Michigan court blocks pay cut for Detroit police

Reuters News
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Posted: Aug 16, 2012 3:25 PM
Michigan court blocks pay cut for Detroit police

(Reuters) - A Michigan judge on Thursday temporarily blocked Detroit from imposing a pay cut and other measures on its police officers as part of a plan to save $102 million a year for the cash-strapped city.

Wayne County Circuit Court Judge John Murphy approved a request by the Detroit Police Officers Association for a temporary restraining order, citing in part the suspension earlier this month of Michigan's 2011 emergency manager law.

Public Act 4, which would give the State greater control over struggling local governments, was suspended pending the outcome of a state-wide vote on November 6 on whether it should be repealed.

A financial stability agreement between the city and Michigan in April is based in part on the suspended law, which enabled state-appointed emergency managers to temporarily suspend collective bargaining pacts.

While the agreement gave Detroit some state oversight, but not an emergency manager, it allowed Mayor Dave Bing to disregard collective bargaining with the city's 48 unions and impose 10 percent pay cuts, work rule and benefit changes, and other measures on workers last month.

Donato Iorio, an attorney for the police union, said the order stops the immediate imposition of a pay reduction and 12-hour work shifts for police. He added the judge has scheduled a hearing on granting a preliminary or permanent injunction against Detroit for Wednesday.

The judge's order cited the fact that after its contract expired at the end of June, the police union requested binding arbitration for a new contract under a law that specifically requires the city to maintain the status quo in terms of wages and work conditions for the duration of the arbitration process, according to Iorio.

The judge also noted public safety concerns in his order, which was issued on the same day $123 million of revenue bonds were priced for Detroit in the U.S. municipal bond market. The bonds were issued through the Michigan Finance Authority to raise money for the city's near-empty coffers.

A shrinking population and declining revenue have left Detroit with a $260 million cumulative budget deficit and a huge $7.9 billion long-term debt burden that includes bonds, employee pensions and retiree healthcare liabilities.

A spokeswoman for Bing did not immediately have a comment on the judge's order. Spokesmen for Michigan Treasurer Andy Dillon did not immediately respond to a request for comment.

Bing contended earlier this month after the act was certified for the ballot that the suspension of Public Act 4 ahead of the repeal vote and the substitution of a former and weaker emergency manager law would not impair the financial stability agreement or his plan to save $102 million through the wage cuts and other measures.

(Reporting By Karen Pierog; Editing by Theodore d'Afflisio)