By Joel Thurtell
Abe Munfakh calls himself a “rainmaker.”
He’s running for state senate.
“Rainmaker.”
What he means is that he got contracts for the Ann Arbor engineering firm he headed.
In the following April 22, 1992 Detroit Free Press article, I outlined one way Munfakh made rain for his company, Ayres, Lewis, Norris & May.
He got them a $10 million sewer engineering contract.
He was in the right place, right time.
As a member of the Plymouth Township Board of Trustees, he knew the skinny on a hundred-million-dollar construction project known as the Western Townships Utilities Authority. He knew about WTUA’s plan to pipe sewage from three townships to Ypsilanti. Not only knew about it — he voted to establish the authority and to collect fees from residents.
No requests for proposals on this deal.
While Munfakh was a the township trustee, his firm, Ayres, Lewis, Norris & May, got the contract in a no-bid deal.
He makes no bones about it. His website boasts, “Abe was the rainmaker and jobs creator (for Ayres, Lewis, Norris & May) and under his leadership ALNM expanded and grew from 31 employees to 152 employees when he retired in 2004.”
Talk about well-connected.
The fix was in.
WTUA benefited other firms and individuals with connections to local politicians as well.
Every politician connected to the WTUA insider trading deal got bounced out of office in the August 1992 Republican primary election, including Abe Munfakh, who placed last in a field of seven running for a Plymouth Township board seat.
Eventually, Munfakh won back a seat on the Plymouth Township board.
Now he wants a seat in the state senate.
Rainmaker for the Legislature.
Wonder whose benefit he’ll be working for?
This story, reprinted with permission of the Detroit Free Press, shows how Munfakh made rain for himself and his company while he was an elected Plymouth Township trustee.
Is it accurate?
Well, local officials and a a slew of well-paid PR firms — mentioned in my story — went through my article with microscopes looking for ways to pick it apart. That they found only one inconsequential error is a testament to this article’s accuracy.
Now, 18 years later, this self-styled “rainmaker” wants a seat in the state senate.
Headline: SEWER COSTS SWAMP 3 TOWNSHIPS
Sub-Head:
Byline: JOEL THURTELL FREE PRESS STAFF WRITER
Pub-Date: 2/22/1992
Memo: DRAINING THE SUBURBS; SEE CHART IN MICROFILM
Correction: CORRECTION RAN MARCH 3, 1992
GETTING IT STRAIGHT
* A FEB. 22 FRONT-PAGE ARTICLE INCORRECTLY REPORTED WHAT THE
YPSILANTI COMMUNITY UTILITIES AUTHORITY AND WAYNE COUNTY CHARGE
FOR TREATING SEWAGE. YCUA CHARGES $10.59 IN OPERATION AND
MAINTENANCE COSTS PER 1,000 CUBIC FEET. WAYNE COUNTY CHARGES
CANTON TOWNSHIP $5.65 PER 1,000 CUBIC FEET, NORTHVILLE TOWNSHIP
$4.77 AND PLYMOUTH TOWNSHIP $5.23
Text: Six years ago, three Wayne County suburbs decided to save their residents
millions of dollars in sewer fees.
Wayne County wanted $25.5 million for the three to join its Super Sewer
project. But the supervisors of Plymouth, Canton and Northville Townships
said they could do it for $17 million and went their own way.
Their way is costing the 98,000 residents of the townships $94.5 million.
At least $30 million of that is being spent on non- construction costs.
And more than $11.5 million in contracts has been awarded to people with
connections with the township officials, a Free Press investigation shows.
What will the townships get for the extra money? Sewer rates at least twice
as high as those of the 12 communities tied into Super Sewer. A system with
only half as much additional capacity as Super Sewer would have given them —
and only if the Ypsilanti plant, which will treat the sewage, is expanded.
That cost hasn’t been calculated.
“Holy Toledo! That’s incredible!” exclaimed former Canton Township Clerk
Linda Chuhran, who now regrets casting one of the seven votes in 1986 that
established the Western Townships Utilities Authority, which oversees the
sewer system.
