Detroit’s 32, 000 pensioners started getting their ballots a few weeks ago to have their say on the city’s Plan of Adjustment. Without a “yes” vote from retirees, the “Grand Bargain” to help fund pensions, which includes money from the state and foundation, disappears.
But with a “yes” vote, the pensioners are agreeing to nearly five percent cuts to their monthly payments and increasing their out-of-pocket health care costs. Some groups are urging a “no” vote.
The General Retirement System organized meetings where attorneys explained just what non-uniform city retirees are facing. But for some, the gathering did not help them make up their minds. Louis Griffin spent 30 years with the health department. His biggest question is if his vote actually matters.
“Well, in regard to voting? I don’t know. I was sitting in there and I said maybe I just won’t vote period. For what purpose? I’m damned if I do, I’m damned if I don’t so what’s the purpose of me voting,” he says.
Pensioners have a July 11 deadline to return their ballots. Former transportation department security supervisor Bernadine Jones says hers will be in the mail next week. “Saturday is my decision day between yoga, meditation, praying and deciding, writing it down, sending it out,” Jones says.
Emergency Manager Kevyn Orr is urging “yes” votes, warning of severe cuts without the grand bargain money.
-By WDET’s Sandra Svoboda
@WDETSandra and firstname.lastname@example.org
Detroit pensioners have to decide if they will or will not accept the terms of Emergency Manager Kevyn Orr and his bankruptcy consultants’ plan to cut their pensions. Pensioners have less than a month to vote on Emergency Manager Kevyn Orr’s plan of adjustment to cut the city’s debt and get out of bankruptcy, and our Detroit Journalism Cooperative partner, The Michigan Citizen, explores some of the issues involved with their decisionmaking as they fill out their ballots.
Bankruptcy reporter and Next Chapter Detroit blogger Sandra Svoboda and Attorney Sam Alberts, who represents the Official Committee of Detroit Retirees , both join Craig to discuss the differences between the bankruptcy process and collective bargaining negotiations in Detroit. As Detroit pensioners prepare to vote on the Plan of Adjustment, Alberts says it’s important to remember that this is a different process than collective bargaining.
A divided Detroit General Pension Fund board has voted to support the city’s plan to exit bankruptcy even though it requires establishing a committee to watch over the board’s investments for the next two decades.
The General Pension Fund includes about 18,000 current and retired city workers who face a 4.5 percent cut in the monthly payments under the Plan of Adjustment crafted by Emergency Manager Kevyn Orr. If the workers do not approve the plan, Bankruptcy Judge Steven Rhodes could impose even steeper cuts.
Members of the Police and Fire Retirement system are also considering the plan, which does not cut public safety workers’ wages but does reduce cost of living increases. The union representing police officers is urging its members to reject the plan, arguing it ultimately takes money away from Detroit cops who already make abysmally-low salaries.
At stake is the so-called “Grand Bargain” between the state and private foundations to provide about $660 million to shore up the pension systems and save the city from potentially having to sell any of the collection at the Detroit Institute of Arts. The Grand Bargain hinges on both Detroit pension systems accepting the cuts outlined in the plan of adjustment.
-By WDET’s Quinn Klinefelter
Two national foundations have pledged $13 million toward the Detroit Institute of Arts‘ portion of the “Grand Bargain” in the city’s bankruptcy. The New York-based Andrew W. Mellon Foundation and the Los Angeles-based J. Paul Getty Trust join the Detroit Three automakers in contributing funds, the DIA announced in a news release today.
The Mellon Foundation pledged up to $10 million while the Getty Trust will add $3 million. “Mellon has pledged $5 million immediately, with the full amount contingent on the museum raising sufficient matching funds to meet its $100 million fundraising requirement,” the DIA said.
“By pledging this unusually large grant to a single institution, the Foundation recognizes the significance of the DIA for the ongoing recovery and renewal of Detroit, and affirms its confidence that the museum will remain critical to the cultural life of the city and the nation,” Mellon Foundation President Earl Lewis said in a statement.
