Detroit mayor touts concessions; pressure builds

Reuters News
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Posted: Feb 02, 2012 2:53 PM
Detroit mayor touts concessions; pressure builds

DETROIT (Reuters) - Detroit Mayor Dave Bing gained momentum in his fight to convince state officials that the financially crippled city does not need a state takeover as he reached a tentative cost-cutting deal with about half the city's 48 unions.

Bing, in a statement issued on Thursday, hailed the tentative agreement forged Wednesday night with AFSCME, the public-sector union, as "the first meaningful step in achieving the necessary concessions and structural changes to resolve the city's financial crisis." The deal would impact about 3,200 workers, or a third of the city's headcount.

Bing, who has said Detroit will run out of money by May without significant givebacks from unions, declined to provide details of the deal. Union officials could not be reached for comment on the tentative deal, which is subject to ratification by the workers.

But even as Bing praised a deal that he said was not "just about concessions...it's about how labor and management can work together in a fair and constructive way," the future of Detroit, Michigan's largest city, remained uncertain. Many on the nine-person city council consider Bing's $102 million cost-cutting plan insufficient.

The agreement, which does not cover uniformed workers -- such as police and fire personnel -- fell shy of the January 31 deadline that Bing had initially set for agreements with all of the city's 11,000-plus workers. City council members have said that union agreements that do not include hefty concessions from uniformed personnel will fall short.

In addition, Bing must lower the cost of annual health-care and pension costs paid to Detroit's 22,000 retirees.

Amid Detroit's struggles to revamp its finances, Michigan Treasurer Andy Dillon is leading a review of its books. Dillon has less than a month to make a recommendation to Governor Rick Snyder on whether Detroit needs to join Michigan's six other public entities - including the cities of Flint and Pontiac - that are already under the leadership of an emergency financial manager.

Detroit has suffered a staggering population decline in recent years, causing its revenue base to shrink. And companies that once paid hefty taxes, including General Motors Co, have lowered their presence in a city that was long synonymous with the auto industry.

In recent days, the city council has been crafting a cost-cutting plan that includes a set of actions decried by Gary Brown, the president pro-tem of the council, as "draconian."

Bing and the city council would lose much of their power if an emergency manager were appointed.

In an interview last month with Reuters, Snyder, the governor, said he prefers a so-called consent agreement over an emergency manager. Such an agreement would have state-mandated targets that would need to be met by city leaders in an agreed timeframe.

But Snyder has left the decision on an emergency manager to Dillon, who has not given public comment on the issue in several weeks.

The City council's deeper cost-cutting plan includes a proposal to shut down all of Detroit's recreation centers, levy a new $300 garbage fee, suspend EMS services, and close the health department. City council expects some of these actions would be included in a consent-agreement if one is created.

Even without these additional cuts, the city's services are deteriorating.

On Friday, for instance, one of the city's four public health clinic, the Herman Kiefer clinic on Detroit's west side, will close its doors as part of a $2.5 million downsizing of the health department. The more than 2,000 people who use the facility will be directed to a clinic about a mile and a half away.

During a meeting on Monday, health department officials were heavily criticized by members of city council who were outraged over the department's failure to secure federal funding for the clinic. A family planning office and substance abuse recovery center will remain open at the Herman Kiefer complex thanks to federal funds.

(Reporting By John D. Stoll; Editing by Leslie Adler)