Tagged: Detroit

The group that runs the People Mover (Detroit's downtown light-rail system)  announced today that it has secured enough funding to operate the system though June 2013.

Officials from the Detroit Transportation Corporation (DTC) say they "have a special reason to give thanks this season" because they've made up for a $3.4 million shortfall for the current fiscal year. The system will also get $6.2 million for following fiscal year.

The money is coming from an escrow account set up in 1989 for maintenance of the People Mover’s guideway system. Officials say the guideway structure is "sound and has been maintained in good condition."

The Detroit News reports the system has seen cuts from city government and the state:

The City Council cut the People Mover's annual subsidy in July by almost a quarter to $3.4 million. That triggered the state of Michigan to reduce its $3.6 million matching subsidy to $1 million — a big blow to the system's $15 million budget...

Officials increased the People Mover's fares to 75 cents from 50 cents last month — the first bump in the system's 24-year history. But the system has never come close to its break-even point, which would require 10 times more annual ridership.

The News reports that fares from 2.3 million riders in 2010 generated $900,000.

The on-again-off-again light rail plan in Detroit is now officially "off," according to the Detroit Free Press.

A light-rail system was planned between downtown Detroit and 8 Mile Rd.

The paper reports the $25 million pledged to the project from a federal TIGER (Transportation Investment Generating Economic Recovery) grant will go toward a bus system instead.

From the Free Press:

U.S. Transportation Secretary Ray LaHood told Detroit Mayor Dave Bing that doubts that Detroit could pay operating costs over the long term for the light-rail line because of its and the state’s financial problems swayed him against the plan. The decision came despite earlier public support that included LaHood’s 2010 visit to Detroit to award a $25-million grant to get the project moving.

LaHood, President Barack Obama’s top transportation official, met last week with Bing and Snyder, and the sides agreed that the better option is a system of rapid-transit buses operating in dedicated lanes on routes from downtown to and through the suburbs along Gratiot, Woodward and Michigan avenues and along M-59, the officials said.

Private and philanthropic investors had pledged $100 million toward the light rail project. Though some investors had shown signs of wavering.

The Free Press reports the decision to scrap the light-rail plan "outraged Megan Owens, director of the Detroit advocacy group Transportation Riders United." Advocates said the investments made in light-rail line would lead to redevelopment along Woodward Avenue:

 “We’re basically throwing away a $3-billion economic development investment,” Owens said. “I’m outraged Mayor Bing would let this happen on his watch.”

Critics of the project said the light-rail project would be a waste of money and could suffer the same fate as the People Mover in Detroit. That system has been struggling to remain economically viable.

Detroit leaders are working to come up with cuts that will put the city on a stable financial path, but they don't think a 30 percent cut to their own budget is the right way to go.

Michigan Radio's Sarah Hulett reported on Gary Brown's austerity proposal last week. From Hulett's report:

The Detroit City Council’s budget is more than $13 million, and includes perks like city-issued cars and cell phones for council members.

Gary Brown is the Council President Pro Tem. He says like other city employees, he only pays ten percent of his health care costs. Brown’s proposal calls for upping that employee contribution to 30 percent. He says that’s a change the entire city workforce needs to accept.

"And the message, if we don’t show leadership on this issue, is that we’re asking our employees to do something we’re not willing to do," Brown said.

Brown made a similar proposal last month that went nowhere. This time he’s introduced a resolution that will get an up-or-down vote next week.

The Detroit News reports Brown's proposal has been rejected:

DETROIT (AP) - Detroit nonprofits are getting $1.1 million in grants to help improve neighborhoods, encourage small businesses and train workers.

The funding was announced Tuesday by Chase, the U.S. consumer and commercial banking brand of JPMorgan Chase & Co.

Chase says the two largest grants are $245,000 to Southwest Solutions and $230,000 to Vanguard Community Development Corp.

Those grants aim to help Detroit neighborhoods and improve foreclosure counseling efforts.