Canton Township supervisor and sewer authority chairman Thomas Yack defend the project, saying it’s better for the environment and provides all the
capacity the western townships will need for growth.
“The project is a lot different than the early project envisioned by Wayne
County,” Yack said. “Why it’s four or five fold, I really couldn’t respond.”
But a Free Press investigation shows that the three township supervisors,
who double as commissioners for the sewer authority, have done little to hold
down costs:
* Some $30 million is going to nonconstruction contracts that were awarded
without competitive bidding.
* The sewer board so far has paid out at least $5.5 million to people and
businesses with connections to the authority, according to records obtained by
the Free Press. Their contracts call for them to receive another $6 million.
Among work awarded without bids:
* Legal services and consulting contracts to firms connected to former WTUA
secretary Robert Law. His legal firm also represents the three townships. His
brother, Gerald Law, is now Plymouth Township supervisor and WTUA treasurer.
* Land acquisition, assigned to John Breen, brother of Maurice Breen,
authority cofounder and former Plymouth Township supervisor.
* Engineering, awarded to a firm headed by Abe Munfakh, a Plymouth Township
trustee who voted to establish WTUA.
Meanwhile, Super Sewer costs haven’t exceeded the original projection of $60
million and the federal government is paying 55 percent. The western
townships have received no federal money.
Because of the federal money, all contracts have been awarded on a
competitive basis, according to Tom Kampinnen of the state Department of
Natural Resources. Super Sewer will replace sewer lines between 12 communities
and the Detroit Wastewater Treatment Plant.
‘There will be no unknowns’
When officials of the townships decided to break away from Super Sewer in
1986, they were optimistic.
“You’re looking at a better project we’re buying into,” Maurice Breen
said at the time. “We’ll know what the dollars are. There will be no unknowns
in the project other than acts of nature.”
James Poole, then the Canton Township supervisor, warned that Super Sewer
might never receive federal funds.
The supervisors didn’t believe they would pay only $25.5 million for a
stake in the county system. They worried they would be taxed down the road if
Detroit were ordered to upgrade its sewage treatment plant.
Besides, the township officials said, instead of trusting Wayne County and
Detroit, they would have control over their sewer facilities.
Officials of the townships were able to form WTUA and issue bonds without
voter approval under a 1955 state law that allows them to sell bonds to
finance public utilities. The supervisors — Canton’s Poole, Plymouth’s
Breen and Northville’s Suzie Heintz — gathered the day after Christmas 1986
and formally organized the authority.
“We told them when they started that it was going to be very expensive,”
said Wayne County Department of Public Works Director Jim Murray, who was
Washtenaw County drain commissioner and chairman of the Michigan Water
Resources Commission in 1988 when the sewer authority sought a new water
discharge permit for the Ypsilanti plant.
Had the townships stayed with Super Sewer, they were promised about 52
million gallons a day of additional capacity, or six times the 8.7 million
gallons they will lease from the Ypsilanti Community Utilities Authority
beginning in fall 1993. If they want more, the townships will have to pay to
expand the Ypsilanti plant, said YCUA Director Bruce Jones. An expanded plant
would give them about half what Super Sewer promised, according to the
Ypsilanti sewer authority’s figures.
WTUA project engineer Phil Loud said he believes Super Sewer’s promised
capacity in 1986 was exaggerated. He said his firm is using sophisticated
methods of estimating capacity which may not have been used by engineers
planning Wayne County’s system.
In the early years of the authority, officials also were optimistic about
rates.
In 1988, Poole boasted, “eventually, our rates will be better than Detroit”
because the Ypsilanti plant “is a much more efficient operation.”
Today, Ypsilanti’s rate is $12.64 per 1,000 cubic feet a second, compared
to Wayne County’s $4.77, according to YCUA and the Wayne County Department of Public Works.
Some bills already higher
Some residents already are getting higher bills to pay for the new system;
they will get them for a generation or more as WTUA pays off its construction
bonds, plus $150 million in interest.
