Friday, January 25, 2013

Detroit's Corporate-backed Mayor Imposes Greater Austerity Measures on Municipal Workers

January 25, 2013

Bing: State to release $20 million in bond funds for Detroit

Detroit — Mayor Dave Bing's office on Friday announced the city has reached an agreement with the state to release $20 million in bond funding to help Detroit's financial restructuring.

"We have come to an agreement with Lansing on the release of $20 million held in escrow by the state," Bing said in a released statement."The release of these funds will occur at my discretion."

The release means Detroit has received the full $30 million in bond funding that has been withheld while the city works to meet certain benchmarks required under its consent agreement with the state.

The city has made progress on the consent deal in recent weeks by approving contracts for legal work and organizational restructuring. The city council also approved Bing's request to remove Corporate Counsel Krystal Crittendon, who had challenged the validity of the agreement.

Terry Stanton, a spokesman for State Treasurer Andy Dillon, said the state will begin the process of sending the funds to the city once it receives an official request.

"The city is substantially in compliance with the milestones" spelled out in a memorandum of understanding between Detroit and the state, Stanton said in a released statement. "We have not received such a request at this point."

Also Friday, the City Council approved a plan to impose furlough days for non-union employees in an effort to cut costs.

The proposal that passed by a 6-3 vote calls for savings of 10 percent through the furloughs. It becomes effective in February.

The cost-saving effort is among several proposed to stave off a $90 million deficit and avoid the potential of a state-appointed emergency financial manager.

Bing in a statement issued late Friday said the furlough is expected to impact about 1,250 non-union workers, with no disruption in city services. It will equate to about $500,000 in savings to the city's general fund, he said. The furloughs could start as early as Feb. 11, city officials said.

Bing said his office originally requested City Council approve furloughs of one day per week, or 20 percent of compensation.

"However, the Council's approval of one day per pay period, or 10 percent of compensation, is adequate at this time," Bing said in the statement.

Friday's vote comes after the council approved a separate proposal last week to freeze non-union workers' pension contributions for a year.

Freezing the city's pension payments for one year would save about $25 million if it's implemented for all employees.

Council members have said they're working on a separate ordinance that would allow workers to accrue service credits for their pensions, despite the freeze.

Also last week, council approved a resolution in support of Bing's plan to increase employees' health care co-pays from 20 percent to 30 percent. The plan, which is not expected to be effective until October, will not impact this year's budget.

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