Demonstration in front of Bank of America in downtown Detroit demanding a moratorium on debt service payments by the city government. Detroit taxpayers turn over $597 million annually to the banks. (Photo: Abayomi Azikiwe), a photo by Pan-African News Wire File Photos on Flickr.
July 12, 2012
Financial board signs off on Detroit cuts, 10% decrease in city workers' pay
By Matt Helms and Suzette Hackney
Free Press Staff Writers
In its first major action on righting the city’s finances, Detroit’s financial advisory board Thursday approved Mayor Dave Bing’s plans for $100 million in cuts to the city’s unionized workforce — including a 10% pay decrease, higher out-of-pocket healthcare costs and limits on overtime — that his administration is expected to impose without negotiations.
The wage reduction would also apply to police and firefighters, a cut that Bing has long sought. In addition, workers would move into an 80-20 health plan with higher co-pays and higher costs for brand name and generic prescriptions.
The city’s 10-page summary of the plan was released Thursday at a meeting of the financial advisory board, made up of city and state appointees charged with righting the city’s finances.
Darrell Burks, a member of the board, said the City Council still must approve the cuts. And more are expected, including ending retiree vision and dental coverage in 2013.
Union leadership called the proposal an attack on labor.
“It’s an attempt to backdoor a right-to-work environment within Detroit municipal government,” said Greg Murray, vice president of the Senior Accountants, Analysts and Appraisers Association. “It’s agreessive in nature and takes you back to the ‘40s and ‘50s and contains all the things that helped give rise to the union movement.”
But the reductions may not have been as deep as some workers feared after Bing and the council set aside tentative agreements reached with many of the city’s unions before Detroit entered into a financial stability agreement with the state April 4 to prevent appointment of an emergency manager.
“I don’t think there’s a significant change in what was recommended today and what was agreed to with the unions early on,” Burks said. “I think it’s a good first step.”
City Council President Pro Tem Gary Brown said the people working to pull Detroit out of its dire financial crisis understand the concessions the city demands will hurt city employees. Still looming large over the city’s 11,000-member workforce are layoffs of up to 2,600 employees that could begin in early August.
Under the consent agreement, Bing will be able to impose the cuts on city unions whose contracts expire. About half expired June 30, the end of the city’s fiscal year, ahead of a new year in which the city is operating under a budget that Bing and the council slashed by nearly $250 million.
“They’re very broad cuts that are going to affect everyone — retirees, sworn personnel, non-sworn personnel, everyone,” Brown said. “It’s going to be a tough pill to swallow, but in my opinion it’s absolutely necessary.”
Burks said the pay cut for many unionized workers will take the place of furloughs implemented in previous years, meaning workers will get the pay cut without the time off. But the proposal leaves open the possibility of addition furlough days.
Burks said the cuts will initially only impact about half of the city’s unions working under expired contracts; the cuts will not take effect for the remainder until their contracts expire at various times in 2013.
Brown said the City Council will meet Monday to hear details on the plan from Bing’s staff and could vote to approve it as early as Tuesday.
The approval of the cuts was the board’s first major action since the nine-member body was formed with appointees of Bing, the council, Gov. Rick Snyder and state Treasurer Andy Dillon. Under the consent agreement, the board has major power over the city’s finances as Detroit works to shed its chronic deficits and enormous long-term debts.
The cuts also include reducing the amount of vacation time city workers can accumulate to 160 hours from 320, ultimately requiring the workers to take their vacation time in the year it is earned, Burks said.
“You take it or you lose it,” as many private sector workers do, he said.
The city also proposed implementing reduced pension and overtime calculators and changes in work rules — policies that govern what tasks can be assigned to unionized workers — to allow managers greater flexibility.
For example, under the new rules the Detroit Police Department would be able to hire civilians to perform any job that doesn’t require sworn officers.
Meanwhile, Bing’s outside lawyers filed an emergency motion Thursday asking a judge to stop Krystal Crittendon, Detroit’s lead city attorney, from representing the city in a lawsuit scheduled to be heard this morning before Wayne County Circuit Judge Amy Hathaway.
Three Detroit residents filed suit on many of the same grounds Crittendon has cited in challenging Detroit’s fiscal stability agreement with the state as a violation of state law and the city charter. They argue that Detroit can’t enter into contracts with the state because Michigan owes the city $224 million in revenue sharing and a nearly $5 million water bill.
The Miller Canfield firm, which Bing hired after unsuccessfully trying to oust Crittendon, argues that she can’t represent the city’s interest in the residents’ lawsuit at the same time she has challenged the consent agreement.
Crittendon’s challenge was twice turned away by an Ingham County judge, but she has not said whether she will appeal. She declined comment Thursday.
Contact Matt Helms: 313-222-1450 or mhelms@freepress.com
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