Detroit unions reject talks on state plan

Reuters News
Posted: Apr 02, 2012 3:13 PM
Detroit unions reject talks on state plan

DETROIT (Reuters) - Detroit's unions will not negotiate more cost-cutting agreements with the city if it agrees to a state-mandated financial plan designed to stop Detroit from running out of money, the head of a major city union said on Monday.

The financial stability agreement drafted by Michigan Governor Rick Snyder's administration would require significantly deeper concessions from city unions than have already been agreed to.

A tough stance by union officials could make it much more difficult for city leaders trying to fix Detroit's fiscal crisis without the intervention of a state-appointed emergency manager, who has far more legal dispensation to make unilateral changes to contracts.

Most of the city's labor contracts expire June 30. The proposed consent agreement financial plan with the state of Michigan calls for significant changes to Detroit's multiple labor agreements.

The plan is likely to be imposed by Snyder and would mean implementing far more uniformity among contracts, as well as additional outsourcing, alterations to health care agreements and rewriting work rules.

Unions completed concession negotiations with Detroit over a month ago and have no intention to resume talks based on Snyder's plan.

"As long as I am president we will not be back at the table prior to the expiration date of our contract," Albert Garrett, president of AFSCME Council 25, told Detroit's city council.

The American Federation of State, County and Municipal Employees represents about half of the city's unions, and a third of the city's employee headcount.

Snyder's plan is an effort to save Detroit from running out of money in May. City council members are slated to vote on it early this week, ahead of an April 5 deadline. Once a plan is in place, city officials would be required to go back to unions to once again negotiate cost reductions.

Garrett's comments follow on the heels of a sweeping effort by Mayor Dave Bing's administration to forge concession agreements with the city's 48 unions after deep financial problems came to light late last year. Those agreements, aimed at saving the city $68 million a year, were recently ratified, but were criticized by Snyder as being insufficient.

On Friday Detroit labor unions filed a complaint against Snyder and State Treasurer Andy Dillon in federal district court asking for a temporary restraining order prohibiting the state or city from taking action on a consent agreement that would impair tentative labor agreements unions ratified last month.

A response filed by Michigan's attorney general challenged the request, saying the unions were not likely to succeed on the merits of their case and there is no impairment of contracts as Detroit has not formally accepted the agreements with unions.

A judge scheduled the hearing on the temporary restraining order request for 2 p.m. ET on Tuesday.

Snyder's consent agreement is aimed at allowing elected city officials to continue running the city, but with additional help. If the agreement fails to produce desired results, he could appoint an emergency financial manager.

The consent agreement has been a controversial subject in Detroit. The agreement, drafted largely by the state treasurer in discussions with city leaders, imposes strict financial controls on city operations and requires outside leaders to work with Bing on restructuring how the city is run.

Union officials, including Garrett, said they have confidence in a public movement to limit the governor's ability to intervene in financial problems in many Michigan cities.

Michigan election officials are in the process of verifying signatures on petitions aimed at placing a repeal of Michigan's Public Act 4 emergency manager law on the November ballot. If the measure is certified for the state-wide ballot, the law would be suspended and a former law that gave state-appointed managers less power to make changes would take its place in the interim, according to Michigan's attorney general. Public Act 4, which allows emergency managers to void collective bargaining agreements and replace local elected officials for the duration of the fiscal emergency, is also facing a constitutional challenge in court.

(Reporting by John Stoll and Karen Pierog; Editing by Tiziana Barghini, James Dalgleish and Dan Grebler)