05.20.14

The Straddle. The Detroit Police Officers Association (DPOA) has filed an objection to the Motor City’s proposed plan of adjustment, stating that the union and its members “stand squarely on both sides of the feasibility issue,” with the union’s attorney noting: “On the one hand, they strongly support the city’s restructuring efforts to aid them in their ability to provide the city’s residents, businesses and visitors with more effective police protection…On the other hand, the DPOA’s members are creditors of the city, who, as a result of the freeze on their accrued pension benefits and the proposed new (Police and Fire Retirement System) pension formula, face additional and significant cuts to their pension benefits—a critical condition of their employment, since city police officers lack the protection of Social Security for retirement or disability.” The union added that Detroit and the state of Michigan have used the state’s emergency manager law and a stay on lawsuits against the city in Chapter 9 bankruptcy to evade a common method of resolving disputes — arbitration — in what would “otherwise be a readily resolvable impasse with the city as to economic terms of a collective bargaining agreement,” adding that the Motor City is punishing the DPOA for not coming to an agreement, and that the federal bankruptcy code cannot be used to either impose lesser terms on the union compared to city unions that have agreed to settlements, or to strip it of rights to bargain employment conditions: “The city is certainly entitled to present DPOA with a last best offer in order to reach an agreement with them, and where an agreement cannot be reached, to exercise its claimed right to impose terms the Emergency Manager deems appropriate…What the city cannot do is to punish DPOA members with a significantly less generous pension benefit than those benefits received by others in their class because they were unable to reach agreement.” The scorecard, so far, posts that Detroit has reached agreements with an official committee of retirees and a coalition of 14 of Detroit’s 48 unions, including the city’s largest, the American Federation of State, County and Municipal Employees Council 25; but the city has not reach agreement with its two major public safety unions, the DPOA and the Detroit Fire Fighters Association; moreover, despite four months of extensive mediation talks, there appears to have been little progress toward an agreement. The DPOA claims that Detroit’s current plan “provides substantively different treatment for active public safety employees whose bargaining units have reached tentative settlements and those who have not,” particularly with regard to pension benefits.

Trying to Rebuild the Motor City. U.S. District Judge Gerald Rosen, who heads up the mediation effort in Detroit, yesterday announced that the Michigan Building and Construction Trades Council, which represents a broad-based consortium of unions in Michigan’s building and construction industry, has agreed to contribute cash towards Detroit’s grand bargain to help the city emerge from bankruptcy, stating that the Trades Council will make “material contributions” towards health care costs for Detroit’s retirees. While the official statement does not include a dollar figure, the announcement marks the first time that a union or union group has made a commitment to contribute direct funds to city’s restructuring plan. The agreement, the Detroit Free Press notes, is additional proof that the mediation sessions, led by Judge Rosen, have been pivotal in helping the city break through difficult political and financial hurdles in negotiations with creditors—with Michigan House Speaker Jase Bolger (R-Marshall) noting the announcement marks “a huge step forward” that could provide momentum towards other unions stepping forward, adding: “I appreciate the leadership and the efforts made by Chief Judge Rosen, the mediators and union leadership …This huge step forward will help Detroit’s retirees while we work to help bring the city out of bankruptcy quickly.”

Seeking a Crash Landing. Americans for Prosperity has begun a campaign to scuttle efforts in Lansing for passage of the so-called “grand bargain” next month in the legislature, claiming, in one ad: “Detroit has received financial help and special treatment from state lawmakers time and time again. Unfortunately, like giving in to a spoiled child’s demands, all this help seems to have perpetuated rather than solved the problem.” The group adds that “More money can’t fix Detroit.” The group offers no proposed solutions to the Motor City’s bankruptcy. Instead it is focused on a campaign to contact 90,000 conservatives in Michigan and urge them to rally against the bipartisan, bicameral plan to provide $195 million in state funds to help ensure no retiree’s family is forced below the federal poverty level. The group has threatened to run ads against members of the Republican-controlled Legislature who vote in favor of the appropriation before Michigan’s August primary—with the state chapter leader claiming that using public money for Detroit’s case would be “very toxic.”

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