Former Charter Commissioner Joyce Moore says current Commission is illegal
DETROIT – City workers, retirees, and union and community leaders and their supporters packed the Aug. 10 meeting of the Detroit Charter Revision Commission, determined to protect their pensions and the city’s assets. The meeting focused on charter provisions related to the city’s General and Police and Fire Retirement Systems.
Forty-three year retiree and 27 year General Retirement System Trustee Ron Gracia had already warned the Charter Commission that many state and federal laws, along with union collective bargaining provisions, limit any role the Commission can play in making changes to the retirement systems.
During the meeting, former Charter Commissioner Joyce Moore, who served from 1994 though 1997, said the current Commission has no legitimacy at all. She and several others have filed suit asking that the Commission be disbanded.
“Section 9-403 of the Charter says clearly that charter revision questions must be submitted at gubernatorial primaries, with the next revision not to go on that ballot until 2018,” Moore said. “The election is to be held when the revision question is submitted, which was not done this year.”
State law allows exceptions to the 2018 requirement, Moore said, but also specifies that municipal charter provisions supercede the exceptions.
Valerie Burris said, “Detroit won’t stand for a give-away of its pension systems or of its charter either!” to loud applause.
Many speakers attacked Mayor Dave Bing and Lansing lawmakers including Rep. George Cushingberry Jr.(D-Detroit). They have proposed legislation to allow the Lansing-based Municipal Employees Retirement System (MERS) to take over Detroit’s two systems, worth $6.5 billion.
MERS currently has no Detroit resident or African-American trustees, and is funded at only 50 percent while Detroit’s systems are funded at 92 percent (Police/Fire) and 89 percent (General), according to Retirement Systems Executive Secretary Walter Stamper, a scheduled speaker.
Stamper said, “MERS has not invested a penny in Detroit-based projects, while our systems have invested hundreds of millions.”
“The Detroit Retired City Employees Association (DRCEA) is vehemently opposed to this proposed takeover,” said DRCEA officer and former trustee Tom Sheehan, also a scheduled presenter. “It will not resolve the financial problems of this city, because Detroit will still be obligated to pay its pension requirements. The 11,500 civilian retirees who wait every month for their pension checks won’t get service. MERS just wants our money, that’s all this is about.”
Rose Roots, president of the AFSCME City of Detroit retirees, said her organization’s is also strongly opposed to the takeover.
Cecily McClellan, VP of APTE
MERS has 170 member systems, and is heavily invested in Wall Street hedge funds, according to Dempsey Addison, president of the city’s Association of Professional and Technical Employees (APTE).
When the systems’ municipalities default on their pension obligations, MERS has recommended that the state treasurer put some municipalities in receivership. MERS was behind the state takeover of Highland Park. Retirees there reported that MERS frequently did not issue their checks on a regular basis.
Mayor Dave Bing has claimed the “distressed pension system” legislation and a subsequent takeover would save the City of Detroit $20 million a year, a fraction of its budget deficit. But he wants to pay DTE $150 million for its electric power while privatizing the city’s Public Lighting Dept. Addison said Bing’s move to get rid of city workers is behind his attack on the pension systems.
“The Mayor is trying to privatize the Water Department, Public Lighting and elsewhere, meaning we will have fewer employees paying into retirement. He wants to get rid of the pension systems because he won’t be able to support them,” Addison said.
The Detroit police and fire unions said in a letter to state legislators that it is the city that is distressed, and that the pension takeover could end up in a state takeover of Detroit.
Retired Fire Department Deputy Chief Reginald Amos, who worked 37 and a half years for the department, called on meeting participants to join the growing “Recall Bing” movement.
“What are you putting in place in the charter to stop the Mayor from giving away $6.5 billion?” he asked. “As far as using ‘professionals’ to run the system instead of elected trustees, former Mayor Kilpatrick had a preacher [Wendell Anthony] and couple of other people he appointed to the boards who only had high school educations.”
Another scheduled speaker, Joseph Rankin, of Plante & Moran, was put on the spot by APTE Vice-President Cecily McClellan, who demanded to know whether Defined Benefit Plans (favored by the city’s unions) or Defined Contribution plans are more liable to Wall Street manipulation. Rankin had to admit that Defined Benefit plans, administered by trustees whose experts select investments, have greater rates of return on those investments than do Defined Contribution plans, where employees select where their investments go.
Commission Vice-Chair Jenice Mitchell-Ford earlier proposed that the systems should hire “professionals” instead of elected trustees. But Stamper said the elected boards have “two of the best” pension and investment professionals in the country already on staff as advisors.
“Everybody has an agenda, including the experts,” Mike Mulholland, Secretary-Treasurer of AFSCME Local 207 (Water and Public Lighting), said. “The job of elected trustees is to determine which agendas benefit workers and retirees. I have an agenda, and that is the uplifting of the City of Detroit, not the giveaway of all our assets.”
The Mayor, City Council, and Treasurer appoint five of the Police and Fire Board members, while eight are elected, one who is supposed to be a retiree. Four General System trustees are appointees of the Mayor, the City Council, and the City Treasurer, while six are elected, one a retiree.
There was discussion of adding more retirees to the boards. June West, head of the city’s Police Lieutanants and Sergeants union, said it is the city that has been refusing to add the retiree already provided by the charter for the Police and Fire board.
The meeting was meant to be “educational,” according to Commission Chair Freman Hendrix. He announced that “workshops” including unspecified “stakeholders” will be held “later” on proposed pension charter language.
Hendrix later denied that he is already serving on the Greektown Casino Board, a factor he admits will force him to step down as chair in September. However, others have reported he is already on the casino board but wants to remain on the Charter Commission until his successor is selected.
As part of its “educational efforts,” the Commission distributed a packet containing news articles blasting alleged excessive travel expenses incurred by current trustees of the Detroit General and Police and Fire Pension Systems.
Stamper, Sheehan and General Retirement System chair Susan Glaser, who spoke from the audience, all said that the two systems have initiated sweeping changes to ensure proper ethics, training and travel expense oversight. In a notice to its 8,000 members, the DRCEA published statistics showing that MERS actually runs up more travel expenses than have Detroit’s two boards, although it has fewer board members.
The next meeting of the Charter Commission, with the topic of privatization, is scheduled for Tues. Aug. 24 at 6 p.m. at the UAW-GM Human Resources Center at 200 Walker on Detroit’s riverfront. Hendrix has announced that he wants to remove Section 6-307 of the Charter, which limits privatization.
Following meeting is Tues. Sept. 14, 2010 at 6 p.m. at Fellowship Chapel, 7707 W. Outer Drive w. of Southfield, topic Enterprise Departments (Public Lighting, Transportation, Water and Sewerage). Bing is moving to shut down Public Lighting; Hendrix et. al. would like to get rid of language in Charter stating that no D-DOT or Water Departments assets can be sold or otherwise transferred without a vote of the people.
Following meeting is Tues. Sept. 28, 6 p.m. at Lipke Recreation Center, 19320 Van Dyke. Bing and others want to dump the Health Department and have already gotten rid of its TB clinic, pharmacy, WIC program, Meals on Wheels, and numerous other services. The majority of the Department is already privatized under SEMHA (Southeast Michigan Health Association).
(To be notified of upcoming charter commission, as well as City Council meetings, call the City Clerk’s office and ask to be put on the email list for notifications of meetings. The Charter Commission has been doing a poor job of publishing its own up-to-date calendars on their division of the city’s website.)
Joyce Moore, former Charter Commission, says current Commission is illegal
By Diane Bukowski
