Wednesday, February 01, 2012

Corporate Press Claims Detroit Mayor, Unions Have Reached Concessions Deal

Detroit Mayor Dave Bing, unions reach tentative deals

February 1, 2012

Detroit Mayor Dave Bing is seeking to cut $102 million from this fiscal year's budget. By

Suzette Hackney and Steve Neavling
Detroit Free Press Staff Writers

Detroit Mayor Dave Bing's administration has reached tentative agreements -- contracts with substantial worker concessions -- with a significant number of the city's 48 labor unions in a down-to-the-wire effort to ward off a state-appointed emergency manager, according to people close to the negotiations.

Labor leaders said Tuesday that 25, slightly more half of the city's bargaining units, have reached tentative agreements. However, administration officials would not confirm that number.

The city has been unable to negotiate as much savings as Bing had hoped, but the concessions on health care and prescription drugs are substantial, according to people close to the negotiations. Bing is seeking to cut $102 million from this fiscal year's budget to help avoid the state taking control of the city.

Union leaders said they agreed to a savings of $20 million a year alone on prescription drugs by finding a new provider.

The biggest long-term savings targets the ballooning pension costs. Under the tentative agreements, new employees would be largely responsible for paying into defined-contribution plans, much like a 401(k).

Currently union members have defined-benefit plans, financed largely by taxpayers. Still, the pacts are anything but certain.

Labor leaders said they won't seek ratification by their members unless defiant police and fire unions also approve concessions. And rank-and-file members, most of whom accepted 10% wage cuts nearly three years ago, would still have to approve the deal.

Late Tuesday, the administration released a statement offering few details about the ongoing talks. Negotiations were expected to last into the night.

"Mayor Bing has met with key members of the major unions, both uniform and nonuniform, today," the statement said. "Negotiations are ongoing."

Although tentative agreements could be a victory for Bing, they may not contain the cost savings needed to solve the budget crunch alone. Some council members say the union concessions are not enough, and are proposing deeper cuts, including closing all of the city's recreation centers, privatizing ambulance services, increasing bus and garbage fees and reducing the salaries of employees making more than $100,000 by 15%.

The council has suggested cuts that members hope Bing will include in his final financial restructuring plan that will be presented to Gov. Rick Snyder.

City officials don't want to present two plans to Snyder -- a Bing plan and a council plan -- because such a move would give the state the impression of divisiveness and leadership deficiencies.

The Michigan Treasury gave city leaders until early February to reach concessions.

Snyder appointed a 10-member financial review team that has been examining the city's finances. Under a law backed and signed by Snyder in March, the review is another step in a process that could lead to the appointment of an emergency manager.

Alternatively, it could lead to a consent agreement under which local officials receive increased powers and agree to take certain steps to right the city's finances.

A meeting to discuss proposed council reductions Tuesday ended because not enough council members were present. Five of the nine council members are required in attendance to hold a public meeting of the full board. But three council members had scheduled meetings with the financial review team.

Without full union concessions, the state is expected to appoint an emergency manager or urge the council and mayor to use a consent agreement to privatize services, restructure government and impose a contract on employees when most of the union contracts expire June 30.

After learning that some of the city's 48 unions appear likely to tentatively approve landmark concessions, council members expressed cautious optimism that some services could be saved.

"The more concessions we get, the more we can scale back some of the recommendations" for cuts, City Council President Charles Pugh's spokeswoman Kirsten Ussery said. "Concessions will help with the immediate cash crisis, but there is no way to avoid some of these tough decisions that council will have to make."

Ratified union contracts could limit the divisions among council members who can't agree on the severity of cuts needed to ward off an emergency manager.

Council members Kwame Kenyatta and JoAnn Watson said Tuesday they were uncomfortable with some of their colleagues' recommendations for more than $100 million in cuts.

"At this point, I'm not voting for this," Kenyatta said, without offering alternatives. "Until we have a vote, we don't have a plan. I don't think even the majority at the table would support this."

Councilman James Tate said he was encouraged by word of the tentative agreements, and called the negotiations unprecedented, particularly in such a short period. The administration has been in talks with the unions since November.

"I am aware that the clock is ticking and action has to be taken quickly," Tate said.

Tate said the council is aware that cuts will have to be made if union concessions aren't enough, but there is a limit to slashing services without viable options. Take recreation, for example.

"I don't have a problem with us getting out of the recreation business, but we have to provide an alternative for the community or at least foster relationships with others who can fill in the gaps if we can't provide that service," he said.

Contact Suzette Hackney: 313-222-6678 or

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