Detroit Mayor Proposes Conversion of Health Department to a Nonprofit

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May 15, 2012; Source: Detroit Free Press

There is an interesting dynamic going on in nearly bankrupt Detroit. The Bing administration appears to be disaggregating functions of city government so that some might be better administered by nonprofits rather than city agencies. In February and March, Mayor Dave Bing signaled his acquiescence to the idea of transferring control of the city’s Community Services Block Grant (CSBG) and weatherization funding from the Detroit Department of Human Services to an independent nonprofit, potentially even one that is not even located in Detroit.  Now there is a news report that the Bing administration is going to try to convert the city health department into a new nonprofit, the Institute for Population Health. If the City Council approves, the new nonprofit institute will be up and running by the first of October.

The Free Press describes the new Institute as “streamlined,” which may be meant in comparison to a municipal government department, but the article hints at elements of streamlining that add up to money. The proposed budget of the new Institute will be $64.5 million, $6.5 million less than the health department’s last budget. Under the proposal, the city health department’s 400 staff and contract workers will be permitted to apply for positions with the new institute, but there will be 150 less job slots.

It’s hard to say how what the Detroit City Council will do with the proposal. According to the Detroit News, the Council said that they need more information before making a decision, and one member of the Council said the proposal “smells,” while another suggested that the “model has to be fully vetted.” The Council is often at loggerheads with the mayor of Detroit, no matter who he is, and has reacted unfavorably to the idea of giving up city control over CSBG and weatherization funds. But there is a sense that Detroit’s inability to fix its own bureaucracy has led the mayor—supported by the governor—to think about parceling out functions that the city has historically not handled well, even if, in this case, it is to a nonprofit that seems to be entirely new. Nonprofits have long been contracted by municipal agencies to deliver city government services. If the Council moves forward on the mayor’s plan, Detroit may be demonstrating a new model of actually turning pieces of local government over to nonprofits to run on the city’s behalf.—Rick Cohen