Plymouth Township residents are paying quarterly $15.69 installments
intended to collect more than $1,882 per household over the next 30 years.
Northville Township plans to cover its debt through hookup fees paid by
developers of new housing, according to the township finance director, Duane
Harrigan.
Canton Township plans to pay part of its share by gradually increasing
water and sewer rates, said finance director John Spencer.
“We don’t see it impacting rates significantly,” he said. Over the past 20
years, Canton has saved about $17 million from hookup fees, and part of that
could be used for the debt, he said.
Some of the debt comes from administrative costs the authority incurred in
getting the bond money.
A computer analysis of municipal bond transactions, done for the Free
Press by Securities Data Co. of Newark, N.J., shows that the fees WTUA paid to
issue its 1989 and 1991 bonds were more than 20 percent above average.
In all, the authority’s bonding fees cost $494,385 above average.
Among those costs was a $75,000 finder’s fee to Plymouth stockbroker Craig
Fleming, who said he learned of the deal from Ernie Essad, a partner in
WTUA’s law firm. Fleming said he acted as a liaison between the law firm and
his employers, Prescott, Ball and Turben Inc. of Chicago, the lead bond
underwriters.
No bidding policy
Sewer officials say much of the extra cost comes from unanticipated
construction needs, such as a larger interceptor and catch basin and a pump
station and pipes to move treated wastewater to the Rouge River.
But they could have tried to lower costs by requiring bidding for
professional services. The authority has no bidding policy, according to
Executive Director Deloris Newell.
Said Robert VanRavenswaay Jr., an authority attorney: “There’s really
nothing in the statutes that says or even suggests we get requests for
proposals for everything that is procured.”
But former Canton Township Clerk Chuhran, now an accountant for General
Motors, calls not seeking bids “against all the ethics and guidelines set up
for governments to run by.”
The Michigan Townships Association, to which the three townships belong,
recently drafted a policy recommending that its members solicit competitive
bids for goods and services.
Peter Letzmann, past president of the Michigan Association of Municipal
Attorneys who frequently speaks on ethics in government, said the sewer board
should have sought bids.
“It seems to me that any public officials would take great steps to be
squeaky clean or scrupulous within the letter of the law so there would be no
conflict of interest or no appearance of conflict of interest,” said Letzmann.
“Those people who do not take that step are doing a disservice to their
municipality or governmental agency because today we have a crying need for
ethics, honesty and integrity in government.”
No-bid contracts for engineering, lobbying and legal services went to
people with connections to township officials.
The engineering contract went to the Ann Arbor firm of Ayres, Lewis,
Norris & May, whose president is Plymouth Township Trustee Munfakh.
Munfakh voted in November 1986 to establish the authority. In 1991, he voted
to increase sewer rates so the township could pay its share of the bonds. His
company had billed the authority $3,225,901 by mid-December and is budgeted
to earn $9.8 million on the sewer job.
According to Newell, the townships were worried about a conflict of
interest when they chose an engineering firm. They ruled out a Taylor
engineering firm because it already was working for Wayne County on Super
Sewer.
The authority “wanted an engineering firm in Washtenaw County because
there was quite a bit of negotiating to do with YCUA,” she said. Another Ann
Arbor firm was ineligible because it was working for Ypsilanti, Newell said.
Munfakh’s firm “was highly recommended and did not represent YCUA or Wayne
County,” said Newell.
“They beat us to get our fee down,” Munfakh said.
Munfakh said Breen convinced him to accept a 4.5-percent profit, half its
usual margin. The sewer project will account for 15 percent of his firm’s
income this year, said Munfakh.
Munfakh meets regularly with the sewer board and in the absence of chief
engineer Loud gives reports to the board.
He said he voted for the Plymouth Township sewer rate increase because he
felt a responsibility to make sure the township pays its debt.
Also without seeking bids, the authority awarded its contract for land
acquisition legal work to Breen’s brother, John Breen. They share an office
in Plymouth Township.