The money will go toward the DIA’s $100 million commitment as part of the Grand Bargain. The deal also includes $195 million in state money and $466 million from other foundations going toward pension funding in exchange for the DIA’s collection being protected from sale to pay creditors as long as Detroit’s pensioners vote in favor of the city’s Plan of Adjustment.
It seems momentum behind Detroit’s municipal bankruptcy reorganization continues to build. If the momentum continues, the city could emerge from bankruptcy this fall. Today, General Motors, Ford, and Chrysler pledged to contribute a combined $26 million, as Michigan Radio reports.
The “Grand Bargain” gets grander with a $26 million contribution from the Detroit Three automakers toward the Detroit Institute of Arts’ $100 million portion of the deal, officials announced today.
The funds, per terms of the Grand Bargain, will be contributed toward pensions as long as pensioners vote in favor of the city’s Plan of Adjustment. Voting is ongoing with ballots due back by July 11. The deal also includes $195 million of state money, approved by the Legislature and awaiting Gov. Rick Snyder’s signature, and $366 million of foundation funds. The money also protects the museum’s collection from sale to creditors to pay debt.
Gathering in the Rivera Court at the museum, executives from the car companies, leaders of the the Detroit Institute of Arts, Chief U.S. District Judge Gerald Rosen, Detroit Emergency Manager Kevyn Orr, Gov. Snyder and two retirees spoke to the audience and media.
Here’s some of what they had to say:
“This is about the DIA certainly but this is about Detroit, it’s about Michigan, and it’s about our pensioners. We’re all beneficiaries of this wonderful effort,” said Eugene Gargaro, chairman of the board, Detroit Institute of Arts.
“This money is intended to help preserve the cultural identity and the culture heritage that is on display here at the Detroit Institute of Arts. It is also intended to help preserve the pensions of many of the hard-working men and women that have served the city of Detroit for many years and most importantly this contribution is intended to help get the Motor City back on its feet again,” says Reid Bigland, head of U.S. Sales, Chrysler Group, chairman, president and chief executive officer, Chrysler Canada, Inc. and president and chief executive officer Ram Tuck Brand, Chrysler.
“The DIA and the people of Detroit need our help and we are here as we’ve always been to do our part. … We hope our contribution will encourage other companies and organizations to come forward and join us in this effort to revitalize this great city,” says Joe Hinrichs, executive vice president and president, The Americas, Ford Motor Company.
“We are here today to ensure that the Detroit Institute of Arts remains a vibrant cultural pillar within our community. The mark of a great city is of course its cultural institutions. …and GM stands united with so many of others in our community to preserve this historical treasure at this critical time,” says Mark Reuss, executive vice president, Global Product Development, Purchasing and supply chain, and vice chairman, GM Foundation.
“I think it’s important that we stop and recognize something special with our auto companies. If you think back a few years ago, did we think we would see a day when they were stepping up to support this community at this financial level? They were struggling for their survival. …It’s a fragile comeback. Our work is not done yet. We need to follow through. This is an important step. This is an historic step today in making that fragile comeback a reality,” says Gov. Rick Snyder.
“In so many ways you are very much the face, not just of Detroit but all of Michigan…applause … and to have come forward in this way speaks volumes about the commitment that all three of you have to Detroit and to Michigan. Thank you very much. I couldn’t help but think maybe we’re setting the template here in Michigan for how this should be done,” says chief U.S. District Judge Gerald Rosen, who is the chief mediator in the bankruptcy case.
“The ball has started to roll. It is now going to roll full force downhill and pick up even more money or the Grand Bargain,” Shirley Lightsey, president of the Detroit Retired City Employees Association.
“There are very many moving parts that had to be put into place. Most of those have now been put into place and it’s up to the retirees to step up. As I say we are the beneficiaries of nearly a billion dollars that have been contributed to help secure our pensions and reduce the reductions that we would see otherwise,” says Don Taylor, president of the Retired Detroit Police and Firefighters Association.
“As we sit here in this cradle of history and you look around at these great murals, you see depictions of the industrial might of the United States and the effort that it undertook to reach a great outcome and as people keep reminding me because I lose track of it from time to time, we’re in the midst of a great undertaking on behalf of the state, the city and in front of the eyes of the country,”
Detroit Emergency Manager Kevyn Orr.