue, despite what the Mayor, the Council desires, the city manager has the final say.
It is my hope that Mrs. Pearson will confer with the Governors Office on this subject before overriding the wishes of the Highland Park Council.

Frankly, I am surprised - with all the attention that Highland Park appears to be getting from Governors Office - that so little consideration is being afforded this third world city.
Since the State is our broker in this matter, they are the ones responsible to see that the Highland Park Water Utility be handled in a responsible manner and not be victim to whatever opportunistic fly-by-night company offers up a first bid.

To err is human. Is this an unfortunate oversight? Might the parties take a deep breath and look at this situation through new eyes? Surely reason must prevail.

Highland Park Council President Ameenah OmarHighland Park Council President Ameenah Omar:
"I supported the Agreement with the Steering Committee because the deliverables proposed by RWG directly addressed concerns expressed by citizens for years.

I had questions and I raised them at the meeting. Mr. Wright promised to respond to my questions, which addressed the absence of a history of the company to operate water systems, two years of financial statements which would aid me in determining if the company could in fact finance the Agreement, and a list of the names of investors.

I owed it to citizens to consider the Agreement and to perform due diligence before voting on the issue. Additionally, I have confidence in Mrs. Pearson and her team. I could not take a chance on the issue being dismissed before fully pursuing the possibility of meeting the needs of our citizens.
At the Special Meeting to which you referred, Mr. Wright did not provide the requested documents and responded poorly to questions raised by Council members and the public. He, in fact convinced me that he had very limited knowledge of any water system, no plan was presented and he was very evasive in his response to questions.

While his presentation was very poor, he thanked me for my input after the meeting when I told him that I really like the concept and I am aware that many municipalities have turned to managed operations to off set budget shortfalls, that he will check with his investors as to their desire to continue talking with us. If so, he will respond to issues raised at the meeting and get with Mrs. Pearson.
I remain committed to taking cost cutting and cost avoidance actions, and to working with the Emergency Financial Manager and her team. I am very impressed that in spite of revenue reductions, they have reduced our outstanding debt by more than three million dollars.

The bottom line regarding the water issue is that we need to relieve the general fund and design operations to generate revenue to meet our pension obligations. I do, however, owe it to citizens to be clear on HOW WE REACH THIS GOAL. TO REACH THE BEST DECISION, WHAT HAS WORKED FOR ME IS, HOLD OFF ANY MOVE THAT LEAVES ME WITH MORE QUESTIONS THAN ANSWERS. Premature decisions may cause me to miss additional information. I owe citizens the assurance that I have done my homework, free of compromise.

I fully stand by my decision on Monday night and my decision does not mitigate Mrs. Pearson's decisions."


Highland Park Councilman Frank RossAddendum: I had a chance meeting with Councilman Frank Ross, the only Council vote in favor of the Rothchild-Wright water agreement. I asked him about his position on the water issue and agreed to summarize his opinion for
the article:

"Highland Park is in a desperate condition, and this calls for extraordinary measures, so that when The state appointed city manager Ramona Person has spent a year carefully putting a deal together that will help Highland Park into the black, I think she deserves our moral and practical support. Mrs. Pearson is not obliged to consult with the Highland Park government and citizenry, yet she does, which is a tribute to her consideration and honor.
Our citizens need immediate relief from inconsistent water billings, out-of-control delinquencies and water main breaks all over the city. Highland Park needs immediate cash flow to move towards solvency and long-term operational stability. We are not selling our water system but arranging for its professional management. All the risk is on Rothchild-Wright Group successfully managing our water system, with the option to terminate the agreement within 30 days if they fail to do so. We need to move forward immediately with this management arrangement and I supported my opinion with my vote on Monday"


Comments? Agree? Disagree?


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