Although now a Wayne County commissioner, Maurice Breen still takes an
active part in authority affairs.
He defended the choice of his brother, saying that John Breen had
experience in acquiring land when he was legal director for Wayne County’s
Department of Public Works.
“John had retired from Wayne County and was just kind of looking for
something to do. We wanted somebody doing acquisition who would treat our
people in a kind manner . . . and did not charge us $250 an hour for legal
services.”
By mid-December, John Breen had billed the authority $51,005.
Former state Rep. Gerald Law took Maurice Breen’s place as Plymouth
Township supervisor and sewer commissioner last year after Breen became a
county commissioner.
Law’s brother, Robert Law, was secretary to the sewer board during its
first meeting in 1986. His legal firm represents all three townships.
Without seeking bids, the sewer board during that first meeting in 1986
named Robert Law’s firm to represent it and named him its lead attorney. Since
then, without bids, the board has awarded lobbying and public relations
contracts to firms connected to Law or his firm, Law, Hemming, Essad &
Polaczyk.
By mid-December, the legal firm had made more than $1.5 million from the
project, including a one-half-percent fee on both bond transactions, totaling
more than $900,000. The other firms took in more than $150,000. “We were
hired because of our background in this project and because of our working
relationship with the communities,” said Robert Law.
The board pays a $3,000 monthly retainer to Government Affairs Consulting
Group. Robert Law is the president of the firm, which also has offices in the
same building as Law, Hemming. By mid-December, Government Affairs had billed the authority $50,587 for lobbying services.
In 1988, when the sewer board needed to have proposals and news releases
written, the board, without seeking bids, awarded the contract to Power
Associates of Plymouth Township. Law said Power Associates was an affiliate of
the legal firm and has offices in the same building as Law, Hemming.
According to state records, Power Associates’ president is Michael Brice and
its director is Robert Law. By mid-December, Power Associates had billed the
sewer authority $20,000.
Another firm affiliated with Law, Hemming is Communications Management
Co., which had billed $61,624 for public relations work by mid-December,
Robert Law said. Communications Management is the new name for Power
Associates, whose name was not popular with clients, said the attorney. Yet
another public relations firm which he acknowledged was, until recently, a
Law, Hemming affiliate, is Strategies Plus, which had billed $27,371 by
mid-December. He said Strategies Plus is no longer an affiliate of the law
firm.
Michael Brice is president of Strategies Plus.
Law, Hemming partner Ernie Essad said he sees no problem with Robert Law
serving as general counsel of WTUA while his brother, Gerald Law, is its
treasurer.
“It’s nothing hidden, and everybody knows who everybody is,” said Essad.
“There are bar opinions which indicate that you are not automatically
disqualified as a result of that relationship.”
$611,876 lobbying bill
The biggest single consulting bill — $611,876 — has come from the
Washington, D.C., lobbying firm of Cassidy & Associates. The authority did
not advertise for bids for the work.
Cassidy bills WTUA $20,000 a month to lobby Michigan’s congressional
delegation to help get a $19 million federal grant. The money would pay for
pipes and a pumping system to carry treated wastewater to the Rouge.
The authority says that part of the project, recommended by the DNR, is a
unique national environmental demonstration.
Officials are hoping for a grant from the Army Corps of Engineers.
Maurice Breen said he’s “absolutely convinced” the project eventually will
receive federal money.
The authority has stressed environmental benefits of the sewer system. Its
plan to eventually pump 58 million gallons a day of treated wastewater from
Ypsilanti back to Canton for discharge into the lower Rouge has been termed a
“win-win situation” by Paul Zugger, director of the surface water quality
division of the DNR.
The authority proposes by November 1994 to send all of the Ypsilanti
plant’s treated wastewater to the Rouge. According to Newell, the water would
be cleaner than water now in the Rouge, and would stabilize streamflows.
But in October, U.S. Rep. John Dingell asked the corps to study the
effect of the project on residents of his 16th Congressional District, which
covers Monroe County and parts of Lenawee and Wayne counties, downriver from
the discharge.
