By Darren A. Nichols
The Detroit News
DETROIT — The Financial Advisory Board took its first step toward restructuring the city’s finances on Thursday by approving Mayor Dave Bing’s proposal to change union contracts.
The action calls for implementing a plan for $102 million in annual savings from unions that includes a 10-percent wage cut, as well as significant changes in health care and work rules. Most are similar initiatives to what was already agreed upon in tentative agreements with city unions, but were never implemented before the end of the fiscal year.
“The city has a tough challenge,” board member Darrell Burks said. “It’s not a significant difference from what the unions have already agreed to. We have a tough road to climb and we have to do it in a fair way.”
Union concessions are a big portion of the budget proposed by Bing and approved by the City Council. The budget for the fiscal year that began July 1 calls for $250 million in savings and cuts about a third of the city’s 11,000 member work force.
About 2,600 jobs are expected to be lost. It also called for 10 percent pay cuts for all employees, including police and firefighters, through renegotiation of contracts.
Most city contracts expired June 30.
Under a consent agreement with the state, the city was to impose new union contracts by Monday.
City officials will pitch the plan to the City Council at a session set for 1:30 p.m. Monday. The panel could then vote on it as early as Tuesday.
If it is not approved, the Financial Advisory Board would have the ability to implement the plan.
“This is a huge step in the right direction,” said Council President Pro Tem Gary Brown. “We’re trying to change work rules, implement economic conditions on employees that will allow the city to survive so we don’t go into bankruptcy.”
Ed McNeil, president of AFSCME Council 25, the city’s largest union, could not immediately be reached for comment.
City officials had reached tentative agreements with a coalition of unions and the Detroit Police Officers Association. But state officials wanted to scrap the deals, saying the cuts weren’t deep enough. Both contract deals were reached before the council approved the consent agreement April 4.
“We were adamant about getting labor on the table because we have contracts (and) many of them expired on June 30, so we’re already behind in terms of the savings,” said Financial Advisory Board Chairwoman Sandra Pierce.
“We think it’s fair and a (good start). It’s a good first step and we need everybody’s help here.”
Added board member Ken Whipple: “There are many more steps that have to be done that I hope we’ll do in the same way, in the interest of fairness, improving the quality of life for the citizens and improving the infrastructure of the city.”
Some at Thursday’s meeting continued their opposition to the consent agreement.
Activist Sandra Hines appeared before the panel, saying the board is meeting illegally.
Her arguments are the same as those of city attorney Krystal Crittendon, who has challenged the validity of that agreement in a lawsuit.
The lawsuit said the agreement was void because the state owes $4.7 million in water bills, has outstanding parking tickets and owes $224 million in past revenue-sharing payments.
“I’m asking you people to stop what you’re doing because what you’re doing is lawless and unconstitutional,” Hines said.
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