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2500 lay-offs, department shutdowns, draconian “contract” imposition underway

By Diane Bukowski ~

In the world’s largest Black-majority city outside of Africa, with the nation’s highest poverty rate, over 2500 City of Detroit workers are being laid off. The city’s federally-funded health, human services and workforce development departments are being handed over to private entities.

Meanwhile, a draconian “City Employment Terms” (CET) contract is being imposed on the remaining workers, under orders of the city’s new state and corporate Public Act 4 rulers.

Over half of Michigan’s Black residents are living under the dictatorial rule of unelected emergency managers or “consent agreements” established under PA4. Wall Street has threatened to further downgrade ratings on the municipalities’ huge debt loads if anti-poor austerity measures are not put in place.

Detroit’s Chief Operating Officer (COO) Chris Brown, Program Management Director Kriss Andrews, Chief Financial Officer (CFO) Jack Martin, and Labor Relations Director Lamont Satchel, along with Police Chief Ralph Godbee, presented the CET package to City Council July 16.

Brown, a former DTE Energy executive and international privatizer, said, “Things are not the same. It may not be fair, but it’s necessary. The market is not providing these services anymore.”

Neither Mayor Dave Bing nor Deputy Mayor Kirk Lewis were at the table. Insiders have said Brown is calling all the shots, becoming the city’s first defacto white mayor since 1973.

“It’s Doomsday,” CFO Jack Martin said.. “No matter what happens with Public Act 4, the bottom line is that we are running out of cash and we don’t want to file bankruptcy. We may have to shut down parts of the city. The only way we can survive and prosper is to take actions like this.”

Martin previously served under President George W. Bush as CFO of the Department of Education, pushing the pro-charter school No Child Left Behind Act. He did not produce any financial documents detailing evidence of projected cash flow shortages.

“All the time, you are talking like the sky is falling and there are going to be payless paydays,” Sheila Pennington, President of AFSCME Local 1023, told the five.

“We went to the table with you, Chris, and you, Chief Godbee, and negotiated a tentative agreement to save the city money, but it didn’t see the light of day. You have torn apart and destroyed our contract without any input at all from us. We have NOT lost the right to collective bargaining. This is WRONG, DIRTY AND LOW DOWN.”

The Council presentation was the first time the city’s union leaders had even seen the CET.

“People are dying out here!” Joseph Barney, an Emergency Medical Services technician and union representative, said. “EMS is killing them because we can’t get to them. There are no ambulances at all in southwest Detroit. We are 60 technicians below budget. This is not a collective bargaining agreement. It’s nothing but getting rid of the workers while you still have too many managers.”

City Councilwoman JoAnn Watson, a staunch opponent of PA4, declared, “Folks are acting like Michigan has a right-to-work [anti-union] law in effect. It does not. Detroit is the home of organized labor. This package throws all respect for the legacy of the unions out the window.”

She raised the issue of Detroit’s huge debt load. The city paid over a half-billion dollars to the banks in 2011-12, and carries a total debt of more than $12.6 billion. Some community leaders have called for a moratorium on the debt or even cancellation. Watson concurred.

“Why was there no effort to re-negotiate the city’s huge debt load to Wall Street bondholders who got bailed out by the taxpayers to the tune of trillions of dollars?” she asked. “You want to get tough with the working class, but you won’t confront Wall Street. Power concedes nothing without a demand.”

The CET includes a 10 percent wage cut and other severe financial cuts, including the loss of raises and pay increments, a guaranteed lunch hour, longevity pay, and sick and vacation days.

“We are looking at the possibility of more reductions in force, significant reductions in overtime, and using selective furlough weeks,” Andrews said. “We are going to re-evaluate retiree health care coverage as a whole. We retained a third party actuary to deal with things in the most ‘humane’ way.”

Andrews was most recently CFO at Energy Conversion Devices, which filed for bankruptcy in February. He, like Brown, has had no prior experience dealing with the public sector.

The CET also dictates a 20 percent annual premium co-pay on health care, elimination of seniority rights in promotions and transfers, work rule changes at the city’s whim, and cuts in union representation rights.

It includes a major assault on retirees and city pension plans, including elimination of early retirement and dental and vision care after Jan. 1, 2013, and the possible elimination of the pension system as a whole for new employees. Also possible is a private takeover of the $6 billion system, proposed two years ago by Mayor Dave Bing.

The CET allegedly will save the city $102 million in labor costs. A coalition of city unions earlier bargained a contract that would have saved the city $180.2 million, according to its chief negotiator Ed McNeil, but Gov. Rick Snyder and State Treasurer Andy Dillon would not agree to let the Council finalize it.

The city’s nine-member PA4 Financial Advisory Board (FAB), made up of corporate and banking executives, vetted and approved the CET with State Treasurer Andy Dillon, Brown, Andrews, and Satchel present, prior to the Council hearing. McNeil said Dillon told him that Jan Winters, Snyder’s appointee head of the Office of the State Employer, oversaw the drafting of the package.

Although the City Council voted 5-4 to reject the CET July 17, city representatives claim the FAB can impose the contract regardless of the Council’s vote.

They repeatedly insisted that the “duty to bargain has been suspended” under PA4. However, Attorney Richard Mack, representing AFSCME, cited the City Charter, as well as three clauses in the state’s Public Employee Relations Act which requirecollective bargaining and were not suspended under PA4.

“In the next 30 days that the consent agreement gives you, have Corporation Counsel Krystal Crittendon look at specific sections of state labor law that say that the city still has to bargain with the unions,” Mack told the City Council. “You made a mistake last time not getting her advice.”

The City Council did not consult Crittendon before it approved the consent agreement April 4, the anniversary of Dr. Martin Luther King, Jr.’s assassination. She has since sued the state to overturn the agreement, saying the state owes the city over $307 million. Under both state and city laws, municipalities cannot contract with entities in default to them.

Her lawsuit was dismissed by a state Court of Claims Judge, but she currently has several weeks to appeal the dismissal.

Mack and AFSCME Council 25 asked Crittendon to review the proposed CET and issue a legal opinion, in a letter sent to her and City Council.

“With this letter, the Coalition of Detroit Unions formally asks you, Madam Corporation Counsel, to issue a legal opinion indicating that the City of Detroit may not impose employment terms on its unionized workforce, because of the city’s duty to bargain with the unions,” the seven-page letter begins. “This duty is found expressly in the City Charter . . . . If the leadership of the City refuses to comply with your opinion of an existing duty to bargain, we then ask that you seek ‘judicial action’ to require such bargaining. Charter 7.5-209.”

SAAA Vice-President Greg Murray summed up the current state of affairs.

“This is tyranny, a way to pay the corporate interests first. When will Detroit’s greatest assets—its people—be used? We didn’t vote for this consent agreement. Stop this subjugation! This 21st century document amounts to indentured servitude, taking the city back to the 1800’s.”