FROM: DETROIT CONCERNED CITIZENS AND RETIREES (DCCR)
Retirees demand pension board ask for Judge Rhodes removal due to conflict of interest
Detroit — On April 23, 2014, May 1, 2014 and May 7, 2014 a group of concerned citizens and retirees attended the Pension Board Trustee Meeting(s). During public comments the trustees were asked “why” they had agreed to the Bankruptcy Plan of Adjustment dated 4/16/2014. The only individuals that spoke during this meeting were Michael VanOverbeke, Pension Board Legal Counsel and Rev. Wendell Anthony, community representative, all other trustees were silent. Mr. VanOverbeke stated that the trustees had not voted or agreed to the plan.
He further stated that they had only supported the economic issues like (1) 4.5% reduction in pensions, (2) up to a 20% claw-back and (3) elimination of cost of living adjustment (COLA). Mr. VanOverbeke emphasized later that support and approval are two different things legally, and that the pension board had not voted to approve. Sounds like splitting of hairs. He also stated that the board were trying to get the best deal and the final vote or decision was up to the retirees.
Rev. Anthony echoed Mr. VanOverbeke’s statements, but further stated the media had misrepresented the actions of the pension board. During the discussion between the board and retirees it was unclear whether they had supported only the 4.5% or all three economic items stated above. The retirees requested a copy of the minutes from the 4/16/2014 GRS Pension Board Meeting and submitted a request Freedom of Information Request Act (FIOA) for the minutes over the last year. “See minutes attached received today” (link below). The following are issues presented to the GRS Pension Board by retirees:
- 95 million spent by Kevin Orr (EM) on consultants and 5.5 million spent by Mike Duggan on new staff while retiree’s pensions are cut.
- State cut of $732 million in revenue sharing to Detroit, millions in tax abatements to millionaires/billionaires, while retirees are cut.
- No guarantee of future cuts or changes in plan of adjustment.
- Pension board will be run by outsiders, 5 of who will be appointed by the mayor from a list provided by the governor.
- No active city employee, family member, contractor or union member can be a trustee.
- Retirees requested a general meeting of all retiree before voting ballots are sent out to discuss the details of the Bankruptcy Plan of Adjustment
- Retirees demanded that the pension board not agree to cuts to our pensions.
- Retirees stressed that the bankruptcy court is rushing to conclude Detroit bankruptcy plan before the Sixth Circuit Court of Appeals rule on whether it violates State constitutionality of pension protection (10th Amendment US Constitution, Section 903 of Bankruptcy code) and Federal law protecting contracts.
See article below briefly covering meeting “Plan Elements Still Fluid”
From The Detroit News: http://www.detroitnews.com/article/20140424/METRO01/304240035#ixzz31ENfLWaM
On May 7, 2014, retirees inquired about the national support Detroit retirees had received from AARP, California Pension Plan and Texas Pension and public employees. These plans represent over 2 million people and are worth over 2 trillion dollars. This is powerful support! Rev. Anthony stated that the pension board had solicited the support from these groups. However, very little has been stated by the pension board of this support. The local corporate media will not be balanced or tell the whole story. See attached articles, copies of brief are included:
Diane Bukowski discussed her official objection to Judge Steven Rhodes’ participation in a pro emergency manager conference before he was appointed as judge in the Detroit Bankruptcy case.
Charles Moore of Conway Mackenzie, a financial expert witness in this case for Kevyn Orr, also attended this one-sided conference, along with Judy O’Neill, a co-author of Public Act 4, and others who spoke in favor of Chapter 9 Bankruptcy and emergency managers. Diane Bukowski EARLIER asked that judge Rhodes recuse himself due to this conflict that has not been disclosed. See link to article on this issue and Diane’s official objection with the court below. Diane Bukowski demanded that the pension board file an objection to this conflict of interest. This is a bombshell, maybe this is why Judge Rhodes is being conveniently replaced by Mark A. Random.
The legal counsel for the pension plan stated that the city was paying about $180 million for health care, that cost has been reduced to $40 million. This is a 78% decrease in health care cost primarily due to dropping retirees. This saving has and will change the city’s financial state.
The 4th Detroit Bankruptcy Plan of Adjustment was submitted Monday 5/5/2014. All active and retired City of Detroit Employee should weigh the “pros and cons” of voting yes or no. Indicated below is just a brief comparison, added your pros and cons:
Bankruptcy Voting Pros and Cons
|Pros – YES||Cons – NO|
|Fearful of press reports that deal will get worse||Judge must rule on City’s actual financial status not propaganda from Snyder, Orr or Media|
|You believe your pensions were not earned||Employees paid into the plan and their funds were used for investments (annuity savings)|
|You believe Orr that federal law trumps state law||US constitution 10th amendment recognizes state’s right-Section 903, trumps is a false issue.|
|The courts are on Snyder and Orr’s side.||Pension Plans are protected by the State constitution, “not to be diminished or impaired”|
|Snyder, legislature, and corporation will give money to GRS and PFRS, 350 million||Only an elected official can file bankruptcy, not an emergency manager|
|If PA 436 is found to be unconstitutional, then this bankruptcy is also|
|You give up all future rights to sue or appeal any decision or person related to bankruptcy.|
|The pension boards will be taken over by the state and private interests with high administration costs.|
|No guarantees, the plan can change how much you will be paid now and in the future, greater than 27%.|
|Current city’s financial status unknown annual financial report (CAFR) , Orr given extension|
|City will save $140 million in health care cost this year per pension board, 78 % decrease from $180 million.|
|GRS had an 11% and PFRS 18% return last fiscal year, This equates to millions of dollars.|
|City will eliminate the death benefit|
|The pension is not underfunded the city is withholding pension obligations|
|Retirees are forced to pay high health care costs.|
|Recoup revenue sharing, tax abatements, tax giveaway to millionaires and billionaires|
|Reductions 4.5%, 20% Clawback, Elimination of COLA, not guaranteed or required.|
|We are not under-funded per actuary firm Gabriel, Roeder, Smith & Company We are funded better than the State and County.|
“The General Retirement System Board of Trustees plans to hold two informational meetings for retirees after the Plan of Adjustment ballots are mailed. The meetings are planned to help retirees understand the Plan of Adjustment ballots. We will mail postcards to notify retirees of the details for each meeting.” — NOTE ON MAY’S PENSION CHECK STUBS.
MDB objection from News article (Bukowski’s request for Rhodes’ recusal, covered by Detroit News)
DB Rhodes order MDB motion (Rhodes response to Bukowski motion for recusal)
Detroit bankruptcy judge tosses activists recusal bid (Detroit News article)