Maurice Breen remains confident the townships did the right thing in going
it alone.
“We were willing to go into a system not so much for sanitary sewer needs,
but as an environmental project, even though it may cost more.”
To Edward Hustoles, director of planning at the Southeastern Michigan
Council of Governments, it’s no surprise the system is costing more.
“The idea of independence is a seductive one. That always sounds good, to
be our own bosses. They’re paying a price for independence.”
Caption: A worker surveys a sewer construction site at Joy and
Haggerty roads in Canton Township. The sewer project,
conceived as a money-saver for Plymouth, Canton and Northville
townships, will cost $94.5 million. Wayne County had asked for
$25.5 million for its Super Sewer.
Illustration: PHOTO DAYMON J. HARTLEY; MAP HANK SZERLAG
CHART
Edition: METRO FINAL
Section: NWS
Page: 1A
Keywords: ; SEWER; MAJOR STORY; SUBURB; WAYNE COUNTY
Disclaimer:
Yep, I remember that like it was yesterday.
So Joel, have you delved further into the story to determine if it was beneficial to the three communities? Have they saved the money as planned? Has this project contributed to a cleaner Rouge?
From what I’ve read, the Rouge is much cleaner based on the various types of flora & fauna that have been found in & near the watershed.
When this story erupted, I lived in Livonia, near the intersection of Hines Drive & Ann Arbor Trail. You seriously dreaded being caught by the red light if you were eastbound; it literally smelled like an unflushed toilet. I had reason to go past there the other day and it was a much changed atmosphere.
So Joel, I challenge you to check it out – now that WTUA is up & running are the cost savings living up to the promises? Is sewage disposal to WTUA cheaper than if Plymouth / Canton / Northville Townships had stayed with Detroit Water & Sewer? PLEASE let us know!!!
I did check it out, five years ago. In June of 2005, Detroit Free Press photographer Patricia Beck and I paddled a canoe 27 miles up the Rouge River from Zug Island to Nine Mile and Beech. You can read about it in our book: UP THE ROUGE! PADDLING DETROIT’S HIDDEN RIVER, published in March 2009 by Wayne State University Press. Yes, parts of the Rouge still stink where sewage is dumped in from municipal outfalls, and no, the Rouge was not swimmable in 2005. Given the failure of environmental agencies to systematically monitor water quality today, it is not advisable to have full or even partial bodily contact with water in the Rouge. UP THE ROUGE! is available at bookstores.
–JT
Quote Joel Thurtell: “I did check it out….”
Joel,
My question was: “now that WTUA is up & running are the cost savings living up to the promises? Is sewage disposal to WTUA cheaper than if Plymouth / Canton / Northville Townships had stayed with Detroit Water & Sewer? ” Your comments about water quality in Southfield, Dearborn, Detroit & other communities is not answering the question; I asked about COST SAVINGS – where do residents of WTUA communities stand in relation to the original promises?
Speaking of water quality, I, along with many anglers who utilize the Johnson Creek & other Rogue tributaries, would disagree with your comments as they pertain to water quality of the Rogue in this area. We are working to clean the water here, but still have no control over the ongoing & residual polution in other communities.
Dear nosleepatnite@yahoo.com:
If you want to figure out cost savings, do it yourself.
Our Free Press story in 1992 was about insider trading and self-dealing in the formation of the Western Townships Utilities Authority. Now we have running for state Senate Abe Munfakh, who was a Plymouth Township trustee and head of an engineering firm that profited from that 1990s scheme. His website boasts of his “rainmaking” abilities. One of the local newspapers dubbed the WTUA scandal “sewergate.” Your latter-day “cost-savings” apologetics will not change the fact that a few people in key positions achieved special benefits from public office.
As for Johnson Creek trout fishing, I discuss that subject in my book, UP THE ROUGE! PADDLING DETROIT’S HIDDEN RIVER, Wayne State University Press, 2009.
— JT