Detroit’s “Financial Advisory Board” in its meeting June 28, 2012. Its main agenda item was a closed session to discuss “upcoming contract” issues. Also present in the closed session were State Treasurer Andy Dillon, PA4 co-author Attorney Michael McGee, and Detroit COO Chris Brown.


By Diane Bukowski 

July 15, 2012 

DETROIT – This past week, the daily media declared that the city’s Financial Advisory Board (FAB) set up under its PA4 consent agreement had “agreed” to Mayor Dave Bing’s imposed set of “City Employment Terms” (CET). The CET involves drastic cuts in services, as well as wages, benefits and terms of employment for workers and retirees, and a complete abrogation of union contracts.

City Council is to discuss this “CET” Mon. July 16, 2012 at 1:30 p.m., with public comment to follow.

It is a complete falsehood that Mayor Bing presented this CET to the FAB. From its first meeting, held after the City Council approved the final two members of the FAB, this virtual cabal has met three times primarily to draft the document.

It, not the City Council, the Mayor, or the unions has the absolute power under the consent agreement to dictate and approve this CET, which then is subject to final approval by State Treasurer Andy Dillon and Gov. Rick Snyder.

The FAB is dominated entirely by banking and corporate interests. (See sidebar). State Treasurer Andy Dillon, PA4 co-author attorney Michael McGee, of the law firm of Miller, Canfield, Paddock and Stone, Detroit Chief Operating Officer Chris Brown, and Labor Relations Director Lamont Satchel were all present at the FAB’s second meeting. Along with their staff, they went into the closed session on the CET and never came back out.

“These lawless people are on a fast track to dismantle the entire City of Detroit,” Cecily McClellan, vice-president of the Association of Professional and Technical Employees (APTE), said. “The terms of the CET are brutal, particularly for retirees.”

Cecily McClellan participates in first Benton Harbor protest against PA4.

Yvonne Ross is a city employee and taxpayer who is a co-litigant in a civil lawsuit against the consent agreement.

After a hearing on the suit July 13 (see story below), she said “We are facing huge lay-offs, the closing of our recreation centers, the health department and other vital services. The state needs to give us the money they owe us so this doesn’t have to happen. Detroit is a jewel, a money-maker. That’s why they want it.”

Ross, Rose Roots and Yolanda King sued the city, Bing, and the City Council for approving the consent agreement while the state is in default to the city for over $307 million as determined by Detroit Corporation Counsel Krystal Crittendon.

Detroit Corporation Counsel Krystal Crittendon

The so-called CET is headed by the hypocritical term “Agreement.” There was no agreement by city residents or workers to the Financial Stability [consent] Agreement, and there has certainly been no “agreement” by city workers or their union leaders to the CET. (Link to CET at end of article.)

“Any provisions in the most recently expired Collective Bargaining Agreements . . . .that are not expressly referenced in this CET or any addendum and are inconsistent with the terms of this CET or any addendum are null and void as of the effective date of this CET,” the document begins.

It does not acknowledge the decades-long provisions and protection that Civil Service laws provide.

While following the familiar pattern and language of previous contracts, the CET actually guts them.

AFSCME and Coalition of Black Trade Unionists members demonstrate at CAYMC May 27, 2010.

It declares that all city workers will be subject to an immediate 10 percent pay cut, and eliminates furlough days. It wipes out annual longevity payments and merit and step increases in pay, a long-time part of city employment terms under Civil Service.

It says workers will still contribute five percent of their annual pay to a retirement plan, but then astonishingly states that the workers’ contributions will be considered the CITY’s contributions, eliminating the city’s obligation to pay separately into the fund.

It eliminates the 35-hour work week.  It doesn’t guarantee a lunch hour, only two 15-minute breaks. It sets up a two tier system for workers hired after Sept. 28, 2010, cutting their available sick and vacation time.

Dave Bing with Blue Cross Blue Shield officials; photo is from city’s website.

The CET emphasizes the role of the Blue Cross Blue Shield Caremark plan, although workers are allowed to opt for other plans. They will be forced to pay 20 percent of the premium cost for all plans, and doctor visit and prescription fees will also increase.

This is especially galling to the coalition of city unions who presented a proposal to City Council Dec. 1, 2011 which cited among other savings the amount the city could save by cutting the use of Blue Cross Blue Shield.

Protest outside BCBS building in North Dakota.

“The city could achieve agreements with the major Detroit-based hospital chains to offer the option of employees signing up to have their medical care performed by the doctors at that hospital chain,” the union proposal said.

“ . . .the rate will likely be cheaper to the City and its employees than the rate charged by Blue Cross Blue Shield. The administrative fees and stop loss fees that the City paid to BCBS, during the 2009-10 contract year, were estimated at more than $14 million. . . For the last six months, the Administration has promised to seek bids from other health insurance companies, to see if the rates received from Blue Cross Blue Shield are competitive. This bid request has not been sent out, and therefore BCBSM continues to maintain its virtual monopoly.”

Dr. Martin Luther King, Jr. came to Memphis to support striking AFSCME sanitation workers and was assassinated there shortly after he marched with them in 1968.

Coverage for sponsored dependents of city workers and retirees is cut, as is coverage for the spouses of retirees if they marry after retirement.

But for workers hired after Sept. 28, 2010, all hospital/medical and prescription benefits shall cease for retirees and their dependents after the retiree turns 65. Prescription drugs for “health habits, reproductive (fertility) and lifestyle prescription drugs except for smoking cessation and weight loss” will not be covered.

In the CET, the city reserves the absolute right to change all terms of the contract without consent of the unions. Ironically, the CET bars strikes although at the same time the consent agreement says city workers will no longer be covered under the Public Employee Relations Act, which while providing some protections for workers, has been the chief mechanism to bar strikes.

It says the city will have the absolute right to contract out and eliminate services and departments.

It says, “This CET, nor any other terms and conditions of City employment regardless of sources shall not be binding upon the successors and assignees of the Employer by the consolidation, merger, sale, transfer, lease or assignment of the Employer in any respect whatsoever by a change of any kind of the ownership of management of either party hereto of any separable, independent segment of any party hereto.”

It thus eliminates in one fell swoop the time-honored “successor clause” from all union contracts.

Despite the fact that the city has more than 40 unions, each with their own contract, and some with supplemental agreements, the CET purports to be the sole “contract” for all city workers.

The response of city unions and their workers to this outright union-busting document remains to be seen.

Click on City Employment Terms to read entire document.

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